PositoAI marks warning signs at listed companies on two levels: red flags, called PosiRed, and yellow flags, called PosiYellow. Together they form PosiFlag. (For what a red flag means in investing generally, see our separate guide.) Knowing the difference helps you react in proportion: take serious events seriously, and watch early signals without overreacting.
Red flags (PosiRed): serious events
A red flag records a serious event at a company. It covers three kinds of events:
- Regulatory actions: orders or actions by market regulators, tracked across 7 major markets. In India this includes SEBI orders.
- Bankruptcy or insolvency: a company disclosing insolvency proceedings or a bankruptcy filing.
- Delisting: a notice that a company's shares are being removed from a stock exchange.
Each red flag shows a severity from 1 to 10. For example, as of 10 October 2026, Reliance Home Finance and Arshiya both carried red flags for disclosed insolvency proceedings. All red flags are listed on the red flags page, which you can sort by newest or most severe.
Yellow flags (PosiYellow): stress signals
A yellow flag is a stress signal, not a legal finding. In India it mainly tracks promoter share pledges. For US companies it also covers insider pledges, late filings, auditor changes, write-downs, restatements and debt events. In any market, a pending merger or demerger is shown as a yellow flag too. Each yellow flag carries points from 1 to 10. Our full guide to yellow flags (PosiYellow) explains every type.
The key differences
- Nature: a red flag is a serious event that has happened; a yellow flag is a warning sign that may or may not lead anywhere.
- Legal weight: red flags are often linked to official actions or filings; yellow flags are not legal findings.
- Scale: red flags show a severity from 1 to 10; yellow flags show points from 1 to 10.
- What to do: a red flag calls for careful investigation before anything else; a yellow flag calls for monitoring and context.
- Typical example: a red flag might be a regulator's order or an insolvency filing; a yellow flag might be a 90%+ promoter pledge, like Orient Green Power at 99.99% pledged as of 10 October 2026.
What both have in common
Both levels lower a company's Positivity Score while they are active. The exact amounts are part of PositoAI's proprietary method and are not published. Both stop counting once resolved, for example when an order is closed, a pledge is released or a merger is completed, and both stay in each company's flag history afterwards.
Why two levels help
A single warning list mixes very different situations: a company in insolvency and a company with a modest pledge would look alike. Two levels avoid two common mistakes: ignoring early warning signs, and overreacting to every small signal. A red flag tells you to stop and investigate; a yellow flag tells you to keep watching.
How to read flags on a company page
- Step 1. Look at the overview: it shows how many active red flags (PosiRed) and yellow flags (PosiYellow) the company has.
- Step 2. Open each flag to read what it is, when it was detected and whether it is still active.
- Step 3. Open the Flags tab for the full history, including resolved flags.
- Step 4. Read the flags together with the Positivity Score, the AI summary, recent news and the financials in Go Deep.
The strongest warning is a combination: an active red flag together with high yellow flag points. A company with neither still needs ordinary research, because no flag system can catch everything.
Summary
Red flags (PosiRed) record serious events: regulatory actions, bankruptcy or insolvency, and delistings, with a severity from 1 to 10. Yellow flags (PosiYellow) record stress signals such as promoter pledges, with points from 1 to 10, and are not legal findings. Both lower the Positivity Score while active. See the latest of both on the PosiFlag page.
PositoAI is for research and education only and is not investment advice. Please consult a SEBI-registered adviser before investing.