SEBI Proposes Changes to ISIN Limits and Listing Requirements for Debt Securities
Background
The Securities and Exchange Board of India (SEBI) has issued a Consultation Paper on Review of provisions related to ISIN for Debt Securities dated August 10, 2026 (Consultation Paper).
The proposals seek to address two related issues in the corporate debt market:
1. the number of ISINs that an issuer may have maturing in a financial year; and
2. the requirement for an issuer undertaking its first debt listing to also list its previously issued, outstanding unlisted NCDs.
These provisions are particularly relevant for frequent debt issuers, including NBFCs and large corporates.
What is the ISIN framework?
An International Securities Identification Number (ISIN) is the identification number assigned to a particular security. For debt issuances, each issuance is therefore associated with an ISIN.
SEBI’s NCS framework does not permit issuers to create an unlimited number of separate ISINs maturing in the same financial year. The purpose of this restriction is to prevent excessive fragmentation of debt issuances and, consequently, support liquidity in the secondary market. This requirement operates through Regulation 17 of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”), which requires issuers of non-convertible securities to comply with the ISIN conditions specified by SEBI from time to time.
The detailed requirements are currently set out in Chapter VIII of the SEBI Master Circular for Issue and Listing of Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated October 15, 2025 (“NCS Master Circular”). Chapter VIII specifically deals with ISINs for debt securities issued through private placement.
Proposal I – Expansion of ISIN Limits for Debt Securities
Existing limits on ISINs
For private placements of debt securities issued from April 1, 2023, the current framework permits a maximum of 14 ISINs maturing in a financial year, divided as follows:
• 9 ISINs for plain vanilla debt securities (both secured and unsecured debt securities); and
• 5 ISINs for structured and market-linked debt securities.
There is, however, an existing relaxation for larger issuers. If the aggregate outstanding amount across the 9 plain vanilla ISINs maturing in a financial year reaches ₹15,000 crore, 3 additional ISINs are permitted. This means that the existing framework can effectively permit up to 12 plain vanilla ISINs where the ₹15,000 crore threshold is met.
There are separate historical provisions for debt securities issued up to March 31, 2023 and maturing in later years, under which 17 ISINs are permitted. The Consultation Paper is concerned with the framework applicable to debt securities issued from April 1, 2023.
Why is SEBI reviewing this?
Market participants have represented that the existing limits can cause bunching of debt maturities. For issuers such as NBFCs, this can create difficulties in liquidity management, increase refinancing risk and adversely affect ALM.
The Consultation Paper also notes that certain large corporates, rated AA or higher and having outstanding long-term borrowings of ₹1,000 crore or more, are required under SEBI’s large corporate framework to raise at least 25% of their qualified borrowings through debt securities. The existing ISIN limits may restrict their ability to meet this requirement.
In simple terms, the concern is that limiting the number of debt maturities can force an issuer to concentrate repayments into fewer maturity dates, rather than allowing it to spread its repayment obligations more evenly.
Proposed increase in ISIN limits
SEBI proposes to increase the maximum number of ISINs maturing in a financial year from 14 to 17. Under the proposed framework, the limit for plain vanilla debt securities would increase from 9 to 12 ISINs, while the limit of 5 ISINs for structured and market-linked debt securities would remain unchanged. Accordingly, the overall limit would increase from 14 to 17 ISINs.
The 5-ISIN category would also cover Floating Rate Bonds (FRBs), Zero Coupon Bonds (ZCBs) and Tier II bonds. If an issuer issues only securities falling within this category, the proposed limit would be 12 ISINs, instead of the existing 9.
Additional flexibility for large issuers
SEBI further proposes a tiered mechanism for plain vanilla debt securities. Once the aggregate amount of plain vanilla debt securities maturing in a financial year reaches ₹15,000 crore, an additional ISIN would become available. Thereafter, one additional ISIN would be permitted for every further ₹3,000 crore threshold.
An issuer would be permitted up to 12 ISINs where the aggregate amount maturing is up to ₹15,000 crore. Once the amount exceeds ₹15,000 crore, one additional ISIN would be permitted for every further ₹3,000 crore of debt maturing in that financial year. Accordingly, the limit would increase to 13 ISINs for amounts between ₹15,001 crore and ₹18,000 crore, and to 14 ISINs for amounts between ₹18,001 crore and ₹21,000 crore, with one further ISIN being added for each subsequent ₹3,000 crore.
