To give issuers greater flexibility and ease refinancing pressure, the Securities and Exchange Board of India (Sebi) has proposed raising the limit on debt securities maturing within a single financial year.
In a consultation paper released on Monday, the market regulator proposed increasing the maximum number of International Securities Identification Numbers (ISINs) that can mature annually from 14 to 17 for privately placed debt securities. The proposals are open for public comments until 31 August. An ISIN is a unique 12-digit code used to identify a specific security issue globally.
The move is intended to help companies, especially non-banking financial companies (NBFCs), better manage their cash flows and prevent debt repayments from bunching up. The proposal comes after market participants told Sebi that current limits hamper liquidity management and exacerbate asset-liability mismatches.
Under the proposed framework, issuers could have up to 12 ISINs for plain vanilla debt securities, compared with nine at present. Another five ISINs would be available for structured debt, market-linked debt, floating-rate bonds, zero-coupon bonds and debt capital instruments.
The market regulator has also recommended additional flexibility for large issuers. Once the total outstanding amount of plain vanilla debt maturing in a financial year touches ₹15,000 crore, one additional ISIN could be permitted for every subsequent ₹3,000 crore. This would allow companies with large repayment obligations to spread their redemptions more evenly through the year.
Easier rules for listing past debt
Separately, Sebi proposed easing rules on the listing of older unlisted debt securities. At present, a company that lists its debt can be required to list outstanding unlisted non-convertible debt securities issued after 1 January 2024. The regulator said this has created significant costs and operational challenges for new issuers.
Under the proposed change, such past debt issues would be allowed to remain unlisted when a company lists its debt for the first time. However, all subsequent debt issues after the first listing would continue to require listing.
The share of listed debt issuance in total debt issuance fell from 80.81% in September 2023 to 76.55% in June 2026, according to the consultation paper. Sebi said the requirement to list past issues may be one reason behind the decline.
The regulator has also proposed excluding government-serviced bonds, such as extra-budgetary resources bonds, from the ISIN count. To promote sustainable finance, Sebi similarly wants to exempt environmental, social, and governance (ESG) debt securities from the limit.
