A yellow flag is a warning sign that something at a listed company deserves a closer look, even though nothing illegal or final has happened. On PositoAI, yellow flags are called PosiYellow. They form the second level of PosiFlag, PositoAI's two-level warning system, next to red flags (PosiRed) for serious events. This guide explains every type of yellow flag, how the points work and how to use them.
What a yellow flag means
A yellow flag is a stress signal. It points to pressure, uncertainty or a change that can affect a company, but it is not a legal finding. A company with a yellow flag has not been found guilty of anything. The flag simply says: this is worth checking before you form a view.
Serious events, such as an order by a market regulator, an insolvency filing or a delisting, are not yellow flags. They are shown as red flags (PosiRed).
Types of yellow flags
In India, the main yellow flag is a promoter share pledge: the controlling shareholders have borrowed money against their own shares. A large pledge can lead to forced selling if the share price falls. Our guide on how to read promoter share pledge explains this in detail.
For US companies, yellow flags cover warning signs found in company filings:
- Insider share pledge: company insiders have pledged shares as security for loans.
- Late filing: the company told regulators it could not file its financial report on time.
- Auditor change: the company's auditor resigned or was replaced.
- Write-down: the company reduced the value of some of its assets, such as goodwill or investments.
- Restatement: the company said earlier financial statements should no longer be relied on and will be corrected.
- Debt event: a default, an acceleration of debt or a similar warning about the company's borrowing.
In any market, a pending merger or a demerger is also shown as a yellow flag. These are normal business events, but while they are under way, the company's past figures may not reflect what it will look like afterwards, so comparisons need extra care.
How yellow flag points work
Each yellow flag carries points from 1 to 10. More points mean more or stronger warning signs. For a promoter pledge, the rule is simple: the larger the share of promoter holding that is pledged, the more points. A company where almost all promoter shares are pledged, such as Orient Green Power with 99.99% pledged as of 10 October 2026, shows the maximum.
Active yellow flags lower a company's Positivity Score. The exact amounts are part of PositoAI's proprietary method and are not published.
Where to find yellow flags
- The yellow flags list shows every company with an active stress signal. You can sort it by Most Points or Newest First.
- Each company page shows its active yellow flags and their points in the overview.
- The company's Flags tab lists every flag, active and resolved.
- The PosiFlag page shows live counts and the latest flags of both levels.
When a yellow flag goes away
A yellow flag stops counting once the signal ends: for example, when promoters release a pledge, when a merger or demerger is completed, or when a late report is filed. Resolved flags stay in the company's flag history, so you can see what happened in the past.
How to use yellow flags well
- Read the flag itself: a small pledge and a near-total pledge carry very different weight.
- Check for red flags too. A yellow flag together with a red flag is a much stronger warning than either alone.
- Look at the trend: a pledge that is falling, or a merger close to completion, reads differently from a new or growing signal.
- Open Go Deep to see whether debt, profits and cash flow support or weaken the concern.
- Add the company to your Watchlist to see when flags are added or removed.
Summary
A yellow flag (PosiYellow) 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; and in any market it marks a pending merger or demerger. Points run from 1 to 10, active flags lower the Positivity Score, and resolved flags stay in the history. Browse the yellow flags list, or read how both levels compare in our guide to red flags vs yellow flags.
PositoAI is for research and education only and is not investment advice. Please consult a SEBI-registered adviser before investing.