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:

1. As a Government Company, BHEL's directors, including independent directors, are appointed by the Government of India.
2. 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:

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.

Bharat Heavy Electricals Limited (BHEL) has announced a significant development in its High Voltage Direct Current (HVDC) link project, originally contracted with Rajasthan Part I Power Transmission Limited (RPPTL). The project, aimed at transmitting renewable energy between Rajasthan and Uttar Pradesh, has undergone a contractual change through a novation agreement.

Key Details of the Novation

• Date of Agreement: November 14, 2025
• Parties Involved:
  • BHEL and Hitachi Energy India Limited (Consortium)
  • Rajasthan Part I Power Transmission Limited (RPPTL)
  • AESL Projects Limited (APL)

Project Specifics

Implications of the Novation

1. Transfer of Obligations: RPPTL's obligations under the original contracts have been transferred to APL, a wholly-owned subsidiary of Adani Energy Solutions Limited (AESL).

2. Continuity of Terms: The consortium confirms that all other terms and conditions of the project remain unchanged, including:

   • Scope of work
   • Project schedule
   • Commercial terms

3. Legal Transition: APL has legally assumed all past, ongoing, and future rights, liabilities, obligations, and duties pertaining to the project that were originally held by RPPTL.

Corporate Governance

BHEL's disclosure of this development aligns with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has promptly informed the stock exchanges, demonstrating its commitment to transparency and regulatory compliance.

Conclusion

This novation agreement marks a significant shift in the project's execution structure while maintaining the core aspects of the original contract. It reflects the dynamic nature of large-scale infrastructure projects and the importance of adaptability in corporate partnerships. Stakeholders and investors in BHEL should note that while the counterparty has changed, the fundamental parameters of the project remain intact, potentially ensuring continuity in the project's progress and expected outcomes.