The Securities and Exchange Board of India on Monday directed stock exchanges to take action against 331 suspected shell companies, PTI reported. The shares of these 331 companies will not be available for trading this month, said a Sebi circular sent to stock exchanges on August 7, reported Mint.

The regulator issued the directives after the Union Corporate Affairs Ministry shared a list of 331 listed companies that are suspected shell firms, which could face compulsory delisting from the stock market. The Sebi asked the Bombay Stock Exchange, the National Stock Exchange and the Metropolitan Stock Exchange to keep the 331 firms under surveillance. It said the firms would be subjected to independent audits, and their financial information could be examined to provide evidence in court if necessary.

“Trading in these securities shall be permitted once a month [on the first Monday of the month],” Sebi’s communication to the bourses said. A surveillance deposit of 200% of trade price would also be collected from those who buy shares in these companies. This deposit will be held by the bourses for five months, the Sebi said.

Both the Sensex and the Nifty fell immediately on Tuesday following the Sebi’s announcement. At 1.12 pm, the Sensex was trading 177 points down at 32,095, while the Nifty had recovered slightly from its noon position to trade over 54 points at 10,002.