Description

NSE implements surveillance measures on four securities with high encumbrance under SEBI (SAST) Regulation 2011, requiring minimum 35% margin effective December 5, 2025.

Summary

NSE has issued a surveillance circular adding four securities to the framework for companies with high encumbrance as per Regulation 28(3) of SEBI (SAST) Regulation 2011. The affected securities will attract a minimum 35% margin in both Equity and Equity Derivatives segments effective December 5, 2025. This is a continuation of previous circulars NSE/SURV/42507 (October 24, 2019) and NSE/SURV/44169 (April 17, 2020).

Key Points

  • Four securities added to high encumbrance surveillance framework
  • Minimum 35% margin requirement applies to all open positions as on December 4, 2025 and new positions from December 5, 2025
  • Applies to both Equity and Equity Derivatives segments
  • No securities are being removed from the framework (Annexure II shows “Nil”)
  • Consolidated list now contains five securities total
  • Surveillance measure is in conjunction with all other prevailing surveillance measures
  • Companies can submit representations by 5:00 PM on December 3, 2025

Securities Affected

Newly Added (Effective December 5, 2025):

  1. Jayaswal Neco Industries Limited (JAYNECOIND) - INE854B01010
  2. Sagar Cements Limited (SAGCEM) - INE229C01021
  3. Cohance Lifesciences Limited (COHANCE) - INE03QK01018
  4. Vikram Solar Limited (VIKRAMSOLR) - INE078V01014

Existing Securities (Already Under Framework):

  1. SHARE INDIA SECURITIES LIMITED (SHAREINDIA) - INE932X01026

Securities Excluded:

  • None (Annexure II shows “Nil”)

Regulatory Framework

This surveillance measure is implemented under Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011, which deals with encumbrance of shares. The exchange monitors companies where promoter or non-promoter shareholding has high levels of encumbrance (pledged shares).

Compliance Requirements

  • Trading members must ensure minimum 35% margin for all positions in the listed securities
  • Margin applies to both existing open positions (as on December 4, 2025) and new positions created from December 5, 2025
  • Applies to transactions in both Equity and Equity Derivatives segments
  • Companies may submit representations to the Exchange by 5:00 PM on December 3, 2025 for consideration

Important Dates

  • December 2, 2025: Circular issued
  • December 3, 2025: Securities become eligible to move out from framework (if applicable)
  • December 3, 2025, 5:00 PM: Deadline for company representations
  • December 4, 2025: Last day before new margin requirements apply
  • December 5, 2025: Effective date for 35% margin requirement on newly added securities

Impact Assessment

Trading Impact:

  • Significant increase in margin requirements (35% minimum) will reduce leverage available to traders
  • Higher capital requirements for maintaining positions in affected securities
  • May lead to reduced liquidity and trading volumes in these securities
  • Traders with existing positions must arrange additional margin by December 4, 2025

Market Impact:

  • Price volatility may increase due to forced liquidation of leveraged positions
  • Investor sentiment may be negatively affected due to surveillance action
  • Reduced participation from leveraged traders may impact market depth

Operational Impact:

  • Brokers must update margin requirements in their systems
  • Position monitoring and margin collection processes need immediate adjustment
  • Risk management systems must be updated to reflect higher margin requirements

Company Impact:

  • Being placed under surveillance framework may affect investor confidence
  • However, NSE clarifies this is purely a market surveillance measure and not an adverse action against the company
  • Companies have opportunity to submit representations by December 3, 2025

The measure is subject to periodic review and will be evaluated alongside other surveillance measures imposed by the exchange.

Impact Justification

High margin requirement of 35% significantly impacts trading in affected securities. Immediate action required for traders holding positions in these stocks.