Description
NSE circular regarding shifting of securities to Z Category for companies non-compliant with Regulation 33 (submission of financial results) for two consecutive quarters.
Summary
NSE has identified multiple companies as non-compliant with Regulation 33 (Submission of Financial Results) of SEBI Listing Regulations for two consecutive quarters (March 31, 2025 and June 30, 2025). Trading in securities of four companies will be transferred to Z Category (BZ Series) effective October 27, 2025, unless they comply by October 20, 2025. Additionally, 25 companies already in Z Category remain there due to various non-compliances.
Key Points
- Four companies to be shifted to Z Category: BF Utilities Limited, Gensol Engineering Limited, Simbhaoli Sugars Limited, and Supreme Engineering Limited
- Non-compliance relates to failure to submit financial results for Q4 FY2025 (March 31, 2025) and Q1 FY2026 (June 30, 2025)
- Companies have until October 20, 2025 to comply and avoid Z Category shifting
- 25 additional companies already trading in Z Category will continue in that category
- All trades in Z Category securities will be settled on Trade for Trade basis
- Circular references SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024
Regulatory Changes
No new regulatory changes introduced. This circular enforces existing provisions under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding submission of financial results.
Compliance Requirements
- Companies identified must comply with Regulation 33 by submitting pending financial results for March 31, 2025 and June 30, 2025 quarters
- Deadline for compliance: October 20, 2025
- Failure to comply will result in transfer to Z Category with trade-for-trade settlement restrictions
- Members and investors must note that securities in Z Category have restricted liquidity
Important Dates
- October 14, 2025: Circular issue date
- October 20, 2025: Deadline for companies to comply with Regulation 33 to avoid Z Category transfer
- October 27, 2025: Effective date for transfer of securities to Z Category (BZ Series) if non-compliance continues
- March 31, 2025: First quarter of non-compliance (Q4 FY2025 financial results)
- June 30, 2025: Second consecutive quarter of non-compliance (Q1 FY2026 financial results)
Impact Assessment
Market Impact: Transfer to Z Category significantly restricts liquidity as all trades are settled on trade-for-trade basis with no intraday squaring off allowed. This typically results in reduced trading volumes and increased price volatility.
Investor Impact: Investors holding securities of these companies face liquidity constraints and potential difficulty in exiting positions. The Z Category designation serves as a warning signal about corporate governance issues.
Operational Impact: Trading members must adjust their systems and procedures to handle trade-for-trade settlement for these securities. Risk management protocols need to account for reduced liquidity.
Company Impact: Z Category classification negatively affects company reputation, investor confidence, and stock valuations. It may also trigger margin increases and make fundraising more difficult.
Impact Justification
Affects trading category of multiple companies, restricting liquidity through trade-for-trade settlement, impacting investor ability to trade these securities.