Description

BSE to shift three companies to 'Z' group effective January 27, 2026 for failing to comply with quarterly financial results submission requirements for June 2025 and September 2025 quarters.

Summary

BSE has announced the transfer of three companies to the ‘Z’ group effective January 27, 2026, due to non-compliance with Regulation 33 of SEBI LODR for two consecutive quarters (June 2025 and September 2025). The companies have until January 21, 2026 to comply and avoid the transfer. Additionally, 39 companies already in ‘Z’ or ‘MT’ groups remain non-compliant for the same periods.

Key Points

  • Three companies will be shifted to ‘Z’ group: Konark Synthetic Ltd (514128), Shree Securities Ltd (538975), and Sharanam Infraproject and Trading Ltd (539584)
  • Non-compliance relates to Regulation 33 (quarterly financial results) for June 2025 and September 2025 quarters
  • Companies have a grace period until January 21, 2026 to comply and prevent the transfer
  • Transfer will take effect on January 27, 2026 if compliance is not achieved
  • 39 additional companies already in ‘Z’ or ‘MT’ groups also remain non-compliant for the same periods
  • All trades in ‘Z’, ‘ZP’, ‘ZY’, and ‘MT’ groups will be settled on Trade for Trade basis

Regulatory Changes

This action is pursuant to SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024, which prescribes penal actions for non-compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The circular also implements the Standard Operating Procedure for suspension and revocation of trading of specified securities of listed entities.

Compliance Requirements

  • Affected companies must: Submit outstanding quarterly financial results for June 2025 and September 2025 quarters under Regulation 33 of SEBI LODR Regulations
  • Deadline for compliance: January 21, 2026 to avoid transfer to ‘Z’ group
  • Market participants: Must be aware of restricted trading status for these securities
  • SME companies: Must comply with half-yearly requirements for March 2025 and September 2025 periods

Important Dates

  • January 13, 2026: Notice issued
  • January 21, 2026: Final deadline for companies to comply and avoid ‘Z’ group transfer
  • January 27, 2026: Effective date for transfer of non-compliant scrips to ‘Z’ group
  • June 2025 & September 2025: Quarters for which financial results remain non-compliant

Impact Assessment

Trading Impact: Transfer to ‘Z’ group severely restricts liquidity as all trades are executed on Trade for Trade basis with no intraday trading allowed. This typically results in wider bid-ask spreads and reduced investor interest.

Investor Impact: Existing shareholders face liquidity constraints and potential difficulty exiting positions. The ‘Z’ group classification serves as a warning signal about the company’s compliance status.

Company Impact: Being in ‘Z’ group damages reputation, reduces market confidence, and may trigger additional scrutiny from regulators. Companies must rectify non-compliance to restore normal trading status.

Market Impact: The list of 39 companies already in ‘Z’ or ‘MT’ groups highlights ongoing compliance challenges in the market, particularly affecting smaller companies and those in financial distress.

Impact Justification

Transfer to Z group significantly restricts trading to trade-for-trade basis, indicating severe non-compliance with mandatory financial disclosure requirements