How to read a Form C insider disclosure

Knowing how to read a Form C disclosure is mostly a matter of knowing which of its fifteen columns carry the signal. The form is the continual disclosure an Indian listed company files with the exchanges when a promoter, promoter group member, designated person or director trades above the quarterly threshold. Read in the wrong order it produces confident wrong answers, most often by treating a pledge as a sale. This guide walks the columns in reading order. It is not investment advice.

Read the three holding columns first

The arithmetic of the disclosure sits in three places: the type and number of securities held prior to the transaction with the percentage of shareholding, the securities acquired or disposed of with their number and value, and the securities held after the transaction with the resulting percentage.

If the post-transaction number equals the prior number, the row is not a change in economic holding. That is the usual signature of a pledge or a revocation.

Then read the transaction type, not the direction

The transaction-type column names purchase, sale, pledge, revocation and invocation, plus an "others, please specify" option. Three of those are financing events rather than trades:

• Pledge. Shares offered as security for a loan. The person still holds them.
• Revocation. The pledge is released.
• Invocation. The lender sells the pledged shares to recover the loan. SEBI's FAQs confirm that when a lender sells shares pledged by a designated person, the transaction is represented as an invocation.

For the threshold arithmetic, SEBI's FAQs say a pledge is valued at the market value on the date of the pledge or revoke transaction, not the size of the loan behind it. Background on the instrument itself is in what is promoter pledging and how to check promoter pledging.

Then the dates, in the right order

Three date fields sit side by side and mean different things. The from and to columns describe the period the transaction or series covers, because Regulation 7(2)(a) lets a series of trades over a calendar quarter aggregate into one disclosure. The date of allotment advice or acquisition of shares applies where securities were allotted rather than bought. The date of intimation to the company is the one that starts the second clock: the company has two trading days from receipt to notify the exchange.

So a Form C published today can describe trading that finished several days ago, and the gap is visible in the form itself rather than something you have to guess at.

Then the mode, and the derivatives table

The mode column separates on-market trading from public issue, rights, preferential offer, off-market, inter-se transfer and ESOPs. Two rows of the same size mean very different things if one is an open-market purchase and the other an inter-se transfer within a promoter family.

Below the securities table, a second table reports derivatives on the company's securities: contract type and specifications, with buy and sell legs by notional value and number of units. For options, notional value is premium plus strike price.

What will not appear at all

Bonus issuance and shares received pursuant to a scheme are outside the disclosure obligation, and a transfer between two demat accounts of the same person is not trading because beneficial ownership does not change. A holding can therefore move without a Form C behind it.

For the rule that produces the form, see Form C under SEBI insider trading rules and what is insider trading disclosure. For the one-time form filed on appointment, see Form B vs Form C. For tracking these across companies, see insider trading tracker India.

Flock reads these disclosures as they are published, keeps the transaction type and the dates intact, and links each one back to the exchange filing. What the data means for your money is your call to make.