After a periodic review, leading exchanges BSE and NSE have decided to relax the surveillance actions taken against as many as 64 firms from July 10.
Graded Surveillance Measures (GSM) framework has been put in place by the exchanges to check any abnormal rise in stock price not commensurate with the company's financial health. The framework has six stages with surveillance action defined for each stage.
While NSE will move nine firms to the lower stages of the framework, rival BSE will move all 64 firms.
As per the two exchanges, the firms will be shifted to the lower stages of the GSM framework from July 10.
Among the firms to be moved by BSE and NSE from Stage II to Stage I are Gemini Communication, Gujarat Lease Financing, Hind Syntex, Hotel Rugby, Integra Garments and Textiles, Noesis Industries and REI Sixten Retail.
Both the exchanges will also shift Blue Chip India from Stage III to Stage II of the GSM framework.
According to the exchanges, Additional Surveillance Deposit (ASD) collected on firms under Stage II and above of GSM framework will be retained for a period of 5 months.
In the Stage I of GSM, the scrip is transferred to the trade for trade segment with an applicable price band of 5 per cent or lower while in Stage II, in addition to the requirements of Stage I, ASD of 100 per cent of trade value to be collected from buyer also comes into play.
In Stage III, trading is permitted once a week on every Monday and ASD of 100 per cent of trade value needed to be deposited by the buyer.
Under the GSM framework, a periodic quarterly review of firms under various GSM stages is carried out based on pre- defined criteria and if qualified, the applicable companies are moved back from higher stage to lower stage in a sequential manner.
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