NSE Listing Process in India

Ashish M. Shaji

07 Apr, 2021

Initial Public Offer (IPO) is a very popular process through which an unlisted Company or start-up or early-stage company can be listed on the NSE for trade /sale of its securities to the public at large in the primary market. Generally, IPO was introduced for expansion of core business activities of the company or setting up new business activities or project and the consequence of IPO was dilution of promoter shares.

NSE (National Stock Exchange) Listing Process

Listing of securities can be done in either Capital Market or Wholesale Debt Market. There is a NSE Listing procedure to be followed but before that let’s look at the eligibility requirement.

Basic Eligibility Requirement

• Company must be registered as a Public Company under Companies Act 1956 or Companies Act 2013^[1]
• Company should be at least 3 years old and 2 years should be positive net worth
• Post issue paid-up capital should not be more than 25 Cr
• Documents requirement for NSE Listing

• A profile of the promoters and company management.
• Company profile with details of project undertaken
• Certified Copies of Annual Report for the last 3 years.
• Certified Copies of Draft Offer Document.
• Certified copies of Memorandum & Articles of Association of the company
• 5 years projected business plan with the balance sheet, PL & Cashflow

Submission of Memorandum and AOA

It requires that the Articles of Association of the Issuer wanting to list its securities on NSE should be submitted. If any of the provisions in the AOA are not at par with the corporate practice then it has to be removed by making amendments in the AOA.

Approval of Draft Prospectus

The Issuer shall file the draft prospectus and mandatory application forms with National Stock Exchange. The draft prospectus is prepared in accordance with the laws mentioned etc. National Stock Exchange will peruse the draft prospectus only from the point of view of checking and then if any approval is given by National Stock Exchange in respect of the draft prospectus it should not be considered as approval under any laws, rules, any other guidelines, etc. The Company should also submit SEBI, the letter indicating observations on the draft prospectus or letter of offer by SEBI.

Submission of Application

Issuers who desire to list on NSE with their existing or new securities shall make an application to NSE for admission of their securities in the prescribed forms and fees, if any.

Benefits of NSE Listing

Benefits of National Stock Exchange Listing are as follows:

• Comprehensive marketplace – NSE listing has a mixed product concept, it deals in equity, debt, and derivative securities. The entire workflow has been designed by the use of the latest technology with the feature of trading, clearing and settlement services. National Stock Exchange Provides Market data feeds and education to the investor.
• Large Scale of operations– NSE systems are able to execute large no of orders on a real-time basis, the risk management system is a world-class level. Entire frameworks of NSE faster and automated
• High Visibility – The NSE trading system are visible for everyone and at all-time best 5 buy and sell orders are visible on the trading system. This educates to the investor to know about the market trend. The upcoming details of the company listed like financial results, Announcement i.e. available on the National Stock Exchange trading platform.
• Largest exchange – National Stock Exchange is the 4th largest exchange in the world.
• Unprecedented reach – NSE ranked upon No. 1 Position and it has a pan India network. Currently, it has more than 180K terminals and every terminal is supported by VSAT.
• Settlement Guarantee – NSE assumes a 100% settlement guarantee so that you are free from all trading clearing risks.
• High-level Broadcast facility for announcements–NSE has developed to publish the corporate announcement through the broadcasting mode on the NEAT system. The announcement of a merger, takeover, book closure, right issue, bonus issue is circulated across the country thus minimizing the scope of price manipulation or misuse.
• Business statistics for listed companies – National Stock Exchange provides statistics, trend, and industry analysis to all companies listed on NSE.
• Dedicated Investor service centres – NSE has developed 24×7 Customer service centres to take care of investor issues.

Conclusion

National Stock Exchange is the leading stock exchange of India. It was the first exchange in the country that provided a fully automated screen based trading system. For more information on NSE, BSE or Listing Requirements, read our blogs.

Read our article: Shares Listing Procedure in India