esm framework: Exchanges remove 39 smallcap stocks from surveillance


Mumbai: The stock exchanges have removed 39 small-cap stocks from the Enhanced Surveillance Measure (ESM) framework, effective January 29, 2024.

According to the stock exchange circular issued on Thursday, stocks such as Rajoo Engineers, Brand Concepts, Modern Insulators, BPL, Mirc Electronics, Shreyans Industries and Aban Offshore, among others, are included in the list of stocks that will no longer be subject to the ESM framework.

The ESM rules were introduced on June 4 last year for highly volatile micro-small-cap companies with a market cap of less than 500 crore.

Three stocks – Bombay Wire Ropes, Digidrive Distributors and Parshwanath Corporation – have been included in ESM.

Other stocks shifted out of the ESM framework include Rudra Global Infra Product, GP Petroleum, Kanoria Energy, Signet Industries, Bemco Hydraulics, Samrat Forgings and Amba Enterprises.

Stocks under Stage I and Stage II of ESM are settled through a trade-for-trade mechanism with a 100% margin. A price band of 5% or 2% in case the stock is already in a 2% price band has been assigned for stocks under ESM Stage-I, while Stage-II are traded under periodic call auctions at a price band of 2%.

In July, the stock exchange revised the rules and allowed stocks under ESM Stage-II to trade on all trading days instead of once a week. Stocks of public sector enterprises and banks and stocks on which derivatives products are availabwill be excluded from the surveillance guidelines.

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