The Securities and Exchange Board of India (SEBI) on Wednesday approved a sharp increase in the threshold for classifying companies as High Value Debt
Listed Entities (HVDLEs), a move aimed at easing compliance pressures while retaining safeguards for investors in the corporate bond market.
Under the revised framework, entities will be designated as HVDLEs only if they have outstanding listed non-convertible debt of ₹5,000 crore or more, up from the existing ₹1,000 crore threshold. The decision follows a consultation process initiated by the regulator in October and is expected to significantly narrow the pool of entities subject to enhanced governance norms.
SEBI chairman Tuhin Kanta Pandey said the earlier threshold had become restrictive, particularly for large borrowers such as non-banking financial companies (NBFCs). “The ₹1,000 crore limit is quite low relative to the scale of debt raised by many entities and ends up creating an unnecessary constraint. Raising it to ₹5,000 crore is an ease-of-doing-business measure,” he said at a press briefing after the board meeting.
HVDLEs are required to comply with a set of corporate governance and related-party transaction (RPT) norms broadly aligned with those applicable to equity-listed companies. SEBI has argued that applying these standards to relatively smaller debt issuers imposes disproportionate compliance costs, discouraging them from tapping the bond market.
According to the regulator’s consultation paper, the number of entities classified as HVDLEs will fall to 48 from 137 under the revised threshold—effectively removing around two-thirds of issuers from the stricter regulatory net. SEBI said this recalibration better reflects the size and risk profile of issuers that warrant heightened oversight.
Alongside the threshold revision, the board also approved rationalisation of norms related to related-party transactions and subsidiary compliance for debt-listed entities, further trimming regulatory obligations for smaller issuers.
SEBI maintained that the changes strike a balance between easing business conditions and protecting investors. “The objective is to encourage wider participation in the corporate bond market without diluting governance standards where systemic risk is higher,” the regulator said in its consultation note.
Market participants expect the move to lower entry barriers for companies considering bond issuances, potentially broadening and deepening India’s corporate debt market over time.
