ASM List Today, Stages, Criteria

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With the increase of investors in the Indian Stock market there is also an increase in malpractices and fraud. To reduce malpractices and safeguard investors Securities and Exchange Board of India (SEBI) have taken many steps. ASM list is one of those. It is a list that contains all the dubious stocks that may not be fit to invest in. ASM List has various stages in which these stocks are divided. In this article, we will inform you about ASM list today, ASM list stage 1, ASM list stage 2, 3 and 4.

ASM List Today, Stages, Criteria

In the stock market, there is always a risk of fraud. To make the market more secure, SEBI has been working really hard since 1992 when the era of organized stock Market in India begins. Among the various measures introduced by SEBI, ASM list is crucial. Before we learn about it and about ASM list stage 1, ASM list stage 2, let us understand what this list means. 

What is ASM list?

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ASM which is an acronym for Additional Surveillance Measure is a criteria which was introduced by SEBI (stock exchange board of India). SEBI is the controlling authority of every stock exchange and related matters therein. In 2018, ASM list was introduced to regulate the volatility of stocks and protect the interest of investors.

As the name suggests, Additional Surveillance Measure is proactive measures taken for surveillance and control over the Indian Stock market. A list is prepared which has such stocks in it which are currently highly volatile. Reasons could be the price variation, volume variation, delivery percentage, etc. SEBI introduced the same to maintain market integrity and in 2021 beginning of 2021 it already had over 120 stocks listed in long term ASM list and 40 + in short term ASM list.

ASM list today is a great initiative that is working effectively to fulfil the goal of SEBI to safeguard the investors in the Indian Stock market. Purpose of ASM list today is the Additional support to already existing GSMs such as Graded Surveillance Measures which are introduced from time to time by SEBI. Examples of such measures are reduction in price band, call auctions, etc.

There is a framework provided to generate an ASM list as per the given ASM framework BSE (Bombay Stock Exchange) and NSE (National Stock exchange) do issue a list having all stock categorized either in long term or short term.

Criteria to define ASM List

Stock chart on a white screen | ASM List Today
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Parameters to evaluate such ASM list as per SEBI guidelines are as follows:

  • Close to close price variation.
  • Client concentration.
  • High low volatility.
  • Market capitalization
  • Volume variation
  • Delivery percentage
  • PE ratio (Price Earning ratio)
  • No specific PANs

All these parameters together or in combination are the basis of the criteria for listing a share under ASM list.

Significance of ASM List

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ASM List is significant because it is made for the investors only so investors should have tracking on their own invested shares and should respond appropriately to market changes. Here are the things which are important to know if your stocks are on the ASM List

  • If a stock is on this ASM list that means it is subject to higher level restriction
  • It will not be allowed to be pledged as collateral for as long as it is in the list
  • Also, advance orders cannot be backed up by such stocks providing you with restricting these stocks in intraday leverages.
  • These stocks will also be subjected to a 5% circuit filter. A circuit filter is where the price of a stock fluctuates only up to the defined percentage.
  • It can also result in a fall in demand for such stock but the price will be stable for a while.

Things which won’t be affected due to a stock being on ASM list:

  • Company’s actions that benefit the investor as ASM list is to promote investors and safeguard them.
  • Dividends will remain continuous as they are.
  • If there was any obligation to issue Bonus that will remain the same.
  • Stock splits will be as usual.

This is not a disciplinary action or a penalty to be on this ASM List. Only the stocks going beyond Normal trade culture are the ones which will be given extra strictness. Basically, it is something like keeping an eye over an extraordinary circumstance which can be good, bad or normal in its own way.

Also Read: GSM Stock List in the National Stock Exchange

Conditions of keeping shares under ASM List

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There are a total of 4 criteria which lays down the path for the share to settle under the ASM list. Before going into such criteria there are certain exceptions marked by SEBI, certain securities which cannot be parked under the ASM List even if such conditions are overlooked.

List of exceptional securities is

  • Public sector enterprise and public sector Banks (PSUs)
  • Securities already under Graded Surveillance Measures (GSMs)
  • Securities under trade to trade.
  • Securities with derivative products available on it.

As these were the securities which will not form a part of ASM list even when such conditions exist. Let us proceed to the criteria of marking securities other than exception ones in the ASM List.

Condition 1

High low volatility for 3 months should be greater than or equals to (150% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE.

Explanation: High low volatility here denotes the price fluctuation which should be because of corporate actions for adjusting price and this computation, combined trading values of BSE and NSE will be done for 30 days. Also, another Condition here is that Market capitalization should be more than Rs. 100 crore on the review date.

