5% Lower Circuit: Smallcap company shares fall after it gets added to ASM, BE segment

Synopsis: This small-cap realty stock was in the news today after the company had been placed in the Additional Surveillance Measure (ASM) framework and moved to the BE (trade-to-trade) segment; the company has clarified that it is not a direct guarantor and, in the worst-case scenario, would have to pay Rs 370 crore liability with Rs 10,000 crore net worth. 

The shares of this company, which has a presence in residential real estate development from affordable to premium & uber-luxury space and mainly focuses on the construction and development of residential, commercial and SEZ projects across the Indian metro cities, had its shares fall after being included in the ASM and trade-to-trade categories. 

With the market cap of Rs 8,795 crore, the shares of Embassy Developments Ltd had hit their intraday low at Rs 61.34, falling 5 per cent compared to their previous day’s closing price of Rs 64.56. The shares have fallen by 52% over the last year. 

What’s the news? 

Embassy Developments Limited informed the stock exchanges that its shares were mistakenly placed under the Additional Surveillance Measure (ASM) framework and moved to the BE (trade-to-trade) segment from December 16, 2025. This step was taken after the admission of an insolvency petition filed by Canara Bank before the NCLT, which led to a technical reclassification by the exchanges.

The company clarified that this did not reflect its current legal position. On the same day, the NCLAT granted a stay on the NCLT order, thereby stopping all proceedings under the Insolvency and Bankruptcy Code (IBC). Embassy Developments promptly disclosed this update and submitted the NCLAT order to the exchanges, confirming that it is not under CIRP or IBC proceedings.

Following this, the company has formally approached BSE and NSE seeking removal of its shares from the ASM framework and the BE segment, stating that the inclusion was inadvertent. Embassy Developments also reassured stakeholders that it remains financially sound and fully operational and that normal business activities continue without disruption.

The company’s clarification to CNBC. 

Embassy Developments sought to reassure investors by clarifying its position on the Sinnar Thermal issue, stating that it has no direct relationship with the company and is not the main guarantor. It explained that Indiabulls was only the second guarantor in the loan arrangement, while the first guarantor has not been admitted into NCLT. The company also pointed out that promoter RattanIndia has already met its equity commitment, helping limit the overall exposure. Importantly, the liability under dispute stands at Rs 370 crore, which remains modest compared with the company’s net worth of around Rs 10,000 crore.

On the regulatory side, management said it has been in regular touch with both NSE and BSE and expects more clarity by January 22, when the next hearing is scheduled. The company expressed confidence that it will resolve the issue, adding that even in a worst-case scenario it is financially capable of settling the Rs 370 crore liability. The clarification was aimed at underlining that the matter is manageable and does not pose a serious risk to the company’s financial health or operations.

Financials and more. 

The revenue from operations is at Rs 493 crore in Q2 FY26 versus Rs 475 crore in Q2 FY25, which is a growth of about 4 per cent. However, the net loss has increased from Rs 34 crore in Q2 FY25 to Rs 153 crore in Q2 FY26. 

Embassy Developments Limited, incorporated in 2006, operates across residential, commercial, and SEZ real estate segments in major Indian cities. Formerly known as Equinox India Developments and earlier as Indiabulls Real Estate, the company strengthened its platform after the amalgamation of NAM Estates Private Limited, an Embassy Group entity. This merger became effective on January 24, 2025, following approval from the NCLAT, further integrating the company into the broader Embassy Group ecosystem.

The company has built a growing presence in cities such as Bengaluru, Mumbai, Delhi NCR, Jodhpur, Vadodara, Visakhapatnam, and Indore. Its portfolio spans mid-income, premium, and luxury housing, with a focus on creating well-planned communities rather than just standalone developments. Supported by experienced leadership, Embassy Developments continues to emphasise purposeful design, execution quality, and long-term value creation.

Written by Leon Mendonca. 

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