Bourses include companies up to Rs 1,000 crore m-cap under ESM

Mumbai: Stock exchanges will expand the enhanced surveillance measure (ESM) framework from August 13 to include mainboard companies with a market capitalisation of up to '1,000 crore. Previously, the ESM framework applied only to companies with a market capitalisation of less than '500 crore.

To address volatility in smallcap stocks, ESM mechanism was introduced in June last year.

On Friday, BSE and NSE announced, following a joint surveillance meeting with Sebi, the ESM mechanism will be extended to companies with market capitalization below '1,000 crore. Parameters for shortlisting securities under the ESM framework include high-low price variation and close-to-close price variation.


Stocks in Stage 1 of the ESM framework are traded using a trade-for-trade mechanism with a price band of 5% or 2%. For securities in Stage II, trading will be conducted with a trade-for-trade mechanism and a price band of 2%.