Graded Surveillance Measure (GSM) - Securities Moving to GSM Stages

Description

BSE announces movement of five securities into their respective GSM stages, including Karnavati Finance, Rajasthan Tube Manufacturing, GSL Securities, Aris International, and Gayatri Projects.

Summary

BSE has announced the movement of five securities into various stages of the Graded Surveillance Measure (GSM) framework effective January 6, 2026. The GSM framework is designed to alert investors about securities that have witnessed abnormal price movements and to protect investor interests through enhanced surveillance and trading restrictions.

Key Points

• Five securities are being moved into GSM stages ranging from Stage I to Stage IV
• Karnavati Finance Ltd (538928) moves to GSM Stage I
• Rajasthan Tube Manufacturing Company Ltd (530253) and GSL Securities Ltd (530469) move to GSM Stage II
• Aris International Ltd (531677) moves to GSM Stage III
• Gayatri Projects Ltd (532767) moves to GSM Stage IV (highest surveillance level)
• Securities marked with special symbols (#, $) may move to lower GSM stages due to inclusion in ESM or IBC frameworks

Regulatory Changes

The placement of securities in GSM stages imposes progressive restrictions:

• Stage I: Price band restrictions and additional surveillance
• Stage II: Enhanced disclosure requirements and tighter price bands
• Stage III: Further restrictions on trading parameters
• Stage IV: Maximum surveillance measures including potential additional deposit requirements and trading limitations

Securities can be moved to lower GSM stages if they are included in the Enhanced Surveillance Measure (ESM) Framework or Insolvency and Bankruptcy Code (IBC) Framework.

Compliance Requirements

• Trading members must ensure compliance with GSM-specific trading restrictions for affected securities
• Investors should be aware of enhanced surveillance measures and potential liquidity constraints
• Market participants must adhere to modified price bands and trading limits as applicable to each GSM stage
• Brokers should provide adequate disclosure to clients about GSM status of these securities

Important Dates

• Effective Date: January 6, 2026 - Securities move into their respective GSM stages

Impact Assessment

Market Impact: High - The movement of securities into GSM stages, particularly Gayatri Projects into Stage IV, signals significant concerns about price volatility and trading patterns. This will result in reduced liquidity and increased trading costs for these securities.

Investor Impact: Investors holding these securities will face trading restrictions including potential price freezes, additional margin requirements, and limited order execution. Stage IV placement for Gayatri Projects represents the most severe surveillance measure, which may significantly impact investor ability to exit positions.

Liquidity Impact: Trading volumes are expected to decline substantially for all five securities, with the most severe impact on Gayatri Projects. The progressive nature of GSM stages means securities face increasingly restrictive trading conditions.

Affected Securities Details

Impact Justification

Securities moving into GSM stages face enhanced surveillance and trading restrictions, directly impacting liquidity and investor access. Stage IV placement (Gayatri Projects) represents the highest level of surveillance.