As You already Know Importance of Company Secretary profession in Share marker world.Company Secretary is the amongst the few professionals which do various under share market from listing the company to the De-listing of a company from share market,from a merger to de-merger of the company.
The National Stock Exchange (NSE) is India’s driving stock exchange comprising various cities and towns across the country. The National stock exchange was set up by leading institutions to provide a modern, fully automated screen-based trading system with the national scope.
NSE has played a driving role in improving the Indian securities market in terms of microstructure, market practices, and trading dimensions. The share market today uses state-of-art information technology to give an effective and sheer trading, clearing and settlement mechanism and has witnessed several variations in products & services business.
Before talking about Process of listing of a company in national stock exchange I would like to entrust various Eligibility criteria which must be fulfilled by the every company Satisfy listing process.
What is The Eligibility Criteria For Listing in National Stock Exchange??
An applicant or company who desires listing of its securities with NSE must fulfill the following Conditions
1.Qualifications for listing Initial Public Offerings (IPO) are as below:
Paid up Capital
The paid-up equity capital of the applicant shall not be less than 10 crores and the capitalization of the applicant’s company equity shall not be less than 25 crores.
Conditions Before Listing:
The Issuer of IPO shall have adhered to conditions precedent to listing as arising from inter-alia from Securities Contracts (Regulations) Act 1956, Companies Act 2013, Securities and Exchange Board of India Act 1992, any rules and/or regulations written under foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate authority under foregoing statutes.
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At least three years track record of either:
the applicant seeking to list; or the promoters/promoting the company, incorporated in or outside India or Partnership firm and consequently converted into a Company (not in existence as a Company for three years) and proposes the Exchange for listing. The Company consequently formed would be considered for listing only on satisfaction of conditions stipulated by SEBI in this respect.
♦The company has not been applied to the Board for Industrial and Financial Reconstruction (BIFR).
♦The system of the company has not been washed out by the accumulated losses resulting in a negative net worth
The company has not received any winding up appeal admitted by a court.
♦Promoters mean one or more persons with minimum 3 years of experience of each of them in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally.
♦The applicant desirous of listing its securities should satisfy the exchange on the following:
♦No disciplinary action by other stock exchanges and regulatory authorities in past three years.
♦There shall be no substantial administrative or disciplinary action by a stock exchange or regulatory authority in the past three years against the company. In respect of promoters/promoting company(is), group companies, companies promoted by the promoters/promoting company(is) of the applicant company, there shall be no tangible regulatory or disciplinary action by a stock exchange or regulatory authority in the past one year.
Track Record of Director(s) of the Company.
Directors of the Company Applied for listing must have honest.a person having high moral values.
In respect of the track record of the directors, relevant disclosures may be insisted upon in the offer document concerning the status of criminal cases filed or nature of the investigation being undertaken with regard to alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of proposed company have or has been charge-sheeted with serious crimes like murder, rape, forgery, economic offences etc.
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2.Qualification For listing of Securities of Existing Companies
Paid up Capital & Market Capitalisation
The paid-up equity capital of the company shall not be less than 10 crores and the market capitalization of the applicant’s equity shall not be less than 25 crores.
♦Given that the requirement of 25 crores market capitalisation under this clause 1(a) shall not be applicable to listing of securities issued by Government Companies, Public Sector Undertakings, Financial Institutions, Nationalised Banks, Statutory Corporations and Banking Companies who are differently obliged to adhere to all the relevant statutes, guidelines, circulars, clarifications etc. that may be announced by various regulatory authorities from time to time.
♦The paid-up equity capital of the applicant company shall not be less than 25 crores (In case the market capitalisation is less than 25 crores, the securities of the company should be traded for at least 25% of the trading days during the last twelve months preceding the date of submission of application by the company on at least one of the stock exchanges where it is traded.)
♦The market capitalization of the applicant’s equity shall not be less than 50 crores.
♦The Company applied for listing shall have a net worth of not less than 50 crores in each of the three preceding financial years.
At least three years track record of either:
♦the applicant seeking to list; or
♦the promoters/promoting the company, incorporated in or outside India or For this proposal, the promoting company shall submit annual reports of three preceding financial years to NSE and also provide a certificate to the Exchange in respect of the following:
♦The company has not been applied to the Board for Industrial and Financial Reconstruction (BIFR)
♦The network of the company has not been washed out by the attached losses resulting in a negative net worth.
