What is GSM in the stock market?

The Graded Surveillance Measure is a framework of SEBI and the exchanges for securities whose price is not in line with the company's financial health and fundamentals, such as earnings, book value, fixed assets, net worth, P/E and market capitalisation. A shortlisted security starts at Stage 0 and can move up to Stage IV, each stage adding stricter trading conditions.

How many GSM stages are there?

Four stages with surveillance actions, Stage I to Stage IV, plus Stage 0 for newly shortlisted securities. The framework had six stages until SEBI and the exchanges reduced them to four in November 2019 (circular NSE/SURV/42790).

What is the additional surveillance deposit (ASD)?

A cash deposit that buyers pay on securities in GSM Stage II and above: 50% of the trade value in Stage II and 100% in Stages III and IV. It is over and above the usual margins, earns no interest, and is retained for about a month before release on a published schedule.

How does a stock come out of GSM?

The exchanges review the list every quarter, on the latest quarterly results, and move out securities that no longer meet the criteria. A monthly review of securities in Stage I and above can also move a security down one stage at a time, for example from Stage III to Stage II.

ASM guide

What is GSM (Graded Surveillance Measure)?

Last reviewed 13 October 2026 · by Rachid Asen

The Graded Surveillance Measure (GSM) is a set of surveillance actions that NSE and BSE, with SEBI, apply to securities whose price is not in line with the company's financial health and fundamentals. A security on GSM keeps trading, but under conditions that get stricter stage by stage, from a 100% margin to trading only once a week.

Who is shortlisted

The exchanges shortlist securities every quarter on objective criteria set in joint surveillance meetings with SEBI. For mainboard securities, according to the NSE FAQ linked under Sources, either set qualifies:

Criteria I: net worth of ₹10 crore or less, net fixed assets (tangible assets plus capital work in progress) of ₹25 crore or less, and a P/E above twice the Nifty 500's or negative.
Criteria II: full market capitalisation under ₹25 crore, and a P/E above twice the Nifty 500's; or, with a negative P/E, a price-to-book value above twice the Nifty 500's or negative.

SME securities have their own, lower thresholds. Some securities are left out of shortlisting, among them those with derivatives, those in an NSE or BSE index, those listed through an IPO in the last year, and those that paid a dividend in each of the last three years. A newly shortlisted security starts at Stage 0.

The stages and what each one changes

Stage	Surveillance action
Stage 0	Shortlisted; no stage action yet. The security can move to Stage I and beyond when the stage criteria are met.
Stage I	100% margin and a price band of 5% or lower.
Stage II	Trade-for-trade settlement, a price band of 5% or lower, and an additional surveillance deposit of 50% of the trade value paid by buyers.
Stage III	Trade-for-trade, a price band of 5% or lower, trading once a week (every Monday, or the first trading day of the week), and a 100% deposit paid by buyers.
Stage IV	As Stage III, and the price cannot move up.

Securities move up one stage at a time on predefined criteria that the exchanges do not publish. GSM works in addition to any other surveillance action already on a security.

The additional surveillance deposit

From Stage II, every buyer, including institutions, pays a cash deposit: 50% of the trade value in Stage II and 100% in Stages III and IV. It comes on top of the usual margins, earns no interest, cannot be used for further trading, and is retained for about a month before it is released on the schedule the exchange publishes.

How a security moves down or leaves

Quarterly review: on the latest quarterly results, securities that no longer meet Criteria I or II move out of GSM.
Monthly review: securities in Stage I and above can move down one stage at a time, for example from Stage III to Stage II.

Changes are announced after market hours, typically one trading day before they take effect. Compare GSM with the other frameworks in ASM vs ESM vs GSM, and see what ESM is and what ASM is.

What is GSM in the stock market?: The Graded Surveillance Measure is a framework of SEBI and the exchanges for securities whose price is not in line with the company's financial health and fundamentals, such as earnings, book value, fixed assets, net worth, P/E and market capitalisation. A shortlisted security starts at Stage 0 and can move up to Stage IV, each stage adding stricter trading conditions.
How many GSM stages are there?: Four stages with surveillance actions, Stage I to Stage IV, plus Stage 0 for newly shortlisted securities. The framework had six stages until SEBI and the exchanges reduced them to four in November 2019 (circular NSE/SURV/42790).
What is the additional surveillance deposit (ASD)?: A cash deposit that buyers pay on securities in GSM Stage II and above: 50% of the trade value in Stage II and 100% in Stages III and IV. It is over and above the usual margins, earns no interest, and is retained for about a month before release on a published schedule.
How does a stock come out of GSM?: The exchanges review the list every quarter, on the latest quarterly results, and move out securities that no longer meet the criteria. A monthly review of securities in Stage I and above can also move a security down one stage at a time, for example from Stage III to Stage II.

Sources

NSE: FAQs – Additional Surveillance Measure (ASM), last updated 20 September 2024: shortlisting criteria, long-term stages I–IV, short-term stages I–II, review and exit. It cites circulars NSE/SURV/52090 (22 April 2022, long-term ASM) and NSE/SURV/52144 (28 April 2022, short-term ASM).
NSE: Additional Surveillance Measure (ASM): the framework's parameters and NSE's list of shortlisted securities.
BSE: Additional Surveillance Measure (ASM) and BSE: FAQs on ASM: BSE's circulars, its long-term and short-term ASM lists, and its daily “Applicability of Additional Surveillance Measure” notices.
NSE: FAQs – Graded Surveillance Measure (GSM), 15 April 2025: criteria, stages, reviews and the additional surveillance deposit.
NSE: Graded Surveillance Measure (GSM): the current list of shortlisted securities, stage by stage.

Exchange circulars change. Where this page and the current circular differ, the circular applies.

More ESM and ASM guides

What is ESM?Who can be put under ESM on NSE and BSE, what changes for the stock, and who decides.
ESM Stage 1The price-variation tests that put a stock in Stage 1 and the trading limits that follow.
ESM Stage 2When a Stage 1 stock moves to the stricter Stage 2, and when it can move back.
ESM exit rulesThe weekly review, the 90-day minimum and why a Stage 2 stock exits in two steps.
What is ASM?What ASM is, its long-term and short-term frameworks, the typical measures and who decides.
Long-term ASM (LT-ASM)The four long-term stages, what each one changes, and the 90-day stage-wise exit.
Short-term ASM (ST-ASM)The two short-term stages, their margins and the 5 or 15 trading-day review.
ASM vs ESM vs GSMWhat triggers each measure, its stages and typical limits, side by side.

Not investment advice. This page explains the exchanges' published rules for education only. It does not recommend buying, selling or holding any security. Inclusion, stage changes and exit are decided solely by NSE and BSE.