What is GSM?
GSM means Graded Surveillance Measure. This is a measure taken by the Securities and Exchange Board of India or SEBI, to ensure that an investor is kept safe from dealing in a potential fraud stock or risky stock. On the list of GSM stocks, you can find stocks that might be overpriced, volatile, or whose volumes vary highly. Their fundamentals and their performance might not be in sync with each other and it can mean that they are fraud companies and investors should be careful when investing in them. There are a lot of reasons that can put any stock on the GSM category stocks list. There are 6 stages of GSM that a stock can go through depending on what level of surveillance is needed in each case to bring them back to normal. Each stage is stricter than the others. However, a company can improve its performance and bring back its numbers to normal and then make it out of these lists.
GSM Stock List in the National Stock Exchange
If you are a regular investor, then you are in touch with the market constantly and might know everything that there is to know, but for others, it is important to know about stocks that they should stay away from. GSM feature introduced in 2017 is very effective in keeping people safe from potentially risky stocks. Let us begin the GSM category stocks list.
Alps Industries Limited is in Stage L of the GSM list on NSE. Amit Spinning Industries Limited is in Stage VI of the GSM list on NSE. ATN International Limited is in Stage VI of the GSM list on NSE. Autoriders Finance Limited is in Stage VI of the GSM list on NSE. Bkm Industries Limited is in Stage LXII of the GSM list on NSE. Blue Chip India Limited is in Stage IV of the GSM list on NSE. Blue Coast Hotels Limited is in Stage II of the GSM list on NSE. C & C Constructions Limited is in Stage LXIII of the GSM list on NSE. DCM Financial Services Limited is in Stage I of the GSM list on NSE. Diamond Power Infra Ltd is in Stage III of the GSM list on NSE. DRC Systems India Limited is in Stage II of the GSM list on NSE. Easun Reyrolle Limited is in Stage LXII of the GSM list on NSE. Educomp Solutions Limited Hypo is in Stage LVIII of the GSM list on NSE. Equippp Social Impact Technologies Limited is in Stage LVIII of the GSM list on NSE. INTEGRA ESSENTIA LIMITED is in Stage 0 of the GSM list on NSE. Eurotex Industries and Exports Limited is in Stage I of the GSM list on NSE. Gyscoal Alloys Limited is in Stage 0 of the GSM Stock list on NSE. Gangotri Textiles Limited is in Stage 0 of the GSM list on NSE. Gayatri Highways Limited is in Stage II of the GSM list on NSE. Grand Foundry Limited is in Stage II of the GSM list on NSE. GI Engineering Solutions Limited is in Stage IV of the GSM list on NSE. Gujarat Lease Financing Limited is in Stage II of the GSM list on NSE. Golden Tobacco Limited is in Stage 0 of the GSM list on NSE. Hotel Rugby Limited is in Stage III of the GSM list on NSE. IL&FS Transportation Networks Limited is in Stage 0 of the GSM list on NSE. Infomedia Press Limited is in Stage II of the GSM list on NSE. Inspirisys Solutions Limited is in Stage 0 of the GSM list on NSE. JIK Industries Limited is in Stage II of the GSM list on NSE. DSJ KEEP LEARNING LTD is in Stage II of the GSM list on NSE. Keerti Knowledge and Skills Limited is in Stage IV of the GSM list on NSE. Kridhan Infra Limited is in Stage 0 of the GSM list on NSE. KSK Energy Ventures Limited is in Stage 0 of the GSM list on NSE. Laxmi Precision Screws Limited is in Stage LXII of the GSM list on NSE. Lypsa Gems & Jewellery Limited is in Stage 0 of the GSM list on NSE. Melstar Information Technologies Limited is in Stage LVIII of the GSM list on NSE. Metalyst Forgings Limited India is in Stage LXII of the GSM list on NSE. Metkore Alloys & Industries Limited is in Stage 0 of the GSM list on NSE. Mittal LifeStyle Limited is in Stage L of the GSM list on NSE. National Steel And Agro Industries Limited is in Stage LVIII of the GSM list on NSE. Next Mediaworks Limited is in Stage 0 