SEBI Informal Guidance on Applicability of Regulation 62A of LODR Regulations to Transfer of Unlisted Non-Convertible Debentures Pursuant to Business Transfer Agreement

Background

The Securities and Exchange Board of India ("SEBI"), vide its Informal Guidance dated July 20, 2026 (Issue No. I/16721/2026), addressed an application filed by Ananya Finance for Inclusive Growth Private Limited ("Ananya") under the SEBI (Informal Guidance) Scheme, 2025, seeking an interpretive letter on the applicability of Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") in a specific fact pattern involving intra-group transfer of unlisted debt securities.

Facts of the Case

Prayas Financial Services Private Limited ("Prayas"), a wholly owned subsidiary of Ananya, entered into a Business Transfer Agreement dated February 28, 2026 ("BTA"), pursuant to which its assets and liabilities — including unlisted, unsecured Non-Convertible Debentures ("NCDs") — were transferred to Ananya. Ananya is a listed entity with its debt securities listed on recognised stock exchanges.

The relevant facts placed before SEBI were as follows:

1. The unlisted NCDs of Prayas were originally issued on July 4, 2024, with allotment on July 12, 2024, and maturity on July 12, 2027.
2. Pursuant to the BTA, Ananya assumed the obligations under these NCDs, effectively consolidating the debt instruments within the listed entity.
3. The transferred NCDs continued as the same outstanding securities; no new debt securities were issued by Ananya in substitution.
4. No new debenture certificates, amended certificates, replacement debentures, or new ISINs were issued. The existing ISINs continued to remain with Prayas, unchanged.

Queries Raised

Ananya sought SEBI's guidance on two questions:

Query 1: Whether the transfer of unlisted non-convertible debt securities of a subsidiary, pursuant to a business transfer, mandatorily requires listing on a recognised stock exchange under Regulation 62A of the LODR Regulations, or whether such a transaction could instead be treated as a "transfer" rather than a "new issuance," thereby not necessitating a fresh listing application.

Query 2: In the event listing is found to be compulsory, whether SEBI could provide detailed guidance on the process and procedural requirements for effecting such listing.

SEBI's Guidance

On Query 1:

SEBI clarified that Regulation 62A(1) of the LODR Regulations requires a listed entity whose non-convertible debt securities are listed to list all non-convertible debt securities proposed to be issued on or after January 1, 2024, on the stock exchange(s). The provision is intended to ensure that unlisted non-convertible debt securities of listed debt entities, issued on or after this cut-off date, are brought within the regulatory framework and made subject to applicable disclosure and investor protection norms.

Significantly, SEBI held that the applicability of Regulation 62A cannot be determined solely on the basis of the structure of a transaction. Where a corporate restructuring — including a transfer of business from one entity to another — results in the liability associated with outstanding unlisted non-convertible debt securities effectively becoming an obligation of a listed entity, Regulation 62A is attracted regardless of whether the transaction is characterised as a "transfer" as opposed to a fresh "issuance."

Accordingly, SEBI clarified that where a debt-listed entity assumes and continues the obligations in respect of outstanding unlisted non-convertible debt securities issued on or after January 1, 2024, the requirements of Regulation 62A must be complied with holistically by such entity.

On Query 2:

SEBI stated that operational requirements for ensuring compliance with listing requirements — including consequential matters relating to ISINs, depository records, and listing formalities — are governed by the applicable framework prescribed by the recognised stock exchange(s) and depository(ies). The applicant was accordingly directed to ensure compliance with such operational requirements as may be applicable.

Key Takeaways

1. Substance over form: SEBI has reaffirmed that the classification of a transaction as a "transfer" rather than an "issuance" does not, by itself, exclude the applicability of Regulation 62A. The determinative factor is whether a listed entity has assumed the underlying obligation on outstanding unlisted debt securities issued on or after January 1, 2024.

2. Corporate restructuring implications: Business transfer agreements, slump sales, and similar restructuring arrangements involving the movement of unlisted debt liabilities into a listed entity must be evaluated for Regulation 62A compliance at the stage of structuring, not merely at the stage of fresh issuance.

3. No exemption merely on absence of new instruments: The fact that no new debenture certificates, ISINs, or replacement instruments were issued did not, in SEBI's view, take the transaction outside the scope of Regulation 62A, since the obligation itself had shifted to a listed entity.

4. Limited scope of the guidance: As is standard under the Informal Guidance Scheme, SEBI clarified that this letter reflects the relevant department's position on enforcement action only, is based on the specific representations made in the application, does not bind the Board, and does not affect the applicability of any other SEBI regulation or law administered by any other authority.

Conclusion

This Informal Guidance is a useful reference point for listed entities undertaking group-level restructuring involving unlisted debt securities, particularly through business transfer or similar arrangements. It signals that SEBI will look through the transactional form to the substance of obligation assumption when determining Regulation 62A applicability, and that professionals advising on such restructurings should factor in listing compliance at the transaction-structuring stage itself.