BSE Listing Process and Requirement

Ashish M. Shaji

17 Nov, 2020

In this article we shall discuss the BSE (Bombay Stock Exchange) listing process and requirements.

Minimum Listing Requirements for New Companies

The following eligibility criteria have been prescribed for listing of companies on BSE, through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs):

• Minimum paid capital should be Rs. 10 Cr for IPO and Rs. 3 Cr for FPO.
• Issue size cannot be less than Rs. 10 Cr.
• The minimum capitalization post-issue should be not less than Rs. 25 Cr.

Take permission to use the name of BSE in a Company’s Prospectus

Companies which desire to list their shares/ securities offered through a public issue are compulsorily required to obtain the prior permission of BSE to use their name in their prospectus and other documents before filing the same with the Registrar of Companies (ROC).

 Then, BSE may grant permission to companies to use the name of BSE in their prospectus/offer documents.

Then comes the Letter of Application

A Letter of Application of company which is seeking to list its securities on Bombay Stock Exchange(BSE) is required to submit to all the designated stock exchanges where it wants to have its securities listed before filing the same with the Registrar of Companies (ROC).

Allotment of Securities

Within 30 days of the date of closure of the subscription list, a company is required to complete allotment of shares and then approach the Designated Stock Exchange for approval of the basis of allotment.

Trading Permission

A company should take trading permission as per SEBI Guidelines^[1], and an issuer company should complete all the formalities for trading which are required for all the designated stock exchanges where the securities are to be listed that too within 7 working days of finalization of the basis of allotment.

By 30th April of every financial year, all listed companies are required to pay BSE listing fees as per the Schedule of Listing Fees prescribed from time to time.

BSE Listing requirement for SME

The basic requirements for SME listing are as follows:

•  Post issue paid-up capital should not be less than Rs. 3 Cr
• The net worth of the company (as per latest balance sheet) should not be less than Rs, 3 cr.
• The company should have net tangible assets of Rs. 3 Cr as per latest Balance sheet.
• Soundtrack record is mandatory. There should be sufficient distributable profits as per Section 123 of the Companies Act 2013 for 2 years proceeding out of 3 years. Extraordinary income shall not be considered as distributable profit.

Points to know regarding BSE Listing

1. What needs to be done at the Planning stage: Merchant Banker should be appointed by the Company who want to undergo listing in BSE SME for Compliance work.
2. Document Preparation: Documents required is to be prepared for filing by Merchant Banker only after he conducts the process of due diligence of the Company, and plan the IPO structure, issuance of shares, and financial requirements, etc.
3. Public Offering: Schedule for the Initial Public Offer as to when it opens and closes is fixed and then the Company should submit the documents as per the checklist to the Designated Exchanges for finalization of the basis of allotment; after the closure of IPO.

SME Listing Process

 The SME listing process is an easy process to follow. It is provided as under –

• Submission of Draft Prospectus
• Approval
• Verification & Site Visit
• Approval
• Filing of Prospectus with ROC by Merchant Banker.

Conclusion

BSE is the oldest stock exchange in India. The BSE Listing process requires proper compliance of every aspect including documentation. It also includes payment of prescribed fees for Listing. Consider reading our blogs for more information on the same.

Read our article:Shares Listing Procedure in India