Description

BSE announces movement of 47 securities into higher GSM stages (II, III, and IV) effective from the specified date as part of enhanced market surveillance measures.

Summary

BSE has announced the movement of 47 securities into higher stages of the Graded Surveillance Measure (GSM) framework. The list includes 3 securities moving to GSM Stage II, 6 securities moving to Stage III, and 38 securities moving to Stage IV. This surveillance action is part of BSE’s ongoing market monitoring mechanism to protect investor interests and maintain market integrity.

Key Points

  • 3 securities moved to GSM Stage II: Ecoboard Industries Ltd., Jpt Securities Ltd., and Aayush Wellness Limited
  • 6 securities moved to GSM Stage III: India Radiators Ltd., Procal Electronics India Ltd., Popees Cares Limited, Bharat Textiles & Proofing Ind, Progrex Ventures Limited, and Tacent Projects Limited
  • 38 securities moved to GSM Stage IV (highest surveillance stage)
  • Two securities (Blue Chip India Ltd. and Univa Foods Limited) moved as per NSE guidelines
  • Securities marked with special symbols indicate concurrent framework applicability (ESM or IBC)

Regulatory Changes

The GSM framework imposes progressively stricter surveillance measures as securities move to higher stages:

  • Stage II: Enhanced monitoring and periodic disclosures required
  • Stage III: Additional surveillance with stricter price bands and position limits
  • Stage IV: Maximum surveillance including 5% price band, 100% margin requirements, trade-for-trade settlement, and no intraday leverage

Securities in higher GSM stages face increased scrutiny regarding corporate governance, financial disclosure quality, and compliance with listing obligations.

Compliance Requirements

  • Listed Companies: Must provide enhanced disclosures and explanations for price movements; improve corporate governance standards; ensure timely compliance with all listing requirements
  • Trading Members: Must collect 100% upfront margins from clients for Stage IV securities; inform clients about GSM restrictions before order placement; maintain additional surveillance on client trading patterns
  • Investors: Should be aware of restricted trading conditions; understand that Stage IV securities have trade-for-trade settlement (no intraday squaring off); note that delivery obligations are mandatory

Important Dates

  • Effective Date: As specified in the circular (November 11, 2025)
  • Implementation: Surveillance measures applicable from the next trading session after circular issuance

Impact Assessment

Market Impact: The movement of 47 securities to higher GSM stages will significantly reduce liquidity in these scrips due to stricter trading conditions. Stage IV securities will see particularly severe impact with 100% margin requirements and trade-for-trade settlement, likely deterring speculative trading.

Investor Impact: Existing investors holding these securities may face difficulty in exiting positions due to reduced liquidity. New investments will require full upfront payment with no leverage available. The 5% price band in Stage IV restricts daily price movement, potentially extending the time needed for price discovery.

Operational Impact: Brokers and trading members must update their risk management systems to enforce additional margin requirements and trading restrictions. Enhanced monitoring and client disclosure requirements will increase operational overhead.

Corporate Impact: Listed companies face reputational concerns and must take corrective actions to address surveillance triggers, including improving disclosure quality, corporate governance practices, and compliance standards to potentially exit GSM framework in future.

Impact Justification

Movement to higher GSM stages significantly impacts trading in 47 securities with stricter surveillance measures, additional disclosure requirements, and potential trading restrictions affecting investors and market participants.