SEBI freezes promoter holdings at ISIN level during share buy-backs
Promoter holdings freeze at ISIN level from the buy-back resolution until offer close; depositories build the mechanism by 1 August
Change
On 21 July 2026, the Securities and Exchange Board of India (SEBI) issued a circular, effective immediately, operationalising Regulation 24(i)(ea) of the SEBI (Buy-back of Securities) Regulations, 2018 (inserted 1 July 2026), under which promoter and promoter-group holdings, including associates, remain frozen at the ISIN level from the date of the board or special resolution until the buy-back offer closes — permitting only tender-route tendering and invocation of pre-existing encumbrances — and directing depositories to put the operational framework and system enhancements in place before 1 August 2026.
Why it matters
The freeze operates at the ISIN level from the resolution date to offer close, so promoter securities cannot move during the buy-back except to tender through the tender offer route or to invoke encumbrances created before the buy-back period, with the freeze continuing on any invoked or released securities. Depositories must build the operational framework and system enhancements — freeze-instruction formats, freeze modalities, and the tender and encumbrance carve-outs — before 1 August 2026. Listed companies, stock exchanges, depositories, merchant bankers and RTAs are each responsible for compliance with the circular and the framework the depositories issue.
Implications
- — Depositories must build and deploy the ISIN-level freeze framework — freeze-instruction formats, freeze modalities, and the tender-route and pre-existing-encumbrance carve-outs — with system enhancements live before 1 August 2026, or listed companies cannot execute a compliant buy-back after that date.
- — Company-secretarial and compliance teams at listed companies must issue promoter-holding freeze instructions in the depositories' prescribed format from the date of the board or special resolution when running a buy-back, since promoter holdings must be frozen through to offer close and only tender-route tendering and pre-existing encumbrance invocation are permitted.
- — Merchant bankers and RTAs managing buy-backs must reconcile the ISIN-level freeze against tendered securities and pre-buy-back encumbrances, because the freeze continues to apply on invoked or released securities and a mis-release breaches the circular.
Who is affected
- — Depositories building the ISIN-level freeze framework
- — Company-secretarial and compliance teams at listed companies undertaking buy-backs
- — Merchant bankers and RTAs managing buy-back offers
What to watch
- — 1 August 2026 — depositories must have the operational framework and system enhancements for the ISIN-level promoter-holding freeze in place; buy-backs initiated after this date depend on that framework being live.