Description
BSE places 5 securities under various stages of the Graded Surveillance Measure (GSM) framework, restricting their trading activity. One security moves lower in the GSM framework due to inclusion in the ESM framework.
Summary
BSE has moved 5 securities into various stages of the Graded Surveillance Measure (GSM) framework effective from the date of this circular. GSM is a mechanism to alert and advise investors to be extra cautious while dealing in securities that show signs of unusual price movement or lack of fundamental strength. One security (Sadbhav Engineering Ltd) is being placed at a lower GSM stage due to its concurrent inclusion in the Enhanced Surveillance Measure (ESM) framework.
Key Points
- 5 securities are being moved into GSM stages ranging from Stage 0 to Stage IV
- Sadbhav Engineering Ltd (BSE: 532710, ISIN: INE226H01026) is being moved to GSM Stage 0 — it is marked (#) as moving to a lower stage due to inclusion in the ESM framework
- Universal Office Automation Ltd (BSE: 523519, ISIN: INE951C01012) is moving to GSM Stage II
- Neelkanth Limited (BSE: 512565, ISIN: INE581D01015) is moving to GSM Stage III
- V R Woodart Ltd (BSE: 523888, ISIN: INE317D01014) is moving to GSM Stage IV
- Purohit Construction Limited (BSE: 538993, ISIN: INE147J01012) is moving to GSM Stage IV
- Securities marked (#) are placed at a lower GSM stage due to simultaneous inclusion in the ESM framework
- Securities marked ($) are placed at a lower GSM stage due to inclusion in the IBC (Insolvency and Bankruptcy Code) framework
Regulatory Changes
The following securities are newly classified under the GSM framework:
| Security Code | ISIN | Security Name | GSM Stage |
|---|---|---|---|
| 532710 | INE226H01026 | Sadbhav Engineering Ltd# | 0 |
| 523519 | INE951C01012 | Universal Office Automation Ltd | II |
| 512565 | INE581D01015 | Neelkanth Limited | III |
| 523888 | INE317D01014 | V R Woodart Ltd | IV |
| 538993 | INE147J01012 | Purohit Construction Limited | IV |
Higher GSM stages impose progressively stricter trading conditions, including trade-to-trade settlement, price bands, and periodic call auction sessions.
Compliance Requirements
- Brokers and trading members must note the GSM stage of affected securities and communicate restrictions to clients accordingly
- Investors holding or intending to trade these securities must be aware that trading is subject to enhanced surveillance conditions specific to each GSM stage
- Companies placed under GSM must comply with any additional disclosure or compliance requirements associated with their assigned GSM stage
- Sadbhav Engineering Ltd investors should additionally note the concurrent ESM framework applicability
Important Dates
- Effective Date: 26 February 2026 (date of circular issuance)
- Securities remain under their respective GSM stages until BSE issues a subsequent circular revising or removing their classification
Impact Assessment
The placement of these 5 securities under GSM has significant implications for affected investors and traders:
- Trading restrictions: Higher GSM stages (III and IV, applicable to Neelkanth Limited, V R Woodart Ltd, and Purohit Construction Limited) impose the most severe trading curbs, including trade-to-trade settlement and potential call auction mechanisms, reducing liquidity substantially
- Investor sentiment: GSM classification signals BSE’s concern over price discovery or fundamental weakness, likely to dampen investor interest and increase selling pressure
- Sadbhav Engineering: The dual classification under both GSM (Stage 0) and ESM frameworks reflects heightened regulatory scrutiny; however, placement at Stage 0 (lowest GSM stage) partially mitigates the severity relative to higher-stage peers
- Exit difficulty: For existing holders of Stage III and IV securities, exiting positions may become more difficult due to reduced liquidity and circuit breaker restrictions inherent in higher GSM stages
- Market integrity: The circular reinforces BSE’s ongoing commitment to protecting retail investors from speculative or manipulative activity in low-quality or fundamentally weak securities
Impact Justification
GSM classification directly restricts trading in affected securities, signals regulatory concerns about price integrity or fundamentals, and carries significant consequences for investors holding or transacting in these stocks.