The rationale is to allow larger issuers to spread redemption dates across the financial year, thereby facilitating better matching between debt repayments and their underlying cash flows, without unnecessarily fragmenting the debt market.
Certain securities proposed to be excluded from the ISIN count
SEBI also proposes that ISINs relating to the Government of India-serviced / Extra Budgetary Resources (EBR) bonds and ESG debt securities should not be counted towards the applicable ISIN limits.
The proposed exclusion of GoI/EBR bonds is intended to address the situation where PSUs issue EBR bonds on behalf of the Government while also requiring ISIN capacity for their own funding.
The exclusion of ESG debt securities is intended to encourage the issuance of debt securities with environmental, social and sustainability-related objectives.
The proposal is also consistent with the existing NCS framework, which separately recognises ESG debt securities and provides an operational framework for their issuance and listing.
Proposal II – Relaxation of the Requirement to List Existing Unlisted NCDs upon First Debt Listing
Existing position
The second proposal concerns the treatment of existing unlisted NCDs when an issuer undertakes its first debt listing. Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) currently requires a listed entity whose NCDs are listed to list its NCDs proposed to be issued on or after January 1, 2024.
More importantly, where an entity proposes to list its NCDs on or after January 1, 2024, it is currently required to also list all outstanding unlisted NCDs issued on or after January 1, 2024, within three months of such listing. In effect, an issuer entering the listed debt market may have to undertake a retrospective listing of its existing unlisted NCDs.
To understand the proposed change, it is useful to first consider the policy rationale behind Regulation 62A.
SEBI introduced Regulation 62A in September 2023 against the backdrop of parallel listed and unlisted NCD issuances by the same issuer. At the time, SEBI found that 31% of issuers with outstanding listed NCDs also had unlisted NCDs. This raised concerns around information asymmetry, differences in covenants and pricing, limited liquidity and the possibility of investors confusing an unlisted NCD with a listed security. SEBI was also concerned that investors in unlisted NCDs did not have the same level of disclosure, price discovery, exchange-based liquidity and investor protection mechanisms available for listed debt.
Against this background, Regulation 62A was introduced to ensure that once an issuer enters the listed debt market, its subsequent NCD issuances are brought within the listed and transparent framework, thereby reducing fragmentation and the potential for mis-selling in the corporate bond market.
Why is this being revised?
Consider a company that has historically raised debt through private placements of unlisted NCDs but has never listed its debt securities. If that company now decides to undertake its first listed NCD issuance, the existing Regulation 62A framework can require it to go back and list its outstanding unlisted NCDs issued from January 1, 2024.
This can mean additional listing costs and operational work for debt that has already been issued and subscribed. SEBI notes that this may involve, among other things, challenges relating to ISIN limits and covenant monitoring systems.
SEBI also observes that the proportion of listed debt issuance declined from 80.81% as of September 30, 2023 to 76.55% as of June 30, 2026, and suggests that the requirement to list past issuances may have contributed to the decline.
Proposed approach – grandfather existing debt
SEBI now proposes to remove this retrospective listing requirement for issuers undertaking their first debt listing. Under the proposed framework:
• debt securities issued before the issuer’s first debt listing would generally be grandfathered and would not have to be subsequently listed merely because the issuer has undertaken its first debt listing; and
• new debt issuances after the first debt listing would continue to be subject to mandatory listing.
The key change is therefore from a retrospective to a prospective listing requirement.
What does this mean for debt issuers?
The proposals, if implemented, would provide greater flexibility to issuers in two important areas.
1. Debt maturity planning: issuers, particularly NBFCs and large corporates, would have greater flexibility to distribute debt maturities across a financial year instead of concentrating repayments into a limited number of ISINs. This may assist liquidity management and refinancing planning.
2. First-time debt listing: an issuer that has historically issued unlisted NCDs would be able to pursue a first listed debt issuance without necessarily having to undertake the costly and operationally burdensome exercise of retrospectively listing its existing debt.
The proposals therefore seek to balance market standardisation and reduction of fragmentation with the practical funding and ALM requirements of issuers.
