Measure in Respect of Companies with High Promoter and Non-Promoter Encumbrance

Description

BSE announces securities shortlisted and consolidated list under the framework for companies with high promoter and non-promoter encumbrance as per SEBI (SAST) Regulation 2011, effective January 20, 2026.

Summary

BSE has issued an updated list of securities subject to 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 framework adds 2 new securities and maintains a consolidated list of 11 securities effective January 20, 2026. No securities are exiting the framework in this update.

Key Points

• Two securities newly added to the high encumbrance surveillance framework: India Finsec Ltd and Visa Steel Ltd
• No securities are moving out of the framework in this update
• Consolidated list includes 11 securities under surveillance for high encumbrance levels
• Framework addresses risks arising from pledged/encumbered shares held by both promoters and non-promoters
• Measure implemented under SEBI (SAST) Regulation 2011, Regulation 28(3)

Regulatory Changes

This circular updates the list of securities under the high encumbrance surveillance framework. The framework applies additional monitoring and restrictions on companies where both promoter and non-promoter shareholdings show high levels of encumbrance (pledge/collateral). This is a periodic update to the existing regulatory framework rather than a new regulation.

Compliance Requirements

• Trading members and market participants must be aware of securities under this surveillance measure
• Enhanced due diligence and risk assessment required for trades in these securities
• Companies on the list must comply with disclosure requirements under SEBI (SAST) Regulation 2011
• Investors should exercise caution when trading these securities due to elevated encumbrance risks
• Securities under this framework may be subject to additional trading restrictions or price bands

Important Dates

• Effective Date: January 20, 2026 - New additions and consolidated list become applicable

Impact Assessment

Market Impact: High severity for the 11 listed securities, as inclusion in this framework signals financial stress and heightened risk. Trading volumes and liquidity may be negatively affected.

Investor Impact: Shareholders in these companies face increased risk due to high encumbrance levels. In case of default by promoters or large shareholders, pledged shares may be invoked, leading to sudden price volatility.

Operational Impact: Companies under this measure face reputational concerns and may find it harder to raise capital. They must work to reduce encumbrance levels to exit the framework.

Securities Added (Effective January 20, 2026)

Complete Consolidated List (11 Securities)

Impact Justification

High encumbrance levels pose significant risks to shareholders and market stability. Surveillance measures restrict trading and require enhanced monitoring.