SEBI proposes raising annual ISIN limit for private debt securities to 17

Markets regulator SEBI on Monday proposed increasing the maximum number of ISINs, the unique identification numbers for securities, that can mature in a financial year for privately placed debt securities to 17 from the existing 14, in a move aimed at easing liquidity and refinancing pressures for NBFCs and large corporates.

Under the proposal, the maximum number of ISINs maturing in a financial year would comprise up to 12 ISINs for plain-vanilla debt securities, against nine currently, and up to five ISINs for structured debt securities, market-linked debt securities, Floating Rate Bonds (FRBs), Zero Coupon Bonds (ZCBs) and Debt Capital instruments (Tier-II bonds), the Securities and Exchange Board of India said in its consultation paper.

The existing framework allows a maximum of 14 ISINs maturing in a financial year - nine for plain-vanilla debt and five for structured and market-linked debt securities. In addition, six ISINs are available for capital-gains tax debt securities issued by authorised issuers under Section 54EC of the Income Tax Act.

An ISIN, or International Securities Identification Number, is a unique 12-character code used to identify securities such as shares, bonds, warrants and commercial papers.

The proposal follows representations from market participants and other stakeholders seeking a review of the existing ISIN limits.

They have pointed out that the current limits may affect the funding requirements of Non-Banking Financial Companies (NBFCs), as bunching of liabilities could make liquidity management more difficult and increase refinancing risks, impacting asset-liability management.

The issue is also relevant for large corporates. Under SEBI’S framework for fund raising by large corporates, entities rated AA or higher and having outstanding long-term borrowings of `1,000 crore or more are required to raise at least 25 per cent of their qualified borrowings through debt securities.

SEBI said the existing restriction on the number of ISINs may impede such entities in meeting the regulatory requirement.

To provide flexibility to large issuers, SEBI proposed that once the total outstanding amount across the 12 ISINs maturing in a financial year reaches `15,000 crore, one additional ISIN may be permitted. Thereafter, one additional ISIN may be permitted for every further `3,000 crore of outstanding amount maturing in that financial year.

SEBI has also proposed excluding ISINs pertaining to Government of India-serviced/Extra Budgetary Resources (EBR) bonds from the prescribed ISIN limits.

It has further proposed that ISINs pertaining to ESG debt securities may not be counted towards the maximum number permitted to mature in a financial year, with the objective of encouraging ESG debt issuance.

Also, SEBI suggested removing the requirement for an issuer proposing to list its non-convertible debt securities to mandatorily list all outstanding unlisted NCDs issued on or after January 1, 2024. 

The move is aimed at encouraging debt listing by allowing issuers to decide whether to list their earlier outstanding debt issues, which may involve high costs and operational challenges.

However, the requirement to list all subsequent debt securities issuances after the first listing would continue to apply.

SEBI noted that the share of listed debt in total debt issuance declined to 76.55 per cent as of June 30, 2026, from 80.81 per cent as of September 30, 2023, when the mandatory listing requirement was introduced.

It said the mandatory requirement to list past issues may be one possible reason for the decline.

SEBI has sought public comments on the proposals by August 31.