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Informist, Monday, Oct. 27, 2025

--SEBI moots upping high value debt listed entity threshold to INR 50 bln

--CONTEXT: Current threshold for high value debt listed entity is INR 10 bln

NEW DELHI – The Securities and Exchange Board of India proposed increasing the threshold for categorisation of a high value debt listed entity to INR 50 billion from INR 10 billion currently, amid other proposals in a consultation paper Monday. The aim of the new regulations is to increase the ease of doing business and reduce the compliance burden on regulated entities, in line with feedback from market participants, the regulator said.

Following the change to an INR-50-billion threshold, the number of high-value debt listed entities will fall to 48 from the 137 as on Jun. 30, SEBI said. The new list will also bring down the number of public-sector undertakings down to 15 from 20. The regulator sought feedback on the consultation paper by Nov. 17.

Entities with listed non-convertible debentures above the threshold are held to stricter corporate governance standards, as outlined by SEBI. The norms were mandated only after March this year, when the initial identification threshold detailed in 2021 was doubled to INR 10 billion of listed debt securities.

In addition to the identification criteria, the corporate governance norms are also proposed to be eased in line with relaxations given to listed equity entities in December last year, the consultation paper said. The regulator proposed that a subsidiary may only be declared as a material subsidiary when its turnover, rather than income, or net worth exceeds 20% of the consolidated turnover or net worth of the listed entity in the last accounting year.

The consultation also had several proposals for board approval, looking to extend the time period of shareholder confirmation of new board or management appointees to three months after regulatory approval rather than including them. It also seeks to exempt the companies from needing shareholder approval for board appointees from financial sector regulators, courts or tribunals. SEBI proposed to give the board three months to fill vacancies in various board committees.

However, debt listed entities must get permission for a non-executive director beyond 75 years before that age threshold is reached, the regulator proposed. Additionally, the board's recommendations to shareholders should also outline its own rationale.

SEBI also proposed to do away with the three-month deadline for the appointment of a new independent director on the board, provided the debt-listed entity meets the listed obligations for number of independent directors. The regulator also wants to do away with shareholder approval for the sale of assets from a material subsidiary to another subsidiary, provided the assets are within the group.

Boards should have the power to prescribe timelines for periodic compliance reports rather SEBI mandating 21 days, the regulator proposed. Moreover, the periodic compliance report need not disclose material transactions with related parties as these are captured in the half-yearly reports for equity listed entities, the consultation paper said. Finally, the regulator also sought to give high value debt listed entities three months to appoint key management personnel when coming out of a corporate insolvency resolution process, as long as it has one full-time key management personnel identified during that time.   End

Reported by Aaryan Khanna

Edited by Deepshikha Bhardwaj

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