Description

Amendment to SEBI LODR Regulations changing the threshold for High Value Debt Listed Entities (HVDLE) from Rs. 1,000 crore to Rs. 5,000 crore in outstanding non-convertible debt securities.

Summary

SEBI has issued the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2026, notified on January 20, 2026. The key amendment increases the threshold for classification as High Value Debt Listed Entity (HVDLE) from Rs. 1,000 crore to Rs. 5,000 crore in outstanding non-convertible debt securities. The amendments modify Regulations 15 and 39 of the SEBI LODR Regulations, 2015.

Key Points

  • HVDLE threshold increased from Rs. 1,000 crore to Rs. 5,000 crore for outstanding non-convertible debt securities
  • Entities that fall below the revised Rs. 5,000 crore threshold will no longer be classified as HVDLE
  • Amendments apply to entities that have listed non-convertible debt securities on stock exchanges
  • Once an entity’s outstanding debt reaches or exceeds Rs. 5,000 crore during the financial year, HVDLE compliance obligations apply from that date
  • Entities that cease to be HVDLE under the new threshold are exempted from enhanced compliance requirements
  • Regulation 39(2) amended regarding procedures for sub-division, consolidation, renewal, exchange and duplicate securities issuance

Regulatory Changes

Regulation 15 Amendments:

  1. Sub-regulation (1A): Modified the threshold from “one thousand crore rupees or more” to “five thousand crore rupees or more” for classification as HVDLE

  2. Proviso to Sub-regulation (1A): Changed the threshold from Rs. 1,000 crore to Rs. 5,000 crore for determining when compliance obligations are triggered during a financial year

  3. Explanation (2): Deleted from the regulations

  4. Sub-regulation (1AA): Terminology clarifications made to improve readability

  5. New Proviso to Sub-regulation (1AA): Added provision stating that entities no longer meeting the revised HVDLE threshold under Regulation 15(1A) will not be subject to HVDLE provisions

Regulation 39 Amendments:

  • Sub-regulation (2) replaced with new text regarding investor applications for sub-division, split, consolidation, renewal, exchange of securities, and duplicate certificates for lost, worn-out or mutilated certificates

Compliance Requirements

For Entities with Outstanding Debt Below Rs. 5,000 Crore:

  • No longer required to comply with Regulations 16-27 applicable to HVDLE
  • Relief from enhanced disclosure and compliance obligations specific to high-value debt issuers

For Entities with Outstanding Debt of Rs. 5,000 Crore or More:

  • Must comply with Regulations 16-27 as HVDLE
  • If threshold is crossed during the financial year, compliance obligations apply from the date of crossing the threshold
  • Continue to maintain enhanced governance and disclosure standards

All Listed Debt Entities:

  • Must follow revised procedures under Regulation 39(2) for securities-related investor requests
  • Ensure systems are updated to reflect the new HVDLE threshold

Important Dates

  • Notification Date: January 20, 2026 (Pausha 30, 1947 in Indian calendar)
  • Effective Date: Date of publication in the Official Gazette (January 20, 2026)
  • Gazette Reference: CG-MH-E-22012026-269525, No. 52
  • Applicability: Immediate effect from gazette publication date

Impact Assessment

Positive Impacts:

  1. Reduced Compliance Burden: Entities with outstanding debt between Rs. 1,000 crore and Rs. 5,000 crore will benefit from reduced compliance obligations, lowering administrative costs

  2. Regulatory Rationalization: The five-fold increase in threshold reflects market evolution and inflation adjustments since 2015

  3. Operational Efficiency: Smaller debt issuers can focus resources on core business rather than enhanced regulatory compliance

Considerations:

  1. Reclassification Required: Entities must assess their current outstanding debt to determine if they continue to be classified as HVDLE

  2. System Updates: Stock exchanges and depositories will need to update their systems to reflect the new threshold

  3. Investor Disclosure: Entities moving out of HVDLE category should communicate the change to investors and stakeholders

  4. Governance Standards: While compliance burden reduces, entities should maintain good governance practices voluntarily

Market Impact:

  • Large number of mid-sized debt issuers will be relieved from stringent HVDLE compliance requirements
  • Focus of enhanced scrutiny will shift to larger debt issuers with Rs. 5,000 crore+ outstanding
  • May encourage more corporate debt issuances in the Rs. 1,000-5,000 crore range
  • Stock exchanges and regulators can focus monitoring resources on genuinely large debt issuers

Impact Justification

Significant regulatory amendment changing HVDLE threshold from Rs. 1,000 crore to Rs. 5,000 crore, affecting compliance obligations for debt issuers. High importance due to regulatory change but medium impact as it relaxes compliance burden for entities between the old and new thresholds.