Graded Surveillance Measure (GSM) - Securities Moving into GSM Stages

Description

BSE notifies movement of 7 securities into various stages of the Graded Surveillance Measure (GSM) framework, with 4 securities entering Stage I, 1 entering Stage II, and 2 entering Stage III.

Summary

BSE has issued a notice listing 7 securities that are being moved into various stages of the Graded Surveillance Measure (GSM) framework. GSM is a regulatory mechanism designed to protect investors from abnormal price movements in securities that show signs of manipulation or lack fundamental justification. Securities placed under GSM face enhanced surveillance and trading restrictions commensurate with their assigned stage.

Key Points

• 4 securities are being moved into GSM Stage I: Nibe Ordnance and Maritime Ltd, Bansisons Tea Industries Ltd, VR Woodart Ltd, and Yuranus Infrastructure Ltd
• 1 security is being moved into GSM Stage II: Indergiri Finance Ltd
• 2 securities are being moved into GSM Stage III: Avi Products India Ltd and Blue Chip India Ltd
• Higher GSM stages imply stricter trading restrictions and higher surveillance intensity
• Securities may move to a lower GSM stage if they are also included in the ESM (Enhanced Surveillance Measure) or IBC (Insolvency and Bankruptcy Code) frameworks

Regulatory Changes

The following securities are placed under the GSM framework effective from this circular:

Note: Securities marked (#) move to a lower GSM stage due to inclusion in the ESM Framework. Securities marked ($) move to a lower GSM stage due to inclusion in the IBC Framework.

Compliance Requirements

• Brokers and trading members must ensure clients are informed of the GSM status of these securities before executing trades
• Investors holding or intending to trade in these securities must be aware of the additional margin requirements and trading restrictions applicable under their respective GSM stages
• Companies placed under GSM should engage with BSE to understand the criteria for removal from the framework
• Higher GSM stages (II and III) impose progressively stricter conditions including trade-to-trade settlement, periodic call auctions, and increased margins

Important Dates

• Effective Date: 2026-02-23 (date of circular issuance)
• Securities will remain under GSM until reviewed and formally removed by BSE based on compliance with exit criteria

Impact Assessment

High impact on affected securities and their investors:

• Stage I securities (Nibe Ordnance, Bansisons Tea, VR Woodart, Yuranus Infrastructure): Subject to enhanced monitoring; trading may be shifted to trade-to-trade (T2T) segment, requiring full upfront delivery and payment, reducing speculative activity
• Stage II securities (Indergiri Finance): Faces more restrictive trading conditions than Stage I, with higher margin requirements and possible periodic call auction mechanism
• Stage III securities (Avi Products India, Blue Chip India): Most severe restrictions among this batch; trading in these scrips will be subject to stringent conditions including high additional surveillance margins and limited trading windows
• Overall market liquidity for these 7 scrips will be significantly reduced, and retail investors should exercise caution
• Institutional investors and portfolio managers holding these securities may need to reassess their positions in light of the enhanced restrictions

Impact Justification

GSM placement directly restricts trading conditions for affected securities, impacting liquidity and investor access. Stage III securities face the most severe restrictions. Investors and traders holding these securities must take immediate note.