1. Monetary Penalties and Fines

• Non-compliance with SEBI regulations, especially Listing Obligations and Disclosure Requirements (LODR), can attract heavy monetary penalties.
  
• Fines may vary based on the nature and gravity of the violation, and can range from ₹1 lakh to ₹1 crore or more, depending on the offense.
  
• Penalties are often levied for:
  
  • Non-submission of financial results
    
  • Delay in disclosures or filings
    
  • Insider trading violations
    
  • Misleading or incomplete information to investors

2. Suspension or Delisting of Securities

• In cases of serious or repeated violations, SEBI or the stock exchange may suspend trading of the company’s shares.
  
• Continued non-compliance can lead to compulsory delisting, which removes the company from the stock exchange.
  
• This results in a loss of liquidity and public market access, severely affecting investor confidence and company valuation.

3. Prosecution and Criminal Action

• For willful or fraudulent violations (like insider trading, manipulation, or false disclosures), SEBI can initiate criminal proceedings.
  
• Under the SEBI Act, 1992, the company and its officers may face:
  
  • Imprisonment up to 10 years
    
  • Fines up to ₹25 crore or three times the profit made, whichever is higher
    
• SEBI may also refer the case to other agencies like the Enforcement Directorate (ED) or SFIO for deeper investigation.

4. Debarment of Promoters, Directors, and Officers

• SEBI has the authority to bar individuals involved in non-compliance from:
  
  • Accessing capital markets
    
  • Holding board positions in listed companies
    
  • Launching new public issues
    
• This affects the company’s leadership and may also lead to changes in board composition as mandated by SEBI.

5. Reputational Damage and Investor Loss

• Non-compliance leads to loss of investor trust, media scrutiny, and lower stock prices.
  
• It may result in shareholder lawsuits, withdrawal of institutional investors, and downgrades in credit ratings.
  
• Companies often struggle to raise capital or maintain partnerships following regulatory action.