Description

SEBI amends LODR regulations increasing the threshold for High Value Debt Listed Entities (HVDLE) from Rs. 1,000 crore to Rs. 5,000 crore of outstanding non-convertible debt securities.

Summary

SEBI has notified the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2026, published in the Gazette of India 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 of outstanding listed non-convertible debt securities. This significantly raises the bar for entities required to comply with enhanced disclosure and governance requirements under Regulations 15 to 27.

Key Points

  • HVDLE threshold increased from Rs. 1,000 crore to Rs. 5,000 crore of outstanding non-convertible debt securities
  • Entities that fall below the revised Rs. 5,000 crore threshold will no longer be classified as HVDLE
  • Regulations 15 to 27 of LODR apply only to entities meeting the HVDLE criteria
  • The threshold applies to the value of existing listed non-convertible debt securities
  • If an entity’s outstanding debt crosses Rs. 5,000 crore during a financial year, HVDLE provisions apply from that date
  • Entities falling below the revised threshold are exempt from HVDLE provisions
  • Amendment comes into force from the date of publication in the Official Gazette (January 20, 2026)

Regulatory Changes

Regulation 15 Amendments:

  1. Sub-regulation 1A: Modified to increase threshold from Rs. 1,000 crore to Rs. 5,000 crore for HVDLE classification

  2. Proviso to Sub-regulation 1A: Updated threshold from Rs. 1,000 crore to Rs. 5,000 crore for entities whose debt value increases during the financial year

  3. Explanation (2): Deleted from the regulation

  4. Sub-regulation 1AA: Clarified that even if outstanding debt falls below the prescribed threshold during sub-regulation (3) period, Regulations 15-27 continue to apply

  5. New Proviso to Sub-regulation 1AA: Added provision that entities no longer meeting the revised Rs. 5,000 crore threshold will not be subject to HVDLE requirements

Regulation 39 Amendment:

Sub-regulation (2) has been replaced with new provisions regarding listed entity procedures for sub-division, split, consolidation, renewal, exchange of securities, and issuance of duplicate shares in cases of lost, worn-out, or mutilated certificates.

Compliance Requirements

For Entities Below Rs. 5,000 Crore Threshold:

  • No longer required to comply with Regulations 15-27 as HVDLE
  • Relief from enhanced disclosure and governance obligations
  • Standard LODR requirements still apply as applicable to debt listed entities

For Entities Above Rs. 5,000 Crore Threshold:

  • Must comply with full HVDLE obligations under Regulations 15-27
  • Enhanced disclosure requirements apply
  • Stricter governance and compliance standards mandatory

For Entities Crossing Threshold During FY:

  • HVDLE provisions apply from the date outstanding debt reaches or exceeds Rs. 5,000 crore
  • Immediate compliance with enhanced requirements from trigger date

Important Dates

  • Publication Date: January 20, 2026 (Pausha 30, 1947 Saka)
  • Effective Date: January 20, 2026 (regulations come into force from date of gazette publication)
  • Notification Number: SEBI/LAD-NRO/GN/2026/295
  • Gazette Reference: No. 52, The Gazette of India Extraordinary Part III Section 4

Impact Assessment

Market Impact:

  • Significant relief for mid-sized debt issuers who were previously classified as HVDLE
  • Entities with outstanding non-convertible debt between Rs. 1,000 crore and Rs. 5,000 crore will see reduced compliance burden
  • May encourage more debt issuances in the Rs. 1,000-5,000 crore range due to lower regulatory requirements
  • Estimated that numerous entities will be de-classified from HVDLE status

Compliance Impact:

  • Reduced compliance costs for entities falling below new threshold
  • Simplified reporting and disclosure obligations for affected entities
  • Focus of enhanced scrutiny now limited to larger debt issuers
  • Entities need to reassess their HVDLE status immediately

Operational Impact:

  • Companies must review outstanding debt positions as of January 20, 2026
  • RTA and compliance teams need to update systems and processes
  • Stock exchanges will update their surveillance and monitoring frameworks
  • Reduction in regulatory filings and disclosures for de-classified entities

Risk Considerations:

  • Reduced oversight for entities in Rs. 1,000-5,000 crore range
  • Investors should note differential disclosure standards based on debt size
  • Entities near Rs. 5,000 crore threshold face potential classification changes

Impact Justification

Significant regulatory change that increases HVDLE threshold five-fold from Rs. 1,000 crore to Rs. 5,000 crore, substantially reducing compliance burden for many debt issuers and changing applicability of LODR regulations 15-27.