Description

SEBI amends LODR Regulations, 2015 to revise 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, which amend the LODR Regulations, 2015. The key change is the revision of the threshold for classification as High Value Debt Listed Entity (HVDLE) from Rs 1,000 crore to Rs 5,000 crore of outstanding non-convertible debt securities. These amendments come into effect from the date of publication in the Official Gazette (January 20, 2026).

Key Points

  • HVDLE threshold increased from Rs 1,000 crore to Rs 5,000 crore of outstanding non-convertible debt securities
  • Entities with less than Rs 5,000 crore of listed non-convertible debt securities will no longer be classified as HVDLE
  • Regulations 15 to 27 will apply only to entities exceeding the new Rs 5,000 crore threshold
  • The proviso ensures entities falling below the revised threshold are no longer subject to HVDLE provisions
  • Amendments also made to Regulation 39 regarding investor requests for sub-division, split, consolidation, renewal, exchange, and duplicate securities
  • Notification published in the Official Gazette on January 20, 2026

Regulatory Changes

Regulation 15 Amendments:

  1. Sub-regulation (1A): Modified to increase the HVDLE threshold from Rs 1,000 crore to Rs 5,000 crore for entities with listed non-convertible debt securities

  2. Proviso to Sub-regulation (1A): Threshold for triggering HVDLE status during a financial year raised from Rs 1,000 crore to Rs 5,000 crore

  3. Explanation (2): Deleted

  4. Sub-regulation (1AA): Terminology clarified and a new proviso added stating that provisions will not apply to entities that cease to be HVDLE under the revised threshold of Regulation 15(1A)

Regulation 39 Amendment:

Sub-regulation (2) replaced with new provisions regarding processing of investor requests for sub-division, split, consolidation, renewal, exchange of securities, and issuance of duplicate certificates for lost, old, defaced, or mutilated certificates.

Compliance Requirements

For Entities Previously Classified as HVDLE (Rs 1,000 crore - Rs 5,000 crore range):

  • No longer required to comply with Regulations 15 to 27 applicable to HVDLE
  • Relief from enhanced disclosure and compliance obligations specific to HVDLE

For Entities Above Rs 5,000 crore:

  • Continue to comply with all HVDLE provisions under Regulations 15 to 27
  • Must monitor if outstanding value falls below Rs 5,000 crore during the financial year

For All Listed Entities:

  • Comply with amended Regulation 39(2) regarding investor service requests
  • Review existing processes for handling securities-related investor requests

Important Dates

  • January 20, 2026: Notification published in Official Gazette
  • Effective Date: January 20, 2026 (date of gazette publication)
  • Immediate Impact: Entities between Rs 1,000 crore and Rs 5,000 crore cease to be HVDLE from effective date

Impact Assessment

Market Impact:

  • Positive for mid-sized debt issuers who will be relieved from stringent HVDLE compliance requirements
  • Reduces regulatory burden for entities with debt securities between Rs 1,000 crore and Rs 5,000 crore
  • Focuses enhanced oversight on larger debt issuers (above Rs 5,000 crore)

Operational Impact:

  • Entities de-classified from HVDLE status can reduce compliance costs and reporting frequency
  • Listed entities need to reassess their regulatory classification and applicable compliance obligations
  • Registrars and Transfer Agents must update systems for Regulation 39 compliance

Investor Impact:

  • Concentrated regulatory scrutiny on higher-value debt issuers may enhance investor protection for larger exposures
  • Streamlined investor service processes under amended Regulation 39

Compliance Impact:

  • Immediate review required by entities near the threshold to determine current classification
  • Entities must update internal compliance frameworks based on new classification
  • Legal and compliance teams need to assess applicability of various LODR provisions

Impact Justification

Significant regulatory amendment that changes the threshold for HVDLE classification from Rs 1,000 crore to Rs 5,000 crore, reducing compliance burden for mid-sized debt issuers while maintaining oversight for larger entities. Affects multiple entities with listed debt securities.