Sebi Proposes New Framework to Ease Compliance for High Value Debt Listed Entities

The Securities and Exchange Board of India (Sebi) has proposed increasing the threshold for identifying High Value Debt Listed Entities (HVDLEs) from Rs 1,000 crore to Rs 5,000 crore. This move aims to reduce compliance burdens for companies, affecting mostly those with large debts and aligning governance norms with equity-listed companies.

The Securities and Exchange Board of India (Sebi) is considering raising the threshold for identifying High Value Debt Listed Entities (HVDLEs) to Rs 5,000 crore, up from the current Rs 1,000 crore. The proposal, outlined in Sebi's latest consultation paper, aims to lessen the compliance load on companies with significant debt obligations.

This initiative could result in a considerable drop in the number of companies classified as HVDLEs, from 137 to just 48. According to Sebi, such a move would ease the regulatory requirements for businesses, promoting a more business-friendly environment.

Sebi has also suggested aligning HVDLE governance norms with those of equity-listed firms to ensure consistency. Among other recommendations, changes in financial terminology, shareholder approvals, and governance continuity measures have been put forward, aiming to streamline operations and reduce costs for affected companies.

(With inputs from agencies.)