Ahmedabad / Mumbai | 10-Oct-2025, 11:15 IST — Filed via NSE Corporate Disclosure
Fonebox Retail Ltd (NSE: FONEBOX) informed the National Stock Exchange today that Regulation 27(2) of SEBI’s Listing Obligations and Disclosure Requirements (LODR) is not applicable to the company for the quarter ended 30 September 2025 (Q2 FY26). The submission, made under standard corporate-governance reporting obligations, cites the exemption available to SME-listed companies under Regulation 15(2).
What the Filing Says
In its communication to NSE, the company stated:
“As per Regulation 15(2) of SEBI (LODR) Regulations, 2015, compliance with corporate governance provisions contained in Regulations 17 to 27 and clauses of Schedule V shall not apply to entities listed on SME Exchange. Accordingly, Regulation 27(2) is not applicable for the quarter ended 30 September 2025.”
The company requested the exchange to take the filing on record, ensuring there is no misunderstanding about its compliance status.
What is Regulation 27(2)?
- Reg 27(2) requires listed entities to file a quarterly compliance report on corporate governance with stock exchanges.
- The report typically covers board structure, independent directors, audit committee composition, related-party transactions, whistleblower policies, and other governance disclosures.
- For mainboard listed companies, the regulation is mandatory.
- Exemption: Under Reg 15(2), SME and Emerge-listed entities are not required to comply with these corporate governance provisions until they migrate to the main board.
Why It Matters
- For Fonebox Retail: The filing confirms that the company is within its rights to claim exemption and avoids regulatory penalties for not submitting the quarterly governance compliance report.
- For Investors: It highlights that shareholders in SME companies do not receive the same level of governance disclosures that are standard for mainboard-listed peers.
- For Regulators: Such filings are important to maintain record-keeping and transparency about why certain companies are not publishing governance reports.
About Fonebox Retail
- Business: Operates in the retail distribution of mobile phones, accessories, and consumer electronics.
- Listing: Fonebox is listed on NSE’s SME platform (Emerge), which caters to smaller, high-growth enterprises.
- Compliance: In its past annual reports and filings, the company has consistently noted that corporate-governance requirements under Chapter IV of SEBI LODR are “not applicable” owing to its SME status.
- Growth: SME-listed companies like Fonebox often look to migrate to the main board once they cross thresholds in paid-up capital, net worth, and profitability.
Implications for Investors
- Reduced Transparency: Investors will not get quarterly updates on board independence, governance processes, or whistleblower mechanisms.
- SME Dynamics: This is common among SME listings, but investors must rely more on annual reports and audited results for governance insights.
- Future Migration: If and when Fonebox migrates to the main board, it will need to comply with Reg 27(2) and file governance reports quarterly.
- Voluntary Disclosure: Some SMEs voluntarily publish governance data to build investor trust, though it is not mandatory.
Sector & Market Context
India’s SME exchanges have over 400 listed companies, many of which take advantage of governance exemptions. Regulators balance reduced compliance burden with the need to support capital-raising for small businesses.
- Pros: Easier compliance, lower costs for SMEs.
- Cons: Limited investor visibility on governance practices, which can heighten risk perception.
- Trend: As SME listings gain traction, there is growing debate on whether certain governance provisions should be gradually phased in for better transparency.
Ticker Snapshot — Fonebox Retail (NSE: FONEBOX)
Outlook
The disclosure underscores Fonebox Retail’s regulatory compliance within the SME framework. For now, investors should recognize that governance reporting is lighter compared to mainboard peers.
- Short term: No impact on operations or stock fundamentals.
- Medium term: Investors will track whether the company opts for voluntary governance disclosures.
- Long term: Migration to the main board will eventually mandate fuller corporate-governance compliance.
For shareholders, awareness of the SME exemption framework is critical in setting expectations on transparency.
