Description

NSE implements surveillance measure requiring 75% minimum margin for securities with high promoter and non-promoter encumbrance under SEBI (SAST) Regulation 2011. N R Agarwal Industries Limited added to the framework.

Summary

NSE has issued a surveillance measure for companies with high promoter and non-promoter encumbrance as per Regulation 28(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011. The measure imposes a minimum 75% margin requirement in Equity and Equity Derivatives segments for identified securities. N R Agarwal Industries Limited (NRAIL) has been added to this framework effective December 22, 2025. The consolidated list now includes 5 securities under this surveillance measure.

Key Points

  • N R Agarwal Industries Limited (NRAIL, ISIN: INE740D01017) added to high encumbrance surveillance measure
  • 75% minimum margin applicable on all open positions as on December 19, 2025 and new positions from December 22, 2025
  • Margin requirement applies to both Equity and Equity Derivatives segments
  • No securities excluded from the framework in this update (Annexure II is Nil)
  • Consolidated list includes 5 securities: BEDMUTHA, BLKASHYAP, FMNL, NRAIL, and SHALPAINTS
  • Measure continues from previous circular NSE/SURV/51189 dated January 31, 2022
  • Framework subject to periodic review and works in conjunction with other exchange measures

Regulatory Changes

This circular updates the list of securities under the surveillance framework for companies with high promoter and non-promoter encumbrance per SEBI (SAST) Regulation 2011, Regulation 28(3). The framework requires enhanced margin to mitigate risks associated with pledged or encumbered shares held by promoters and non-promoters.

Compliance Requirements

  • Trading Members must ensure 75% minimum margin is collected on the newly added security (NRAIL)
  • Margin applicable on all open positions as on December 19, 2025
  • Margin applicable on all new positions created from December 22, 2025
  • Compliance required for both Equity and Equity Derivatives segments
  • Members should monitor the consolidated list of 5 securities under this framework
  • Trading members must ensure this measure is implemented alongside all other prevailing exchange measures

Important Dates

  • December 17, 2025: Circular issued
  • December 18, 2025: Securities in Annexure II (Nil) eligible to move out from framework
  • December 19, 2025: Cut-off date for open positions subject to 75% margin
  • December 22, 2025: Effective date for 75% minimum margin requirement on NRAIL for all open positions and new positions

Impact Assessment

Market Impact: The addition of NRAIL to the high encumbrance framework will significantly impact liquidity and trading activity in this security. The 75% margin requirement substantially increases capital requirements for traders and investors holding positions.

Trading Impact: Traders with existing positions in NRAIL as of December 19, 2025 must arrange for additional margin by December 22, 2025. This may lead to forced position closures if adequate margins cannot be arranged.

Derivatives Impact: F&O traders in NRAIL will face higher capital requirements, potentially reducing speculative activity and open interest in the stock.

Risk Mitigation: The measure aims to protect market integrity by addressing risks associated with highly encumbered shareholdings, where pledged shares may be subject to invocation by lenders.

Investor Consideration: The Exchange clarifies that shortlisting under this measure should not be construed as adverse action but as a prudential risk management mechanism. However, it signals elevated risk levels in the identified securities.

Impact Justification

Imposes significant 75% minimum margin requirement on affected securities in both equity and derivatives segments, directly impacting trading positions and liquidity for companies with high encumbrance levels.