India’s markets regulator is examining trading patterns during the launch of the new Closing Auction Session amid concerns over price manipulation in low-liquidity stocks, while also proposing easing debt maturity regulations to support issuers.
India’s markets regulator is reviewing trading in the first week of the newly launched Closing Auction Session amid concern that thin participation may have helped move closing prices in some shares, according to reporting cited by NDTV Profit and information released by SEBI. The watchdog has collected transaction data from stock exchanges and is examining whether patterns in the auction window distorted end-of-day price discovery, particularly in less liquid stocks.
The scrutiny comes after market participants complained about sharper swings once the mechanism was introduced, raising questions over how reliably it set closing levels in the final minutes of trade. SEBI is looking at whether relatively small orders could exert outsized influence while the new system is still bedding in.
Separately, SEBI has proposed easing debt maturity rules in a move aimed at giving issuers more room to manage repayments and reduce refinancing pressure. In a consultation paper released on Monday, the regulator said it wants to lift the cap on privately placed debt ISINs that can mature in a single financial year from 14 to 17, with comments invited until August 31.
The proposal is designed to help issuers, especially non-banking financial companies, avoid clusters of redemptions that can strain cash flow and worsen asset-liability mismatches. Under the draft rules, issuers could have up to 12 ISINs for plain vanilla debt, versus nine now, while five more would be allowed for instruments including structured debt securities, market-linked debentures, floating-rate bonds, zero-coupon bonds and debt capital instruments.
For larger borrowers, SEBI has also suggested a graduated allowance once outstanding plain vanilla debt maturing in a financial year reaches Rs 15,000 crore. At that point, companies would be able to add one more ISIN for every further Rs 3,000 crore of debt, a change intended to spread redemption obligations more evenly through the year.
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