You bought a mid-cap stock at ₹84. Over three weeks it ran to ₹140 with no earnings news, no bulk deals, no corporate announcement. Then one morning your broker sends a notification: the stock is now under ASM. Your margin requirement just doubled. You can no longer trade it intraday. And the stock drops 9% that same day simply because buyers vanished.
This is not a rare story. It plays out dozens of times a month on Indian exchanges. NSE and BSE run two separate surveillance mechanisms — ASM and GSM — to flag stocks that are behaving suspiciously. If you don't know how these lists work before you enter a trade, you're flying blind into a regulatory wall.
What ASM and GSM Actually Are
ASM stands for Additional Surveillance Measure. GSM stands for Graded Surveillance Measure. Both are tools that NSE and BSE use — with SEBI's blessing — to slow down trading in stocks showing unusual price or volume patterns. The logic is simple: if a stock is moving without any fundamental reason, it might be getting manipulated. The surveillance framework forces everyone to slow down and pay cash upfront.
ASM has 4 stages. GSM has 6 stages. Each stage tightens the screws further — higher margins, lower circuit filters, or outright restrictions on when you can trade. The two lists are not the same thing. They target different types of stocks and use different criteria to add or remove a stock.
Think of ASM as a yellow flag and GSM as a red-to-black flag. ASM often catches larger, more actively traded stocks. GSM is typically where smaller, illiquid stocks end up — especially ones with no revenue, no profit, and a price chart that looks like a vertical line.
The ASM Ladder: From Inconvenient to Brutal
When a stock enters ASM Short-term Stage 1, the margin requirement goes up to 50% for all positions. That alone discourages leveraged traders. Most retail participants who trade on 20–30% margins suddenly need to put in double the cash or cut their position.
ASM Short-term Stage 2 pushes margins higher and introduces a 5% price band, which is a tighter circuit filter than the standard 10% or 20% most stocks carry.
ASM Long-term kicks in when a stock has been under Short-term ASM for a while and still shows suspicious patterns. Long-term Stage 1 imposes a 100% margin on intraday — which effectively kills intraday trading entirely. You can't borrow from your broker at all. Every rupee of exposure needs a rupee of cash sitting in your account.
ASM Long-term Stage 2 is the harshest ASM level. Trading shifts to a Trade-for-Trade (T2T) settlement mechanism. There's no netting. Every buy and every sell must result in actual delivery. You cannot square off the same day. Position traders hate this because it locks up capital for two full settlement days per trade.
Stocks like Suzlon, Adani Power, and Vodafone Idea have all passed through ASM at various points. In Adani Power's case during the 2023 volatility following the Hindenburg report, multiple group stocks were placed under enhanced surveillance. When a large-cap name lands here, it's a signal that the exchange is watching closely — not necessarily that the company is fraudulent, but that the price action is being flagged as disorderly.
The GSM Ladder: Where Stocks Go to Die Slowly
GSM is a different animal. It primarily targets stocks in the Z category or those with weak financials — low earnings, high price-to-book mismatches, suspiciously high PE ratios relative to industry peers. The exchange reviews these quarterly using financial parameters, not just price-volume data.
GSM Stage 1 starts with a 100% margin requirement. Trading is normal frequency.
By Stage 2 and Stage 3, margins stay high and circuit filters drop further. Volume dries up because most retail participants don't have the cash to meet 100%+ margin calls on speculative positions.
Stage 4 and Stage 5 add more friction. The surveillance team can ask companies to clarify their financials and the exchanges publish the fact that no satisfactory response was received.
GSM Stage 6 is where things get genuinely extreme. Trading is allowed only once a week — usually on Mondays. The margin requirement is 200%. That means for every ₹1 lakh of stock you want to buy, you need ₹2 lakh sitting in your account. Volume at this stage is almost zero. Spreads are enormous. Exit is nearly impossible for anyone who is trapped long.
If you're holding a stock that reaches GSM Stage 6 and you need to sell, you might wait days for a buyer willing to trade at almost any price. This is the graveyard end of the GSM framework.
How a Stock Gets Added and Removed
The exchanges run ASM reviews monthly and GSM reviews quarterly, though they can act faster if there's an exceptional price or volume spike. The criteria for ASM include:
- High-low price variation over a short period (often 25–60% in under 3 months)
- Price-earnings ratio that is extreme relative to sector peers
- Volume surge that doesn't match delivery percentage
- Low market cap but high price increase
- Concentrated buying from a small number of client codes
For GSM, the financial parameters matter more: negative net worth, no revenue, consistent losses, or a PE ratio above 500 while peers trade at 20–30x.
Getting off the list requires the stock to sustain normal behaviour for a defined review period. Exchanges can move stocks down stages gradually. But there is no appeal mechanism for retail traders. The company's management can engage with the exchange, but you as an individual investor have no direct route to challenge the listing.
How to Check the Lists Before You Trade
NSE publishes updated ASM and GSM lists on its website under Market Regulation. BSE does the same. You can also use broker platforms — Zerodha's Kite, Groww, and Upstox all display margin requirements at the order level, which immediately tells you if a stock is under surveillance.
The direct NSE path is nseindia.com → Regulations → Surveillance → ASM/GSM. BSE publishes similar data under Surveillance on bseindia.com.
Check these lists before you enter any position in a small or mid-cap stock that has recently had a sharp run. A stock that isn't on the list today can be added overnight and you'll find out when you try to square off an intraday position and discover the T2T flag.
Some brokers send SMS or app notifications when stocks in your watchlist get added to ASM or GSM. Enable those alerts if your platform offers them.
Before You Touch a Surveillance Stock
ASM or GSM placement is not automatically a death sentence for a stock. Suzlon exited surveillance, cleaned up its balance sheet, and went on to be one of the better-performing power sector stories between 2022 and 2024. The label changes, valuations reset, and sometimes a stock becomes genuinely interesting after the speculative froth has been cleared out.
But don't enter a surveillance stock without answering three things first. Can you afford the margin requirement — 100% or 200%? Can you accept that exit might be slow, illiquid, or delayed to specific trading days? And do the actual financials of the company justify any position at all, even after the price has been beaten down?
If all three answers are yes, there's a trade to evaluate. If any one is no, walk away and find a stock where the exchange isn't watching your every tick.