Governance norms for High Value Debt Listed entities (HVDLE’s)

Background

The Securities and Exchange Board of India (SEBI) vide notification dated 7 September 2021, inserted Regulation 15(1A) in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). This regulation specifies compliance requirements for an entity that has outstanding value of listed non-convertible debt securities of INR500 crore and above, referred as High Value Debt Listed Entities (HVDLEs).

The requirements in Regulation 15(1A) relate to the composition of Board of Directors, minimum number of annual meetings, code of conduct, submission of compliance certificate, framing and implementing risk management, constitution of specialised committees, vigil mechanism, stipulations related to Related Party Transactions (RPTs) etc.

The provisions were initially applicable on a ‘comply or explain’ basis until 31 March 2023 and were extended till 31 March 2025.

New development

In order to promote ease of doing business and protect the interest of investors, SEBI constituted a working group in May 2023 comprising of representatives from the industry to review the applicability of corporate governance norms under the LODR Regulations. Based on various recommendations of the working group and internal deliberations SEBI had issued a Consultation paper dated 31 October 2024, on the proposed amendments to the LODR Regulations. On 27 March 2025, post public feedback, SEBI issued certain amendments to the LODR Regulations (Regulation 15 (1A)) mainly in relation to HVDLEs (which also have specified securities listed) and added a separate Chapter VA for corporate governance norms applicable only to HVDLEs (Amendments).

This issue of First Notes aims to provide an overview of the key amendments to the LODR Regulations impacting the HVDLEs.

The governance norms for High Value Debt Listed entities (HVDLEs) are applicable effective 1 April 2025.