Kairosoft AI Solutions has kicked up a debate among the investor fraternity by taking on the BSE. The little known company, (earlier known as Pankaj Piyush Trade and Investment Ltd), moved the Delhi High Court against the exchange for keeping its stock under GSM Stage 4 (Graded Surveillance Measure).

In a notice to the exchange on April 8, the company said: “The management team has thoroughly reviewed the situation and unanimously concluded that further action is necessary to safeguard our interests and those of our shareholders. Consequently, we are proceeding to file a writ petition against GSM Stage-4. This legal action is not taken lightly, but we believe it is essential for upholding the integrity of our operations and ensuring that our stakeholder rights are protected.”

Subsequently, on April 9, the company moved the Delhi High Court through senior advocate Kapil Sibal. The petition was presented before Justice Vikas Mahajan, where submissions were recorded, and the court issued a notice to the respondents. The court directed that the respondents be prepared with a short affidavit in response to the matter, it said.

“Kairosoft AI Solutions Ltd remains committed to upholding the highest standards of compliance and integrity in all its operations. This legal action reflects our dedication to addressing concerns and ensuring a fair resolution in accordance with the law,” the notice added.

About Kairosoft

According to a disclosure on the BSE, the company has zero revenue in FY24 and posted a loss of ₹4.5 crore. For December quarter, it reported a revenue of ₹48 lakh and profit of ₹84 lakh.

Promoter holding stands at just 5.07 per cent (Vinod Kumar Bansal), a decline from 15 per cent in December 2024, while public hold the rest 94.93 per cent. Some 1,710 retail investors hold 49.13 per cent stake, in which nearly 6.5 per cent is being held by five individuals. Similarly, HNIs hold 14.67; and corporate bodies 7.36 per cent. No institutions, either domestic or foreign, including mutual funds and insurance companies, hold stake.

Data from Bloomberg reveal that the stock has climbed steadily from ₹42 in 2016 to the current level of around ₹330. The stock now commands a market cap of ₹39 crore.

According to the company website, it offers a wide range of AI-powered tools designed for content creation, including advanced text and code generation tools, as well as innovative solutions for visual and voice content. Its flagship product, VolkAI, empowers users with cutting-edge tools, the company claims.

The stock has been under ASM (Additional Surveillance Measure) on majority of days since February 2020, and now placed under GSM Stage-4.

While Kairosoft AI moved court, a few others, especially from trading fraternity, aired their displeasure in social media about GSM/ASM due to liquidity concerns.

ASM framework

ASM was introduced in 2018 by the Securities and Exchange Board of India (SEBI) and exchanges to enhance market integrity and safeguard interest of investors. ASM has been implemented based on parameters such as High Low Variation, Client Concentration, Number of Price Band Hits, Close to Close Price Variation, PE Ratio and market capitalisation.

ASM has two stages where securities under stage-I will have a price band of 5 per cent or lower with 100 per cent VAR margin, and Stage 2 stocks will be moved to trade for trade category. Exchanges will review the stocks bi-monthly for entry and exit from ASM.

GSM, introduced in 2022, has 4 stages where the stock would be allowed to trade only once in a week (Monday) besides various other measures like price band, trade-for-trade and 100 per cent margin.

No doubt, these are really tough measures and are needed to strengthen the integrity of market, given the heightened manipulation, especially in a trending bull market.

As the Kairosoft AI case is sub judice, one has to wait for the court ruling and see whether it dismisses the case or gives any direction to the exchange.

However, if any company or investor genuinely feels that GSM/ASM is unwarranted for their stock, it should escalate the issue first with the exchanges and if not satisfied, could even approach SEBI.

As the ASM and GSM were introduced a few years ago, the frameworks need a closer scrutiny. Instead of restricting trade to only once a week (for Stage 3 & 4 stocks), trading can be allowed two days in a week. Similarly, the review meeting that happens once in two months can happen every month.

SEBI and exchanges could also set up a forum to redress companies’ complaints regarding GSM/ASM.

Published on April 11, 2025