♦The company has not received any winding up appeal admitted by a court.
Promoters mean one or more persons with minimum 3 years of experience of each of them in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally.
♦The company applied should have been listed on any other approved Stock Exchange Listed for at least last three years or listed on the exchange having nationwide trading terminals for at least one year.
♦The applicant has paid dividend in at least 2 out of the last 3 financial years shortly preceding the year in which listing application has been made.
♦The applicant company has distributable profits in at least two out of the last three financial years (an auditor’s certificate must be provided in this regard).
♦The net worth of the applicant is at least 50 crores.
Note-While examining the profitability / ability to distribute a dividend, the nonrecurring income/extraordinary income shall be excluded from the total income.
Further in case of companies where criteria are satisfied on account of shares being issued at a premium for consideration other than cash, such cases be transferred to the Listing Advisory Committee (LAC) for consideration.
♦No Disciplinary action has been taken by other stock exchanges and administrative authorities in the past three years
♦The applicant, promoters/promoting company(is), group companies, companies promoted by the promoters/promoting company(is) have not been in default in payment of listing fees to any stock exchange in the last three years or has not been delisted or rejected in the past and has not been moved against by SEBI or other regulatory authorities in combination with investor-related issues or otherwise.
Change in Control of a Company/Utilization of funds raised from public
In the case of new promoters taking over listed companies which result in change in management and/or companies utilising the funds raised through public issue for the purposes other than those specified in the offer document, such companies shall make further disclosures (as required by the Exchange) with regard to switch in control of a company and utilisation of funds raised from public.
What is The Process Of Listing Company in to National Stock Exchange??
A COMPANY DESIRE TO LISTING has to take various steps before to making an application for listing its securities on the NSE. These steps are very necessary to assure the compliance of certain requirements by the applicant company before listing its securities on the NSE.
The various steps to be taken include:
1.Submission of Memorandum and Articles of Association.
Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 demands that the Articles of Association of the applicant company wanting to list its securities must contain requirements as given hereunder.
The Articles of Association of an Issuer shall contain the following provisions namely:
♦that there shall be no forfeiture of unclaimed dividends before the claim becomes prohibited by law.
♦that a general form of transfer shall be used.
♦that fully paid shares shall be free from all lien and that in the case of partly paid shares the Issuer’s lien shall be limited to money called or payable at a fixed time in regard of such shares.
♦that registration of transfer shall not be rejected on the ground of the transferor being either alone or jointly with any other person or persons owing to the Issuer company on any account whatsoever.
♦that any amount paid up in the progress of calls on any share may carry interest but shall not in respect thereof give a right to dividend or to participate in profits.
♦that right to call of shares shall not be given to any person without with the sanction of the Issuer in general meetings.
permission for Sub-Division/Consolidation of Share Certificate.
Note: The Appropriate Authority may take the privilege to any provision included in the Articles of Association of an Issuer which may be considered objectionable or thoughtless in the case of a public company and may require the inclusion of specific provisions deemed to be desirable and necessary.
The Issuer company shall file the design prospectus and application forms with NSE. The prospectus should have been made in accordance with the statutes, notifications, circulars, guidelines, etc. governing background and issue of prospectus controlling at the relevant time. The Issuers company may especially bear in mind the requirements of Companies Act, Securities Contracts (Regulation) Act, the SEBI Act and the relevant subordinate legislations thereto.
NSE will read the draft prospectus only from the point of view of examining whether the draft prospectus is in accordance with the listing requirements, and therefore, any permission given by NSE in respect of the draft prospectus should not be interpreted as approval under any laws, rules, notifications, circulars, guidelines etc. The applicant company should also submit the SEBI acknowledgment card or letter showing comments on draft prospectus or letter of offer by SEBI Act, 1957 and other various laws.
It must be remarked that any provision in the Articles of Association which is not in harmony with sound corporate practice has to be withdrawn by amending the Articles of Association.
Process For Applicant Company listing on NSE for the first time.
company desirous to list existing/new securities on the NSE shall make application for admission of their securities to trading on the NSE in the forms designated in this regard as per details are given hereunder or in such other form or forms as the Appropriate Authority may from time to time prescribe in addition thereto or in modification or substitution thereof.
♦Appendix ‘A’ – Clauses of Articles of Association.
♦Appendix ‘B’- Application Letter for Listing.
