SEBI, through its January 20, 2026 Notification No. SEBI/NRO-GN/2026/295, has amended the LODR Regulations to rationalise compliance for High Value Debt Listed Entities (HVDLEs) and align governance norms with market realities. The threshold for HVDLE classification has been raised from Rs. 1,000 crore to Rs. 5,000 crore of listed non-convertible debt, narrowing applicability to larger issuers. Investor servicing obligations now require actual credit of securities in demat form rather than mere issuance of confirmations. Board-related timelines have been relaxed by excluding delays caused by regulatory approvals, and shareholder approval is no longer required for regulator-, court- or trustee-nominated directors. Related party transaction compliance has been streamlined by aligning it largely with Regulation 23, removing multiple transaction-specific approvals, materiality thresholds and omnibus approval mechanics. The definition of material subsidiaries now relies on turnover instead of income. Further, the separate secretarial compliance report has been dispensed with, while retaining mandatory secretarial audit. Overall, the amendments reduce procedural burdens while preserving core governance safeguards.
Here’s a breakdown of the key amendments and their practical implications:
Applicability of HVDLE Regulations (Regulation 15)
One of the most notable changes is the revised definition of HVDLEs under Regulation 15. Previously, an entity qualified as an HVDLE if it had an outstanding value of listed non-convertible debt securities of ₹1,000 crore or more. The threshold has now been increased to ₹5,000 crore, expanding the scope to include larger entities with substantial debt issuance.
Issuance of Certificates and Investor Servicing (Regulation 39)
Regulation 39, which deals with the issuance of certificates, receipts, letters, and handling unclaimed securities, has been redefined as an obligation. HVDLEs are now required to ensure actual credit of securities in dematerialized form to the investor following a service request, with timelines now starting from the receipt of the request along with requisite documents. This replaces the earlier practice of merely issuing confirmations or advisory communications.
Board of Directors (Regulation 62D)
Previously, shareholders’ approval for appointing or re-appointing a director or manager had to be obtained within a specific timeline, without accounting for external approvals; the amendment now clarifies that the time taken to obtain approvals from regulatory, governmental or statutory authorities, wherever applicable, shall be excluded while computing this period.
Further, shareholder approval would not be required in cases where a director is appointed or re-appointed on the board of the HVDLE pursuant to a nomination by a financial sector regulator, or by an order of a Court or Tribunal.
In addition, the amended provision excludes from its applicability the directors nominated by SEBI-registered debenture trustee under the terms of a subscription agreement for debentures issued by the HVDLE.
Related Party Transactions (Regulation 62K)
Now, HVDLEs are required to comply with the provisions of Regulation 23 of LODR with respect to related party transactions except Regulation 23(8) and 23(9).
Pursuant to the omission of some of the clauses, HVDLEs are no longer required to apply a separate materiality threshold for related party transactions involving brand usage or royalty payments, nor are they mandated to seek prior audit committee approval for every related party transaction and subsequent material modification under the earlier prescriptive framework. The detailed approval thresholds and conditions applicable to transactions undertaken by subsidiaries have also been done away with. Further, HVDLEs are no longer required to follow the omnibus approval mechanism earlier prescribed for related party transactions, including laying down specific criteria, fixing transaction-wise limits, undertaking quarterly reviews, or restricting the validity of such approvals to a one-year period. As a result, audit committee oversight of related party transactions now operates under the broader regulatory framework rather than transaction-specific procedural requirements.
New exemptions have also been added:
- Transactions involving payment of statutory dues, fees, or charges to the Central or State Government
- Transactions between a public sector company and the Central/State Government
Corporate Governance for Unlisted Material Subsidiaries (Regulation 62L)
For the purpose of this Regulation, the definition of a “material subsidiary” has been updated. The revised definition uses ‘turnover’ instead of ‘income’ as the benchmark, providing a more operationally relevant measure for determining materiality.
Secretarial Audit and Secretarial Compliance Report (Regulation 62M)
The requirement for HVDLEs to submit a separate secretarial compliance report to stock exchanges has been removed. However, HVDLEs are required to conduct a secretarial audit in accordance with Regulation 24A, maintaining oversight over corporate governance practices.
Independent Director (Regulation 62N)
Earlier, HVDLEs were required to fill any vacancy arising from the resignation or removal of an independent director within a period of three months, unless the board continued to meet the minimum independent director requirements. This provision has now been omitted, thereby removing the explicit timeline for replacing such vacancies under this Regulation.
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