Legalaxy - Monthly Newsletter - December 2025

SEBI UPDATES

SEBI LODR (5TH AMENDMENT) REGULATIONS, 2025 – NOTIFIED

Securities and Exchange Board of India ("SEBI"), vide its notification dated November 18, 2025, has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") by notifying the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2025 ("LODR 5th Amendment Regulations"). These amendments will come into force from the date of its publication in the official gazette, i.e., November 19, 2025, except the amendments pertaining to the related party transactions ("RPTs"), which shall come into force on the 30th day from November 19, 2025.

Key amendments include the following:

1. Scope of exempted RPTs altered: Key managerial personnels ("KMPs") of any listed entities or its subsidiary, and their relatives, have been included within the exemption of RPTs, for any retail purchases by them from the listed entity or its subsidiary without establishing a business relationship if the terms are uniformly applicable/offered to all employees, directors, KMPs and relatives of directors or KMPs;
2. Certain payments to be done by electronic mode only: Regulation 12 of the LODR Regulations has been amended thereby mandating payment of dividend, interest, redemption or repayment amounts by only electronic mode of payment facility approved by the Reserve Bank of India ("RBI") in the manner set out in Schedule I of the LODR Regulations. The option of discharging these payments by warrants or cheques is no longer available to listed entities;
3. Change in threshold for determining material RPTs: Materiality of RPTs will be determined by thresholds aligned with the newly inserted Schedule XII of the LODR Regulations, which prescribes a turnover-based framework, as set out below:
   An RPT shall be considered material, if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year exceeds the following:
   
   The notification clarifies that the above-mentioned thresholds shall be computed basis the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.
4. Jurisdiction of listed entity's audit committee over RPTs undertaken by subsidiary: Previously, the listed entity's audit committee's prior approval was required for RPTs where the subsidiary (the listed entity is not a party) for every material RTPs i.e., where the value of the transaction in aggerate during the relevant financial year exceeded 10% of the listed entity's consolidated turnover. Pursuant to the amendment:
   
   1. Where a subsidiary has at least 1 year of audited standalone financial statements, any RPT to which the subsidiary of the listed entity is a party but the listed entity is not a party and whose value exceeds INR 1 crore, shall require prior approval of the listed entity's audit committee if the transaction value exceeds the lower of: (I) 10% of subsidiary's annual standalone turnover as per the last audited financial statements of the subsidiary or (II) the listed entity's materiality threshold prescribed under Schedule XII of the LODR Regulations.
   2. Similarly, where a subsidiary does not yet have at least 1 year of audited standalone financials, an RPT to which subsidiary of the listed entity is a party but the listed entity is not a party and whose value exceeds INR 1 Crore shall require prior approval of the listed entity's audit committee if it exceeds the lower of: (I) 10 % of the aggregate of the paid-up share capital and securities premium account of the subsidiary (to be taken as on date but not older than 3 months prior to the date of seeking prior approval of the audit committee); or (II) the listed entity's materiality threshold under Schedule XII of the LODR Regulations.
5. Other amendments include: (i) clarity on tenure of the omnibus approval granted by shareholders for material RPTs which shall be valid till the next date of the annual general meeting held as per the timeline prescribed under the Companies Act, 2013 ("CA 2013") if such approval was granted in an annual general meeting and where approval was granted by shareholders in general meeting other than annual general meeting, the validity shall not exceed 1 year from the date of such approval; (ii) changes in disclosure requirements in annual report by those listed entities whose non-convertible securities are listed on the recognized stock exchanges.

To read the LODR 5th Amendment Regulations click here.

To view the full article please click here.

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