SEBI issues directive to publish detailed COVID-19 impact

A directive requiring listed companies to disclose details of the hit taken by their businesses due to COVID-19, was issued by stock market regulator, Securities and Exchange board of India (SEBI).

In its directive, SEBI claimed that many firms obligated under Listing Obligations and Disclosure Requirements (LODR) had only partially disclosed material impacts of the lockdown situation due to coronavirus. It has accordingly issued this direction to ensure that all the investors can receive adequate and updated information to help them assess their standing.

The listed companies have, thereafter, started evaluating and presenting respective disclosures, both qualitatively and quantitatively, in compliance with the new directive.

Various parameters to be given importance in such evaluations comprise impacts on profits, liquidity and debt service, capital adequacy and resources, supply chain, demand and supply situation, internal financial controls, existing contracts etc.

A negative hit on annual revenues of nearly 40 per cent is visible in these companies, based on examination of the disclosures. Moreover, the net impact on sales demand is expected to remain low despite the production capacities commencing work at more than 50 per cent utilization rates.