Description

BSE announces movement of 35 securities across GSM stages, with 30 securities moving to Stage IV, indicating heightened surveillance due to price volatility or other risk factors.

Summary

BSE has announced the migration of 35 securities to higher stages under the Graded Surveillance Measure (GSM) framework effective December 16, 2025. The GSM framework is designed to alert investors about securities exhibiting abnormal price movements or other risk characteristics. Two securities move to Stage I, two to Stage II, three to Stage III, and 30 securities move to the most stringent Stage IV surveillance.

Key Points

  • 2 securities moving to GSM Stage I: Amit International Ltd, others
  • 2 securities moving to GSM Stage II: KLG Capital Services Ltd, Swadha Nature Ltd
  • 3 securities moving to GSM Stage III: N2N Technologies Ltd, Sarda Proteins Ltd, Advik Laboratories Ltd
  • 30 securities moving to GSM Stage IV, the highest surveillance level
  • Stage IV includes prominent names like Rama Petrochemicals Ltd, Capricorn Systems Global Solutions Ltd, Grand Foundry Ltd, and others
  • Securities may move to lower GSM stages if included in ESM (Enhanced Surveillance Measure) or IBC (Insolvency and Bankruptcy Code) frameworks
  • Univa Foods Ltd marked with (*) indicating alignment with NSE classification

Regulatory Changes

The GSM framework applies progressively stringent measures as securities move through stages:

Stage I: Initial surveillance with basic monitoring

Stage II: Enhanced surveillance with additional disclosure requirements

Stage III: Strict surveillance with trading restrictions

Stage IV: Maximum surveillance with severe trading restrictions including:

  • 100% delivery-based trading (no intraday allowed)
  • Reduced price bands (typically 5% or lower)
  • Additional surveillance deposits/margins
  • Trade-for-trade settlement
  • Periodic review for potential suspension

Compliance Requirements

  • Trading Members: Must ensure compliance with applicable margin requirements and trading restrictions for all affected securities
  • Investors: Can only trade these securities on a delivery basis in Stage IV; intraday trading is prohibited
  • Listed Companies: Subject to enhanced disclosure obligations and may need to provide periodic clarifications on price movements
  • All market participants must be aware of the specific stage applicability and associated trading conditions

Important Dates

  • Effective Date: December 16, 2025
  • Implementation: Stage migration takes effect from the start of trading on the effective date
  • Review Period: Securities are subject to periodic review for continuation or movement to different stages based on market behavior

Impact Assessment

Market Impact: The movement of 30 securities to Stage IV will significantly impact liquidity in these counters as intraday trading is prohibited and delivery requirements increase capital commitment. This may lead to wider bid-ask spreads and reduced trading volumes.

Investor Impact: Retail and institutional investors must adjust trading strategies, ensuring sufficient funds for delivery-based transactions. The higher margin requirements will increase the cost of trading these securities.

Company Impact: Companies in Stage IV face reputational concerns and potential difficulty in attracting investors. They may need to engage proactively with exchanges to address surveillance concerns and work toward de-escalation.

Risk Management: The GSM framework serves as an early warning system, protecting investors from potential manipulation or excessive volatility in these securities. Investors should exercise heightened caution when trading GSM securities and conduct thorough due diligence.

Impact Justification

Movement to higher GSM stages imposes significant trading restrictions including price-to-price delivery, reduced price bands, and additional margin requirements, directly affecting liquidity and investor access for 35 securities.