High-value debt listed entities: SEBI proposes doubling threshold to ₹1,000 crore

SEBI proposes raising threshold for HVDLEs to ₹1,000 crore, introduces governance norms, and tweaks ESG rating framework for ERPs.

Markets regulator Securities and Exchange Board of India (SEBI) has proposed raising the threshold for identifying High Value Debt Listed Entities (HVDLEs) to ₹1,000 crore from ₹500 crore at present to reduce compliance burdens.

Currently, an entity having outstanding value of listed non-convertible debt securities of ₹500 crore and above are referred to as 'High Value Debt Listed Entities'. In its consultation paper, SEBI has proposed introducing a sunset clause that would end governance obligations if an HVDLE's outstanding debt falls below the threshold for a specified period, providing more flexibility.

It has suggested a dedicated chapter within LODR (Listing Obligations and Disclosure Requirements) Regulations focussed solely on corporate governance norms for HVDLEs distinguishing them from equity-listed entities.

Also, it has been proposed filing of governance reports in XBRL format, voluntary Business Responsibility and Sustainability Reporting (BRSR), and harmonise HVDLE reporting with equity-listed entities.

Further, SEBI has proposed relaxation for HVDLEs which are not companies as per the Companies Act, 2013, relaxation with regard to the constitution of the Nomination and Remuneration Committee (NRC), Risk Management Committee (RMC) and Stakeholders Relationship Committee (SRC).

To avoid the constitution of multiple committees by HVDLEs, SEBI has proposed that the board of directors of an HVDLE may either choose to constitute NRC/RMC/SRC or may ensure that the functions of these committees are delegated and discharged by the audit committee.

"It is proposed that the threshold of listed outstanding non-convertible securities for identification of a debt listed entity as HVDLE may be increased from ₹500 crore to ₹1,000 crore," SEBI said in its consultation paper on Thursday (October 31, 2024.)