hudco has received penalty notices from both BSE and NSE for failing to comply with board composition requirements during the quarter ended December 31, 2025. The stock exchanges imposed fines totaling ₹5.43 lakh under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Fine Details and Regulatory Action

Both exchanges levied identical penalties under Regulation 17(1) for non-compliance with board composition requirements, including failure to appoint requisite directors. The fine structure shows a daily penalty mechanism that accumulated over the non-compliance period.

The exchanges have given the company 15 days from February 27, 2026, to remit the fine amount, warning that failure to pay could result in freezing of promoter shareholding and potential transfer to the Z group category.

Company's Response and Board Comments

HUDCO's board, while noting the penalty status, has decided to pursue multiple courses of action. The company has formally communicated its position to both exchanges, emphasizing the unique constraints faced by government-controlled entities in director appointments.

Key board decisions include:

• Continuous follow-up with the concerned Ministry regarding exchange penalties
• Formal request to stock exchanges for fine waiver
• Highlighting that director appointment powers vest with the President of India through the Administrative Ministry

Government Control and Compliance Challenges

The company has emphasized that as a Government of India enterprise, the power to appoint directors rests with the President of India, exercised through the Administrative Ministry. HUDCO stated that requests for appointment of requisite Independent Directors have been made to the concerned Ministry, but the appointment process remains beyond the company's direct control.

This situation highlights the regulatory challenges faced by government-controlled public sector enterprises in maintaining compliance with listing requirements while operating within the framework of government appointment procedures.

Regulatory Framework and Consequences

The penalties were imposed under SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024, which prescribes penal actions for non-compliance with LODR provisions. The exchanges have warned that continued non-compliance could result in more severe actions, including suspension of trading in the company's equity shares.

Both BSE and NSE have provided detailed procedures for fine payment and waiver applications, with NSE requiring a non-refundable processing fee of ₹10,000 plus 18% GST for waiver applications where the fine amount exceeds ₹5,000.

HUDCO has fulfilled its regulatory obligations by submitting a compliance certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended March 31, 2026. The submission was made on April 8, 2026, to stock exchanges and depositories as part of mandatory quarterly compliance requirements.

Regulatory Compliance Details

The certificate was issued by Beetal Financial and Computer Services Private Limited, which serves as HUDCO's SEBI-approved registrar and share transfer agent. The compliance covers the period from January 1, 2026 to March 31, 2026, confirming proper handling of securities dematerialization processes.

Certificate Confirmation

Beetal Financial and Computer Services confirmed that all securities received from Depository Participants for dematerialization during the quarter were properly processed. The registrar verified that:

• Securities received for dematerialization were confirmed to depositories within stipulated timelines
• All securities comprised in certificates have been listed on stock exchanges where earlier issued securities are listed
• Security certificates received for dematerialization were mutilated and cancelled after due verification
• Names of depositories were substituted in the register of members as registered owners within 15 days

Stakeholder Communication

The compliance certificate was simultaneously submitted to multiple regulatory bodies and stock exchanges. HUDCO's Company Secretary and Compliance Officer, Vikas Goyal, digitally signed the submission, ensuring proper authentication of the regulatory filing.

About the Regulation

Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018 mandates quarterly compliance certificates from listed companies regarding their dematerialization processes. This ensures transparency and proper handling of securities in electronic form, protecting investor interests and maintaining market integrity.