SEBI Proposes to Raise HVDLE Threshold to Rs. 5,000 Crores Under LODR

Consultation Paper; Dated: 27.10.2025

The Securities and Exchange Board of India (SEBI) has released a Consultation Paper inviting public comments on proposed changes to the corporate governance framework applicable to High-Value Debt Listed Entities (HVDLEs) under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR).

1. Objective of the Consultation Paper

The primary objective of the proposals is to enhance ease of doing business and streamline compliance obligations for HVDLEs. SEBI aims to rationalize existing provisions and align governance norms proportionately with the size and nature of these entities.

2. Proposed Revision in HVDLE Threshold

One of the key proposals is to raise the threshold for identifying HVDLEs from the existing ₹1,000 crore to ₹5,000 crore. This relaxation is intended to reduce the compliance burden on smaller debt-listed entities while ensuring robust governance remains for larger ones.

3. Flexibility in Submission of Compliance Reports

Currently, HVDLEs are required to submit periodic compliance reports within 21 days. SEBI proposes to replace the fixed timeline with an enabling provision, empowering the Board to prescribe submission timelines from time to time.

In addition, SEBI proposes to remove the mandatory disclosure of material related party transactions (RPTs) within the same report, further easing periodic compliance.

4. Governance Relaxation for Companies Exiting CIRP

To ensure continuity of governance during transition, SEBI proposes granting an additional three months to fill vacancies in Key Managerial Personnel (KMP) positions for companies emerging from the Corporate Insolvency Resolution Process (CIRP).

However, such companies must maintain at least one full-time KMP during this interim period to comply with LODR obligations.

5. Secretarial Auditor Requirements

A new provision is proposed to cover appointment, reappointment, removal, and disqualification of Secretarial Auditors for HVDLEs. This aims to ensure accountability, consistency, and transparency in the governance framework for these entities.

6. Harmonisation of Related Party Transaction (RPT) Provisions

SEBI also seeks to harmonise RPT-related provisions by cross-referencing Regulation 23 (which deals with RPTs) in Regulation 62K of the LODR.

At the same time, the requirement for obtaining a No-Objection Certificate (NOC) from the Debenture Trustee and Debenture Holders will continue to remain in force, maintaining investor protection mechanisms.

7. Conclusion

Through these proposed amendments, SEBI aims to strike a balance between regulatory oversight and operational flexibility, ensuring that the governance framework for HVDLEs remains both effective and business-friendly.

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