Related Party Transactions: The 2026 Playbook Every Listed Company CS Should Run

If you've ever stayed up the night before an audit committee meeting cleaning up an RPT register that was 80% blanks and 20% question marks, this article is for you. Related Party Transactions are where listed companies most consistently embarrass themselves in front of SEBI — and the post-2023 LODR amendments dropped the materiality bar from 10% to 2%, which means a much larger volume of transactions now needs explicit board sign-off. The old playbook does not work in 2026. Here is the one that does.

What counts as an RPT in 2026 (you might be surprised)

Two definitions, and you must satisfy both:

• Companies Act, Section 188 read with Rule 15. Director, KMP, relative of either, holding/subsidiary/associate, any entity in which a director or relative holds 2%+, and the catch-all “any other person” the board may designate.
• SEBI LODR Regulation 2(1)(zb), as amended in 2022 and 2023. Adds a wider net: anyone holding 20%+ of the listed entity, anyone with whom the listed entity transacts whose downstream beneficiary is a related party, value-chain entities in some sectors.

For listed entities, LODR is wider — when in doubt, treat the transaction as an RPT.

The materiality reset that broke every old policy

Pre-2023: a transaction was “material” (requiring shareholder approval) only if it crossed 10% of consolidated turnover. Post-November 2023: 2% of consolidated turnover OR ₹1,000 crore, whichever is lower. For a company with ₹5,000 crore turnover, the threshold dropped from ₹500 crore to ₹100 crore overnight.

Most listed-company RPT policies still reference 10%. Audit committees are quietly approving things that should be going to shareholders. The first thing to fix this quarter is the policy text.

The three-gate approval model that works

Forget the form-by-form approach. Build the workflow around three gates.

1. Gate 1 — Audit committee. Every RPT, without exception. Omnibus approvals valid for one financial year, capped at ₹1 crore per transaction, with quarterly review of utilisation.
2. Gate 2 — Board. Required for RPTs above audit committee delegated limits or where the audit committee specifically refers it.
3. Gate 3 — Shareholders. Mandatory for material RPTs (2% / ₹1,000 cr threshold). Special resolution by majority of minority — promoters and related parties cannot vote.

The seven mistakes we still see at NIFTY 500 companies

• Omnibus approvals without quarterly review. The approval was for ₹1 crore over the year. By Q3 you're at ₹2 crore and nobody updated the audit committee.
• Treating arm's-length as a defence. Arm's-length pricing helps with tax, not with LODR. The transaction still needs the right approval.
• Missing the “to or with” trap. An RPT is any transaction with the related party — sales, purchases, loans, guarantees, leases, services, royalties, even free office space. People remember sales and purchases. Most miss royalties and shared cost allocations.
• Forgetting subsidiary-level RPTs. A material RPT at a material subsidiary still needs the listed parent's shareholder approval. The subsidiary's own board cannot be the final word.
• Voting machinery oversight. When a related-party shareholder accidentally votes, the resolution is voidable. Build the e-voting tag-and-block before, not after, results.
• Disclosure form lag. RPT disclosures under LODR Regulation 23(9) must be filed within 30 days of the half-year. The format changed in 2024. The number of companies still using the old format would surprise you.
• Promoter cross-holdings ignored. If a promoter holds 20%+ in another listed entity that is not a subsidiary, the entity is a related party for LODR purposes even when it is not under Section 188.

The CS workflow that prevents 95% of RPT failures

1. One canonical related-party list. Refreshed quarterly. Owner: CS. Sources: SH-1, MGT-7, BEN-2, KMP declarations, SBO declarations, promoter family declarations.
2. Pre-transaction RPT check. Every counterparty above ₹25 lakh runs through the related-party list before the PO is cut.
3. Quarterly omnibus utilisation report. One sheet, audit committee pre-read. Approval, utilised, balance, exceptions.
4. Half-yearly LODR disclosure dry run. 10 days before the deadline, draft the disclosure, send for AC chair sign-off, file in the format current as of that quarter.
5. Material RPT escalation. Any single transaction above 1% of turnover gets fast-tracked to the AC chair for a view before it is signed.

How Delta Filings handles RPTs

Our RPT module ingests every related-party declaration filed with the company, cross-checks the counterparty of every transaction over a configurable threshold against the canonical list, and flags omnibus utilisation as it approaches 80% of the approved cap. Half-yearly LODR Regulation 23(9) disclosures are pre-drafted in the current format. None of this is novel — but it is the difference between an audit committee that reviews and one that rubber-stamps a register the team built the night before.

The closing thought

SEBI's enforcement posture on RPTs has hardened in 2024–26. Look at the orders against the larger mid-cap listed entities in the last eighteen months — the recurring word is “undisclosed RPT”. The companies that will not feature in the 2027 list are the ones running the three-gate model now, with a CS-owned canonical list, and an omnibus regime that is actually reviewed every ninety days.