The Securities and Exchange Board of India (Sebi), in a circular issued on 7 October, has revised the framework governing the number of International Securities Identification Numbers (ISINs) that an issuer can have maturing in a financial year.

The move follows representations from market participants who said that existing restrictions were affecting funding flexibility and increasing refinancing risks, particularly for non-banking financial companies (NBFCs). Mint explains the changes and whether they would substantially help NBFCs.

Sebi has increased the maximum number of ISINs that may mature in a financial year for an issuer of debt securities from 14 to 17. An additional six ISINs will continue to be available for capital gains tax bonds issued on a private placement basis by authorized issuers under Section 54EC of the Income Tax Act, 1961.

An ISIN is a unique 12-character code assigned to a security, such as a bond or share, to identify it for trading, settlement and record-keeping.

Of the 17 ISINs, up to 12 can be used for plain-vanilla debt securities, including both secured and unsecured bonds. The earlier framework permitted nine such ISINs, with three additional ISINs allowed once the outstanding amount reached ₹15,000 crore. Under the revised framework, issuers can obtain one additional ISIN for every further ₹3,000 crore of outstanding debt beyond ₹15,000 crore.

A maximum of five ISINs are set aside for structured debt securities, market-linked debt securities, floating-rate bonds (FRBs), zero-coupon bonds (ZCBs) and Tier II bonds. If an issuer issues only instruments in these categories, the overall limit is 12 ISINs per financial year. Existing FRB, ZCB and Tier II bonds issued before the circular will be grandfathered and issuers cannot add fresh issuances in the category for a particular year if the existing count is five or more.

The earlier cap on ISINs could force issuers to concentrate repayments within a limited number of maturity windows, creating a bunching of liabilities. This is especially challenging for NBFCs, which need to match their borrowing schedules with the cash flows generated by their lending portfolios. When substantial repayments fall due around the same time, companies may face liquidity pressures and greater refinancing risk, creating difficulties in asset-liability management.