Measure for Companies with High Promoter and Non-Promoter Encumbrance under SEBI SAST Regulation

Description

BSE announces measure for securities with high promoter and non-promoter encumbrance as per SEBI SAST Regulation 28(3), adding NR Agarwal Industries Ltd to the framework effective November 14, 2025.

Summary

BSE has issued a circular regarding the measure for companies with high promoter as well as non-promoter encumbrance as per Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011. Effective November 14, 2025, NR Agarwal Industries Ltd (Scrip Code: 516082, ISIN: INE740D01017) has been added to the framework. The consolidated list now includes 2 securities: India Finsec Ltd and NR Agarwal Industries Ltd. No securities are being removed from the framework.

Key Points

• One security added to high encumbrance framework: NR Agarwal Industries Ltd
• No securities moving out of the framework
• Consolidated list contains 2 securities under this measure
• Framework based on SEBI SAST Regulation 28(3) regarding pledged shares
• Effective date: November 14, 2025

Regulatory Changes

This circular implements SEBI’s regulatory framework under Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011, which addresses situations where companies have high levels of both promoter and non-promoter shareholding encumbrance. The measure aims to identify and monitor securities where significant portions of shares are pledged or encumbered, potentially indicating financial stress or governance concerns.

Compliance Requirements

• Market participants should be aware of the enhanced surveillance status of listed securities
• Trading members and investors should note the elevated risk profile of securities under this framework
• Companies included in this framework may face additional disclosure and monitoring requirements
• Investors should exercise heightened due diligence when trading in these securities

Important Dates

• Effective Date: November 14, 2025 - NR Agarwal Industries Ltd enters the high encumbrance framework

Impact Assessment

The addition of NR Agarwal Industries Ltd to this framework indicates elevated levels of share pledging by both promoter and non-promoter shareholders, which may signal financial stress or liquidity concerns. This measure serves as a cautionary signal to market participants. The consolidated framework now covers 2 securities (India Finsec Ltd and NR Agarwal Industries Ltd), both subject to enhanced surveillance. Investors should exercise caution when trading these securities as high encumbrance levels can lead to forced selling in adverse market conditions, increased volatility, and potential governance issues. The measure helps maintain market integrity by flagging securities with elevated risk profiles.

Affected Securities

Annexure I - Securities Added to Framework

Annexure II - Securities Removed from Framework

Nil

Annexure III - Consolidated List

Impact Justification

Affects 2 securities under enhanced surveillance for high encumbrance levels, signaling potential governance risks but limited market-wide impact