Description

NSE adds 3 securities to ESM Stage I with 100% margin requirement effective December 22, 2025, and moves 3 securities from Stage I to Stage II under enhanced surveillance framework.

Summary

NSE has issued updates to its Enhanced Surveillance Measure (ESM) framework effective December 19-22, 2025. Three securities (AGRITECH, AURIGROW, SATECH) will be added to ESM Stage I with a minimum 100% margin requirement and shifted from Rolling Settlement to Trade-for-Trade segment. Additionally, three securities (GSTL, SALSTEEL, TVSELECT) will move from Stage I to Stage II with stricter surveillance measures including a 2% price band under Periodic Call Auction. No securities are being excluded from the ESM framework.

Key Points

  • Three new securities added to ESM Stage I: Agri-Tech (India) Limited, Auri Grow India Limited, and S A Tech Software India Limited
  • 100% margin requirement applicable on all open positions as of December 19, 2025, and new positions from December 22, 2025
  • Securities in Stage I will shift from Rolling Settlement segment (EQ/SM series) to Trade-for-Trade segment (BE/ST series) effective December 22, 2025
  • Three securities (GSTL, SALSTEEL, TVSELECT) moving from Stage I to Stage II with additional restrictions
  • Stage II securities will be under Trade-for-Trade with 2% price band under Periodic Call Auction from December 19, 2025
  • No securities are being removed from the ESM framework
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

New Additions to ESM Stage I (December 22, 2025):

  • Agri-Tech (India) Limited (AGRITECH) - ISIN: INE449G01018
  • Auri Grow India Limited (AURIGROW) - ISIN: INE925Y01036
  • S A Tech Software India Limited (SATECH) - ISIN: INE0BSN01013

Movement from Stage I to Stage II (December 19, 2025):

  • Globesecure Technologies Limited (GSTL) - ISIN: INE00WS01056
  • S.A.L. Steel Limited (SALSTEEL) - ISIN: INE658G01014
  • TVS Electronics Limited (TVSELECT) - ISIN: INE236G01019

No Movement from Stage II to Stage I

No Exclusions from ESM Framework

Compliance Requirements

For Stage I Securities (AGRITECH, AURIGROW, SATECH):

  • Minimum 100% margin on all open positions as on December 19, 2025
  • Minimum 100% margin on all new positions created from December 22, 2025
  • Trading only in Trade-for-Trade segment (BE/ST series) from December 22, 2025
  • No intraday trading allowed

For Stage II Securities (GSTL, SALSTEEL, TVSELECT):

  • Trade-for-Trade settlement mandatory
  • 2% price band restriction under Periodic Call Auction mechanism
  • Enhanced margin requirements as per Stage II norms
  • Additional surveillance measures apply

General:

  • Market participants must ensure compliance with all margin requirements before trading
  • ESM measures are in addition to other prevailing surveillance measures
  • Members should refer to NSE FAQs on ESM for detailed framework information

Important Dates

  • December 18, 2025: Circular issued (Ref No: 980/2025)
  • December 19, 2025:
    • 100% margin applicable on all open positions for new Stage I securities
    • Stage II restrictions (2% price band under Periodic Call Auction) become effective for GSTL, SALSTEEL, TVSELECT
  • December 22, 2025:
    • New Stage I securities shift from EQ/SM to BE/ST series
    • 100% margin requirement on new positions for AGRITECH, AURIGROW, SATECH

Impact Assessment

Market Impact:

  • High impact on liquidity for all six affected securities due to Trade-for-Trade restrictions and enhanced margins
  • Stage I securities (AGRITECH, AURIGROW, SATECH) will see complete elimination of intraday trading opportunities
  • Stage II securities (GSTL, SALSTEEL, TVSELECT) face additional price band constraints limiting price discovery
  • 100% margin requirement significantly increases capital requirements for traders and investors

Trading Impact:

  • Increased transaction costs due to mandatory delivery-based trading
  • Reduced trading volumes expected due to higher capital requirements
  • Limited price movement (2% band) for Stage II securities may deter active traders
  • Periodic Call Auction mechanism will reduce trading frequency for Stage II securities

Investor Impact:

  • Existing position holders must arrange for 100% margin by December 19, 2025
  • Short-term traders likely to exit positions due to unfavorable trading conditions
  • Long-term investors may face reduced liquidity when attempting to exit positions
  • Higher settlement obligations with no intraday square-off possibilities

Operational Considerations:

  • Brokers must update risk management systems to enforce 100% margin requirements
  • Trading systems must reflect segment changes from EQ/SM to BE/ST
  • Enhanced monitoring required for compliance with Stage II price band restrictions
  • Member firms should proactively communicate changes to clients holding positions in affected securities

Impact Justification

High severity due to 100% margin requirement on affected securities and shift to Trade-for-Trade segment with significant trading restrictions. Directly impacts liquidity and trading costs for six securities.