Description

NSE updates Enhanced Surveillance Measure framework with new securities added to ESM Stage-I, including Mega Flex Plastics Limited and Nephro Care India Limited moving to Stage-II.

Summary

NSE has updated its Enhanced Surveillance Measure (ESM) framework effective November 19-20, 2025. Mega Flex Plastics Limited has been added to ESM Stage-I, while Nephro Care India Limited moves from Stage-I to Stage-II. Securities under ESM Stage-I will attract minimum 100% margin and shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST). Stage-II securities will be under Trade-for-Trade with 2% price band under Periodic Call Auction.

Key Points

  • Mega Flex Plastics Limited (ISIN: INE0G1D01014) added to ESM Stage-I effective November 19, 2025
  • Nephro Care India Limited (ISIN: INE0SUN01013) moves from ESM Stage-I to Stage-II
  • No securities excluded from ESM framework in this update
  • Minimum 100% margin applies on all open positions as on November 19, 2025 and new positions from November 20, 2025
  • Securities qualifying under ESM shift from Rolling Settlement segment (EQ/SM Series) to Trade-for-Trade segment (BE/ST Series)
  • Stage-II securities will have 2% price band under Periodic Call Auction
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

The circular references previous NSE circulars establishing the ESM framework (NSE/SURV/56948, NSE/SURV/57609, NSE/SURV/63361, NSE/SURV/64066, NSE/SURV/64400, and NSE/SURV/69315). The current update modifies the list of securities subject to enhanced surveillance based on predetermined criteria. Securities moving to Stage-II face additional restrictions including periodic call auction mechanism with limited price movement.

Compliance Requirements

  • Market participants must ensure minimum 100% margin on all positions in ESM securities
  • Trading members must comply with Trade-for-Trade settlement requirements for affected securities
  • Position limits and margin requirements apply to both existing positions (as of November 19, 2025) and new positions created from November 20, 2025 onwards
  • Members must note that securities in Stage-II will trade only in periodic call auction sessions with 2% price band
  • For queries, members should contact surveillance@nse.co.in

Important Dates

  • November 18, 2025: Circular issued
  • November 19, 2025: ESM changes become effective; Stage-II securities shift to Trade-for-Trade with 2% price band under Periodic Call Auction; 100% margin applies on open positions
  • November 20, 2025: Securities shift from EQ/SM to BE/ST segment; 100% margin applies on new positions created from this date

Impact Assessment

Trading Impact: Securities under ESM face significant liquidity constraints due to Trade-for-Trade settlement requirements and elimination of intraday trading. Stage-II securities face additional restrictions with only periodic call auction trading and 2% price band.

Margin Impact: The mandatory 100% margin requirement substantially increases capital requirements for market participants holding positions in affected securities, potentially leading to position unwinding.

Market Segment Impact: The shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST) fundamentally changes the trading mechanics, requiring full upfront payment and delivery.

Investor Impact: Retail and institutional investors in MEGAFLEX and NEPHROCARE stocks will experience reduced liquidity, increased transaction costs, and limited price discovery. The surveillance measure is intended to protect investors by reducing speculative activity in securities exhibiting unusual price or volume patterns.

Note: NSE clarifies that ESM shortlisting is purely for market surveillance purposes and should not be construed as adverse action against the companies.

Impact Justification

High impact due to mandatory 100% margin requirement and shift to Trade-for-Trade segment affecting trading in specified securities