Description

BSE circular regarding surveillance measures for securities with high promoter and non-promoter encumbrance as per SEBI (SAST) Regulation 2011, effective January 14, 2026.

Summary

BSE has issued a circular regarding surveillance measures 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. The circular identifies one new security being added to this surveillance framework and provides a consolidated list of nine securities currently under this measure, effective January 14, 2026.

Key Points

  • Setco Automotive Ltd (Scrip Code: 505075, ISIN: INE878E01021) has been added to the high encumbrance surveillance list
  • No securities are being removed from the framework as of this update
  • Total of 9 securities are currently under this surveillance measure
  • The measure applies to companies with high levels of pledged/encumbered shares held by both promoters and non-promoters
  • Regulatory framework is based on SEBI (SAST) Regulation 2011, Regulation 28(3)

Regulatory Changes

This circular implements ongoing surveillance measures under SEBI (SAST) Regulation 2011, specifically Regulation 28(3), which deals with disclosure requirements related to encumbrance of shares. The framework aims to monitor companies where significant shareholdings (both promoter and non-promoter) are encumbered, indicating potential financial stress or liquidity constraints.

Compliance Requirements

  • Companies listed under this framework must comply with enhanced disclosure requirements regarding share encumbrance
  • Investors should exercise caution when trading in these securities due to elevated risk levels
  • Market participants should be aware that these securities are under special surveillance due to high encumbrance levels
  • Listed companies must maintain transparency regarding any changes in encumbrance status of promoter and non-promoter holdings

Important Dates

  • Effective Date: January 14, 2026 - New additions and updated consolidated list become applicable

Impact Assessment

Market Impact: The inclusion of securities in this framework signals heightened risk and may affect investor sentiment and trading volumes. High encumbrance levels typically indicate that promoters or significant shareholders have pledged their holdings as collateral, which can lead to forced selling in case of margin calls or loan defaults.

Investor Impact: Investors in the nine listed securities, particularly Setco Automotive Ltd (newly added), should exercise increased caution. High encumbrance levels suggest potential financial stress and increased volatility risk.

Operational Impact: Companies under this surveillance framework face reputational concerns and may experience increased scrutiny from regulators, investors, and analysts. This could affect their ability to raise capital and impact stock liquidity.

Securities Under Surveillance

Annexure I - New Additions (Effective January 14, 2026)

  1. Setco Automotive Ltd (Scrip Code: 505075, ISIN: INE878E01021)

Annexure II - Securities Moving Out

Nil - No securities are being removed from the framework

Annexure III - Consolidated List (9 Securities)

  1. Brahmaputra Infrastructure Ltd (535693, INE320I01017)
  2. Forbes Precision Tools and Machine Parts Ltd (544186, INE0TT901016)
  3. Future Market Networks Ltd (533296, INE360L01017)
  4. India Nivesh Ltd (501700, INE131H01028)
  5. NR Agarwal Industries Ltd (516082, INE740D01017)
  6. Setco Automotive Ltd (505075, INE878E01021)
  7. Shalimar Paints Ltd (509874, INE849C01026)
  8. Sudal Industries Ltd (506003, INE618D01015)
  9. Tulsyan NEC Ltd (513629, INE463D01016)

Impact Justification

High encumbrance levels in promoter and non-promoter holdings indicate potential financial stress and increased risk for investors, requiring heightened surveillance measures under SEBI regulations.