of the GSM list on NSE. NK Industries Limited is in Stage 0 of the GSM list on NSE. Ortel Communications Limited is in Stage 0 of the GSM list on NSE. Parenteral Drugs (India) Limited is in Stage II of the GSM list on NSE. Peninsula Land Limited is in Stage 0 of the GSM list on NSE. Premier Limited is in Stage LXII of the GSM list on NSE. Quintegra Solutions Limited is in Stage 0 of the GSM list on NSE. Radaan Mediaworks India Limited is in Stage I of the GSM list on NSE. Rajvir Industries Limited is in Stage 0 of the GSM list on NSE. Radha Madhav Corporation Limited is in Stage II of the GSM list on NSE. Resurgere Mines & Minerals Limited is in Stage IV of the GSM list on NSE. S&S Power Switchgears Limited is in Stage I of the GSM list on NSE. Sab Events & Governance Now Media Limited is in Stage L of the GSM list on NSE. Sri Adhikari Brothers Television Network Limited is in Stage LVIII of the GSM list on NSE. Sathavahana Ispat Limited is in Stage II of the GSM list on NSE. Shyam Telecom Limited is in Stage 0 of the GSM list on NSE. SKIL Infrastructure Limited is in Stage 0 of the GSM list on NSE. Soma Textiles & Industries Limited is in Stage L of the GSM list on NSE. Spentex Industries Limited is in Stage LVIII of the GSM Stock list on NSE. Shekhawati Poly-Yarn Limited is in Stage III of the GSM list on NSE. Stampede Capital Limited is in Stage III of the GSM list on NSE. TCI Finance Limited is in Stage 0 of the GSM list on NSE. Tijaria Polypipes Limited is in Stage 0 of the GSM list on NSE. Tamilnadu Telecommunication Limited is in Stage 0 of the GSM list on NSE. TV Vision Limited is in Stage II of the GSM list on NSE. Usha Martin Education & Solutions Limited is in Stage 0 of the GSM list on NSE. Viceroy Hotels Limited is in Stage LVIII of the GSM list on NSE. Viji Finance Limited is in Stage 0 of the GSM list on NSE. Visu International Limited is in Stage VI of the GSM list on NSE. Williamson Magor & Company Limited is in Stage III of the GSM list on NSE. W S Industries (I) Limited is in Stage IV of the GSM list on NSE.
Also Read: 14 Fastest Growing Stocks in India
BSE GSM
Above we have named the BSE GSM and NSE GSM lists. With 70 names on the list, you can see just how many potentially risky companies are out there that you need to be aware of. Each company belonged to different stages with stage 1 being the most common category. Some of them are even temporarily suspended, and the holders can’t get rid of them and new buyers can’t buy them. It is suggested and important that people check these lists before investing in stocks to make sure they and their investments are safe.
Why was the GSM Stock List Created?
GSM list and GSM list, both of them are made of companies whose stock shows few worrying signs. In the case of the GSM category stocks list, you will find shares that have cheated the investor in the following ways.
A company whose stock price rise and fundamentals are not connected to each other. Default in earnings or something along the same lines. Faults in book value. The flaw in fixed assets. Issues with Net worth. P/E ratio-related concerns.
Six Stages of the GSM Framework
There are six stages in the GSM list and to be placed in the first one means that a share will be placed in the trade-to-trade category and these shares from now on can only move up to 5%. As soon as stage 2 comes into the picture, ASD or Additional Surveillance Deposit also comes into the picture. So now it is a 5% band and a 100% ASD charge. Stage 3 sees the share being only traded on Monday of each week in addition to the 100% ASD charge. When heading to stage 4, ASD sees a 100% rise and becomes 200%. In stage 5 again there is a 200% ASD charge and now the share is only tradable on the first Monday of each month. And in the last stage, which is stage 6, the stock faces even harsher treatment. Stocks in this list can only be traded on the first Monday of a month and don’t see an upward price movement.
Which Companies get Placed on the GSM List?
