SEBI Proposes Major Threshold Increase for High-Value Debt Entities to Boost Ease of Doing Business
SDG 9: Industry, Innovation and Infrastructure | SDG 16: Peace, Justice and Strong Institutions
Institutions: Securities and Exchange Board of India (SEBI) | Ministry of Finance
The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing significant relaxations to the Corporate Governance (CG) norms applicable to High Value Debt Listed Entities (HVDLEs), aiming to enhance the Ease of Doing Business (EODB). The core proposal is to dramatically increase the threshold for defining an HVDLE from the current ₹1,000 crore to ₹5,000 crore in outstanding listed non-convertible debt securities. This move recognizes that the current threshold may be too low for large financial institutions like Non-Banking Financial Companies (NBFCs).
This proposal follows a previous change in March 2025, when the threshold was mandatorily set at ₹1,000 crore. The key EODB measures proposed include:
Relaxation on Independent Directors: Omit the requirement that a resigning or removed Independent Director must be replaced within three months, provided the HVDLE still meets the minimum board composition rules.
Flexible Compliance Timelines: Replace the current rigid 21-day timeline for submitting periodic compliance reports with an enabling provision for the Board to prescribe the timeline from time to time.
Reduced Disclosure: Remove the requirement for HVDLEs to disclose material transactions with related parties along with the periodic compliance report.
This consultation paper marks a regulatory shift toward reducing the compliance burden on high-value debt issuers, particularly in the financial sector, which often lists large debt amounts for capital raising. By raising the HVDLE threshold to ₹5,000 crore, SEBI aims to strategically focus rigorous governance requirements only on the largest debt-issuing entities, promoting greater efficiency and capital access for a broader range of financial companies.
What is a High Value Debt Listed Entity (HVDLE)? → A High Value Debt Listed Entity (HVDLE) is a company that has listed a specified outstanding amount of non-convertible debt securities (like bonds or debentures) on a stock exchange. SEBI mandates stricter Corporate Governance (CG) norms for these entities to protect debt investors, similar to those applied to equity-listed companies. The threshold determines which companies must comply with these stricter rules.
Follow the full update here: Consultation paper on Relaxation in the threshold for identification of High Value Debt Listed Entities (HVDLEs)