Description

BSE circular updating the list of securities subject to surveillance measures due to high promoter and non-promoter encumbrance as per SEBI (SAST) Regulation 2011, effective January 01, 2026.

Summary

BSE has updated the list of securities under surveillance measures for companies with high promoter and non-promoter encumbrance as per Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011. The circular adds 1 security to the framework, removes 2 securities, and maintains a consolidated list of 9 securities under this surveillance measure, effective January 01, 2026.

Key Points

  • One security added to the encumbrance surveillance framework: Forbes Precision Tools and Machine Parts Ltd (Scrip Code: 544186, ISIN: INE0TT901016)
  • Two securities removed from the framework: B. L. Kashyap and Sons Ltd (Scrip Code: 532719) and Premier Energy and Infrastructure Ltd (Scrip Code: 533100)
  • Consolidated list contains 9 securities under high encumbrance surveillance
  • Framework targets companies with high pledging/encumbrance of shares by both promoters and non-promoters
  • Measure implemented under SEBI (SAST) Regulation 2011, Regulation 28(3)
  • Some securities may move out due to inclusion in other surveillance frameworks (LT ASM, ESM, or TT)

Regulatory Changes

This circular implements surveillance measures mandated under Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011. The framework specifically targets companies where both promoter and non-promoter shareholdings show high levels of encumbrance (pledging), which indicates potential financial stress or credit risk.

Compliance Requirements

  • Listed companies under this framework must comply with enhanced disclosure requirements regarding promoter and non-promoter encumbrance
  • Investors should exercise caution when trading in these securities due to elevated risk profiles
  • Companies must maintain regular disclosures on changes in encumbrance levels
  • Market participants should be aware that securities under this framework may face additional trading restrictions or monitoring

Important Dates

  • Effective Date: January 01, 2026 - Implementation of updated surveillance list
  • Circular Date: December 31, 2025

Impact Assessment

Market Impact: The surveillance measure for high encumbrance indicates significant financial risk for the affected companies. High pledging of shares by promoters and non-promoters often signals liquidity challenges or debt-related stress, which can lead to forced selling if margin calls occur.

Trading Impact: Securities under this framework typically face reduced liquidity, wider bid-ask spreads, and higher volatility. Institutional investors may avoid or reduce exposure to these stocks.

Investor Risk: Elevated risk for investors as high encumbrance levels can lead to sudden price movements, potential invocation of pledges, and change in management control. The framework serves as an early warning system for market participants.

Companies Affected:

  • Added: Forbes Precision Tools and Machine Parts Ltd faces new surveillance scrutiny
  • Removed: B. L. Kashyap and Sons Ltd and Premier Energy and Infrastructure Ltd exit this specific framework (may be under other surveillance measures)
  • Continuing: Seven other companies remain under surveillance including Bedmutha Industries, Brahmaputra Infrastructure, Future Market Networks, India Nivesh, NR Agarwal Industries, Shalimar Paints, Sudal Industries, and Tulsyan NEC

Impact Justification

High encumbrance levels indicate significant pledging of shares by promoters and non-promoters, which poses financial and governance risks. This surveillance measure directly impacts trading and investor confidence in the listed securities.