Condition 2

In last 60 trading days, Close to Close Price Variation is greater than or equals to (100% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE.

Explanation: Close to Close price variation should be because of corporate actions for adjusting price and this computation, combined trading values of BSE and NSE will be done for 30 days.

Condition 3

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In last 365 days, Close to Close Price Variation is greater than or equals to (100% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, High low volatility is greater than or equals to ( 200% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE.

Explanation: High low volatility (here denotes the price fluctuation) and close to close price volatility both should be because of corporate actions for adjusting price and this computation, combined trading values of BSE and NSE will be done for 30 days. Also, another Condition here is that Market capitalization should be more than Rs. 500 crore on the review date.

Condition 4

Average daily Volume in a month is ≥ 10,000 shares & > 500% of Average volume in preceding 3 months at BSE & NSE. And, Average Delivery percentage is less than 50% in the last 3 months. And, Close–to–close price variation is greater than or equals to (50% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE.

Explanation: Close to Close price volatility should be because of corporate actions for adjusting price and this computation, combined trading values of BSE and NSE will be done for 30 days. Also, another Condition here is that Market capitalization should be more than Rs. 500 crore on the review date.

ASM List Stages

Stock chart on screen | ASM List Today
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As we are now well aware of the criteria to put stocks in the ASM List let’s discuss more about the nature and stages of the list. Although, the criteria to define were quite complex in comparison to that stages are simple to go through.

There are two types of ASM List:

  • Long term ASM List: It contains 4 Stages
  • Short term ASM List: It contains 2 Stages

Long term ASM List

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Let us go over all the stages in the long term ASM list.

  • ASM list Stage 1: Those securities which are shortlisted in entry criteria will belong to this stage.
  • ASM list Stage 2: Stocks which are in ASM list stage 1, in consecutive 5 days satisfies such Condition – Greater than or equals to ( 25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE for the last 30 days.
  • ASM list Stage 3: Stocks which are in ASM list stage 2, in consecutive 5 days satisfies such Condition – Greater than or equals to (25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE for the last 30 days.
  • ASM list Stage 4: Stocks which are in ASM list stage 2, in consecutive 5 days satisfies such Condition – Greater than or equals to (25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25clients account ≥ 30% of combined trading value at BSE and NSE for the last 30 days.
Disciplinary Actions

Here are the disciplinary actions that will be faced by stocks as per the stages.

ASM List Stage Action Exit plan*
1 For stocks in this list applicable margin shall be 80% from T+3 days for all stockholders Not meeting the entry criteria
2 Price band will be reduced to next Lower level and applicable margin here shall be 100% from T+3 days for all stockholders Will move to Stage 1 on not meeting the entry criteria
3 Price band will be further reduced to next Lower level and applicable margin here shall be 100% from T+3 days for all stockholders Will move to Stage 2 on not meeting the entry criteria
4 Will be settled on the gross basis along with 100% margin and 5% price band. Will move to Stage 3 on not meeting the entry criteria

*Securities once mentioned in the long term ASM list will be eligible for exit only after 60 calendar days subject to that they follow conditions above.

Also Read: The Complete ASM List Stocks

Short term ASM List

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Let us now understand the two stages of Short term ASM List.

  • ASM list Stage 1: Either in consecutive 5 trading days satisfies – Greater than or equals to (25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE in 5 trading days. OR in consecutive 15 days satisfies Greater than or equals to (40% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE in 15 trading days.
  • ASM list Stage 2: Either in any consecutive 5 trading days among the 15 days following Stage 1, reaches – Greater than or equals to (25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE in 5 trading days. OR in any consecutive 15 trading days among the 45 days following Stage 1, reaches Greater than or equals to ( 25% of the price + (Beta of the stock (β) * S&P BSE Sensex Variation)) And, concentration of Top 25 clients account ≥ 30% of combined trading value at BSE and NSE in 15 trading days.
Disciplinary Actions

Here are the disciplinary actions that will be faced by stocks as per the stages.

ASM List Stage Action
1
  • Seek confirmation as to whether there is any corporate announcement that has not been disseminated to the market.
  • Applicable Margin rate: 1.5 times of existing (max 100%) or 40% whichever Is higher.
  • Top 10 clients (if their gross Traded value is greater than Rs. 10 lakhs) will be given 100% margin on their Traded value at EOD
2
  • Applicable Margin rate: 2.5 times of existing (max 100%) or 80% whichever Is higher.
  • Top 10 clients (if their gross Traded value is greater than Rs. 10 lakhs) will be given 100% margin on their Traded value at EOD

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