Description

NSE to shift trading of 5 companies to Z Category (BZ) effective January 2, 2026 due to non-compliance with Regulation 76 of SEBI Depository Regulations for submission of reconciliation of share capital audit report for two consecutive quarters.

Summary

NSE has identified 5 companies that failed to submit reconciliation of share capital audit reports as required under Regulation 76 of SEBI Depositories and Participants Regulations, 2018 for two consecutive quarters (June 30, 2025 and September 30, 2025). Trading in these securities will be shifted to Z Category (BZ series) with effect from January 2, 2026, unless compliance is achieved by December 30, 2025. Additionally, 17 companies already trading in Z Category remain non-compliant with the same regulation.

Key Points

  • 5 companies identified for potential shift to Z Category: Brightcom Group Limited, Debock Industries Limited, Future Consumer Limited, Rajesh Exports Limited, and Shrenik Limited
  • Non-compliance relates to Regulation 76 (submission of reconciliation of share capital audit report) for Q2 and Q3 2025 (June 30 and September 30, 2025)
  • Companies have until December 30, 2025 to comply and avoid Z Category transfer
  • 17 companies already in Z Category also identified as non-compliant with same regulation
  • All trades in Z Category securities settled on Trade for Trade (T2T) basis
  • Action based on SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024

Regulatory Changes

No new regulatory changes introduced. This circular implements existing provisions of SEBI (Depositories and Participants) Regulations, 2018, specifically Regulation 76 requiring submission of reconciliation of share capital audit reports.

Compliance Requirements

For Listed Companies:

  • Must submit reconciliation of share capital audit report as per Regulation 76 of SEBI Depository Regulations
  • Companies currently identified (BCG, DIL, FCONSUMER, RAJESHEXPO, SHRENIK) must comply on or before December 30, 2025 to avoid Z Category transfer
  • Failure to comply results in trading restrictions (Trade for Trade basis only)

For Trading Members:

  • Aware that securities in Z Category (BZ/SZ series) are subject to Trade for Trade settlement
  • Inform clients about trading restrictions on affected securities

Important Dates

  • December 22, 2025: Circular issued
  • December 30, 2025: Last date for identified companies to comply with Regulation 76 to avoid Z Category transfer
  • January 2, 2026: Effective date for transfer of non-compliant securities to Z Category (BZ series)
  • Non-compliance periods: June 30, 2025 and September 30, 2025 (two consecutive quarters)

Impact Assessment

Market Impact:

  • High impact on liquidity for affected securities due to Trade for Trade settlement mechanism
  • Significant for Rajesh Exports Limited, a major listed entity in gems and jewelry sector
  • Investors face reduced trading flexibility and potentially wider bid-ask spreads

Operational Impact:

  • Trading members must adjust systems for T2T settlement of these securities
  • Margin requirements and settlement processes differ for Z Category securities
  • Increased compliance monitoring required for brokers handling these securities

Investor Impact:

  • Reduced liquidity makes entry and exit more difficult
  • No intraday trading allowed (T2T basis only)
  • Potential price discovery issues due to restricted trading
  • 22 total companies affected (5 new + 17 already in Z Category)

Companies to be Shifted to Z Category (Effective January 2, 2026)

  1. BCG - Brightcom Group Limited
  2. DIL - Debock Industries Limited
  3. FCONSUMER - Future Consumer Limited
  4. RAJESHEXPO - Rajesh Exports Limited
  5. SHRENIK - Shrenik Limited

Companies Already in Z Category (Also Non-Compliant)

  1. AGS Transact Technologies Limited
  2. Ankit Metal & Power Limited
  3. Arshiya Limited
  4. Future Enterprises Limited
  5. Future Lifestyle Fashions Limited
  6. Gensol Engineering Limited
  7. Housing Development and Infrastructure Limited
  8. Impex Ferro Tech Limited
  9. Lakshmi Precision Screws Limited
  10. Morarjee Textiles Limited
  11. Omkar Speciality Chemicals Limited
  12. Ortel Communications Limited
  13. Rajvir Industries Limited
  14. Reliance Home Finance Limited
  15. Setubandhan Infrastructure Limited
  16. SKIL Infrastructure Limited
  17. Shree Ram Proteins Limited

Impact Justification

Restricts trading to T2T basis for non-compliant companies, significantly impacting liquidity and trading flexibility. Includes major companies like Rajesh Exports Limited.