BHEL Faces Rs 10.86 Lakh Fine for Board Composition Non-Compliance

Bharat Heavy Electricals Limited (BHEL), a Government of India undertaking, has been fined by both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for non-compliance with board composition regulations. The fines, totaling Rs 10.86 lakh, were imposed due to the company's failure to maintain the required number of independent directors on its board.

Regulatory Non-Compliance

BHEL received notices dated November 28, 2025, from both BSE and NSE, each imposing a fine of Rs 5,42,800 (inclusive of GST). The penalties were levied for non-compliance with Regulation 17(1) of SEBI (LODR) Regulations, 2015, which pertains to the composition of the Board of Directors.

Reason for Non-Compliance

The company failed to maintain the required 50% independent directors on its board for the quarter ending September 2025. As a result, BHEL's board composition fell short of the regulatory requirements set by the Securities and Exchange Board of India (SEBI).

BHEL's Response

In response to the fines, BHEL has stated its intention to seek a waiver of the penalties imposed by the stock exchanges. The company cited the following reasons for its non-compliance:

As a Government Company, BHEL's directors, including independent directors, are appointed by the Government of India.
BHEL has been regularly communicating with the Government of India regarding the appointment of the requisite number of independent directors.

Steps Towards Compliance

BHEL has assured stakeholders that it is actively working with the Government of India to ensure the appointment of the required number of independent directors. This step aims to bring the company into compliance with SEBI regulations and avoid future penalties.

Financial Impact

The total fine imposed on BHEL is significant, as detailed in the table below:

Exchange	Fine Amount (including GST)
BSE	Rs 5,42,800
NSE	Rs 5,42,800
Total	Rs 10,85,600

Implications for Investors

While BHEL is seeking a waiver of the fines, this incident highlights the importance of corporate governance and regulatory compliance for listed companies. Investors should monitor the situation closely, as the resolution of this issue may impact BHEL's governance structure and potentially its stock performance.

BHEL's management has emphasized its commitment to resolving the non-compliance issue promptly. The company's ability to secure the necessary appointments and maintain regulatory compliance will be crucial for its reputation and relationship with regulatory bodies going forward.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.25%	-3.30%	-4.65%	+11.55%	+13.83%	+747.16%

Bharat Heavy Electricals Limited (BHEL), a Maharatna public sector undertaking, has successfully secured shareholder approval for a significant amendment to its Articles of Association. The company announced on December 18, 2025, that members approved the special resolution through postal ballot, officially removing previous investment limitations for establishing joint ventures and subsidiaries.

Amendment Details and Impact

The approved amendment modifies Article 69(22) of BHEL's Articles of Association, replacing restrictive investment clauses with enhanced operational flexibility. This change aligns BHEL's powers with its Maharatna status, granted in 2013, providing greater strategic autonomy in business expansion.

Aspect:	Old Article	New Article
Investment Scope:	Financial joint ventures and wholly-owned subsidiaries only	All joint ventures and subsidiaries
Single Project Limit:	15% of networth (max ₹1,000 crores)	No specific limit
Total Investment Cap:	30% of networth across all projects	Not specified
Divestment Powers:	Not mentioned	Explicit power to divest shareholding
Geographic Scope:	India and abroad	India and abroad
Compliance Framework:	Not specified	Subject to government guidelines

Postal Ballot Process Completion

The amendment was approved through a comprehensive postal ballot process that concluded on December 18, 2025. Dr. Yogesh R Chhabra, Company Secretary, communicated the results to stock exchanges including BSE Limited and National Stock Exchange of India Limited, fulfilling regulatory requirements under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Strategic Implications

The approved amendment removes significant operational constraints that previously limited BHEL's investment capabilities. Under the old framework, the company faced strict percentage-based limits on networth investments and was restricted to specific types of subsidiaries. The new clause provides comprehensive flexibility for establishing joint ventures and subsidiaries while maintaining compliance with government guidelines.

Regulatory Compliance and Accessibility

In accordance with Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the amended Articles of Association are now accessible on BHEL's official website at www.bhel.com . This ensures transparency and provides stakeholders with immediate access to the updated corporate governance framework.

The successful approval of this amendment positions BHEL for enhanced strategic partnerships and business expansion opportunities, both domestically and internationally, while maintaining appropriate regulatory oversight through government guidelines.