Related party transaction

A related party transaction is a transfer of resources, services or obligations between a listed entity and a party related to it, such as a promoter, a group company or a director. Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 sets the approvals such a transaction needs and the line above which it is material.

Most of the governance provisions do not apply to an SME listed entity, but this one now does. By the amendment of 27 March 2025, regulation 23 applies from 1 April 2025 to an SME listed entity whose paid-up equity capital exceeds INR 10 crore or whose net worth exceeds INR 25 crore on the last day of the previous financial year. Materiality is INR 50 crore or ten per cent of annual turnover, whichever is lower, so for a company with turnover of INR 55 crore the line is INR 5.5 crore. Separately, an SME issue may not raise money to repay a loan from a related party. The figures are stated as at 21 September 2026.