Yes, above it is mentioned that faulting or defaulting in fixed assets, P/E ratio, net worth, price valuation, etc. get you on the GSM list, but there are multiple criteria that are to be kept in mind when dealing with stock on the GSM list. They can be present there because of the following reasons.
Criteria I
Securities with net worth of 10 crores or less than that or the presently available net fixed asset is less than or equal to 25 crores or if the stock PE is more than double when compared to the Index PE or in negative then the share goes to the GSM list.
Criteria II
The stocks under these criteria become eligible to get placed on the stage I GSM list and to be there, they need to do the following. Securities with a market capitalization of 25 crores or less or if their PE is more than 2 times the value of sector Index PE. In the case of negative PE, a stock is eligible when its PB is double of Index PB or if the PB is negative.
How to Get Out of the GSM List?
Yes, it is possible to get off the GSM list. It is not easy, but it is possible and here is what the investors need to know about getting off the list.
The stocks on this list are identified and reviewed at an interval of every four months. In these reviews, they have to do the bare minimum of not meeting the conditions mentioned in the criteria shared above and if they can do that then they get to be off the list. If a company feels they have been wronged or if they think they are innocent then it can appeal to Securities Appellate Tribunal or courts higher than them against SEBI and if they are indeed correct then they get some sort of relief or exit.
However, for this review to be considered, the results that are taken into consideration are supposed to be from the latest standalone reports that the company has filed.
Which Securities can’t be on the GSM List?
Immunity applies to a lot of things and stocks to have these exceptional cases. Not all stocks face the risk of turning up on a GSM list and that is because of certain conditions or special terms that they meet and those are.
If a security’s price is yet to be disclosed then SEBI has certain provisions in place to protect them from featuring on the GSM list. It is common sense but, if a security is already under suspension then it can’t be put on the GSM list, obviously. A security whose derivative product is available is also free from showing up on the GSM category stocks list. Any security that is part of any index on NSE or BSE is also immune to being on the GSM category stocks list. If it is a Public Sector Enterprise or a subsidiary of one, then they too are safe and don’t get placed on this list. If a company has had its IPO and listing in the last 1-year then they too are safe. Those securities that have paid dividends to the investors continuously for the past 3 years also get a free pass. If a company has more than 10% of its shares held by an institution and in the past 5 years if no promoter has sold their shares and if the current price of the stock is in the range of its all-time high and all-time low of past three years then that company can also be worry free regarding GSM category stocks list eligibility. If a security was listed in the last year via a Scheme of Arrangement that revolves around a merger or demerger. In the case of demerger if the parent company goes on the GSM list then so does the other and vice versa, but it should be considered during the review of the next quarter. During the merger, if the security is on the GSM category stocks list then the new entity coming into existence shall also be subject to it.
GSM and ASM
Graded Surveillance Measure and Additional Surveillance Measure are more or less the same things. They have one common interest, which is, protecting the investors. However, the difference between them is that stocks on the GSM list are not allowed intraday trading, and the stock on the ASM looks to arrest the volatility that any security is going through. GSM has 6 stages and ASM has 2 stages for short-term and 4 stages for long-term lists. It is possible to get off all three lists and the conditions to be on each list and to get off them are all different. The common factor is that the security must be stable and not misguide the investor. Also Read: Indian Stock Market Holidays List
Identifying Stocks that are on ASM and GSM Lists
Earlier, the market operated differently. There were share certificates and people that you had to deal with in order to buy and sell a share, and it still leads to scams and issues. Today, you have a Demat account and a broker company that looks after your buying and selling. It makes identifying problematic stocks easier. Firstly, if you are holding a share that falls into any list then you get intimation by the broker company where they inform you that a stock in your holdings has made it onto a list. Also, if you were to buy or sell a share that is on the ASM list then you would again get a warning message informing about the same and confirming your action. Investors are usually informed a day prior when the companies enter these lists, however, on your side, you can make sure to research beforehand and then make a decision. So this was all about the GSM stock list. It is our duty to caution you from falling into a tricky situation. GSM category stocks are indeed something that should not be taken lightly. As an investor, you should always try and stay away from the stocks on this list or at least be extra careful if and when you deal with them.
