What does GSM Stage 4 mean?

In the context of the stock market's Graded Surveillance Measure (GSM), Stage 4 signifies that a security (stock) has severe trading restrictions, including trading only once per week and requiring a substantial Additional Surveillance Deposit (ASD) of 200% of the trade value from buyers.
The GSM framework, implemented by regulatory bodies like the Securities and Exchange Board of India (SEBI) and stock exchanges, monitors stocks that show unusual price movements not commensurate with their financial health to protect investors from potential manipulation.
GSM Stage 4 Details
Stocks in Stage 4 face significant limitations to curb speculative activity and alert investors to potential risks:
Trading Frequency: Trading is only permitted once a week, typically on the first Monday of the week.
Settlement Type: All trades are processed on a "trade-for-trade" basis, meaning only delivery-based transactions are allowed, and no intraday or speculative trading is possible.
Price Band: The stock operates within a strict price band, usually 5% or lower.
Additional Surveillance Deposit (ASD): Buyers are required to deposit an ASD of 200% of the trade value upfront. This deposit is non-interest bearing and is retained until the stock's review, making the transaction less attractive for short-term traders.