♦Appendix ‘C-1’ – Listing Application providing pre-issue details of securities.
♦Appendix ‘C-2’ – Listing Application providing post-issue details of securities.
♦Appendix ‘D’- Checklist for supporting documents ( as applicable to the issuer)
♦Appendix ‘E’ – Schedule of Distribution
♦Appendix ‘F’- Listing Agreement
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Listing of additional Issues by Issuers company already listed on NSE
Issuers company whose securities are already listed on the NSE shall apply for admission to listing on the NSE of any further issue of securities made by them. The application for admission shall be made in the forms designated in this regard or in such other form or forms as the Appropriate Authority may from time to time prescribe in addition thereto or in alteration or replacement thereof.
♦Appendix ‘E’ – Schedule of Distribution.
♦Appendix ‘G’- Application Letter for Listing of further issues.
♦Appendix ‘H’ – Listing Application providing details of securities.
♦Appendix ‘I’ – Checklist for supporting documents submitted (as applicable).
(Payable only for new and fresh issues and only when NSE is the Regional Stock Exchange)
The Associated Authority shall not allow admission to dealings of securities of an Issuer company which is not listed or of any new (original or further) issue of securities of an Issuer excluding Mutual Funds, which is listed on the NSE unless the Issuer company deposits and keeps deposited with the NSE (in cases where the securities are offered for subscription, whether through the issue of a prospectus, letter of offer or otherwise, and NSE is the Regional Stock Exchange for the Issuer) an amount calculated at 1% of the amount of securities offered for subscription to the public and or to the holders of existing securities of the Issuer, as the case may be for assuring compliance by the Issuer within the prescribed or specified period of all provisions and conditions hereinafter mentioned and shall be refundable or forfeitable in the manner hereinafter stated:
The Issuer company shall comply with all current requirements of law including all provisions of and under any notifications, directives and guidelines issued by the Central Government, SEBI or any statutory body or local authority or any body or authority acting under the authority or direction of the Central Government and all comprehensive listing requirements and conditions of the NSE and of each recognized Stock Exchange where the Issuer has applied for permission for admission to dealings of the securities, within the prescribed or stipulated period.
Documents and Information.
The documents and information prescribed in Appendix D or Appendix I (as the case may be) to this Regulation or such other documents and information as the Relevant Authority may from time to time prescribe, in supplement thereto or in modification or substitution thereof together with any other documents and information which the Relevant Authority may require in any particular case;
Fees for Listing
The listing fee applicable is as follows:
Beginning Listing Fees 50,000
Annual Listing Fees (based on paid-up share, bond, and/or debenture capital)
Up to 5 Crore 18,000
Above 5 Crore and up to 10 Crores 31,500
Above 10 Crore and up to 20 Crores 57,500
Above 20 Crore and up to 30 Crores 90,000
Above 30 Crore and up to 40 Crores 1,00,000
Above 40 Crore and up to 50 Crores 1,05,000
Above 50 Crores and up to 100 Crores 1,75,000
Above 100 Crore and up to 150 Crores 2,00,000
Above 150 Crore and up to 200 Crores 2,40,000
Above 200 Crore and up to 250 Crores 2,75,000
Above 250 Crore and up to 300 Crores 3,10,000
Above 300 Crore and up to 350 Crores 3,40,000
Above 350 Crore and up to 400 Crores 3,75,000
Above 400 Crore and up to 450 Crores 4,35,000
Above 450 Crore and up to 500 Crores 5,00,000
issuer Companies which have a paid-up share, bond and/or debenture and/or debt capital, etc of more than 500 crores will have to pay a minimum fees of 5,00,000/- and an additional listing fees of 3,400/- for every increase of 5 crores or part thereof in the paid-up share, bond and/ debenture and/or debt capital etc.
Companies which have a paid-up share, bond and/or debenture and/or debt capital, etc. of more than 1,000 crores will have to pay minimum fees of 8,50,000/- and an additional listing fees of 3,700/- for every increase of 5 crores or part thereof in the paid-up share, bond and/or debenture and/or debt capital etc.
The main story behind fees is ,The listing fees depend on the paid up share capital of the Company.
Where to Send Documents and Deposit Listing Fees??
Listing fees can be paid in Cheques/Demand Drafts favoring National Stock Exchange of India Limited payable at Mumbai.
In case your company fulfills the eligibility criteria, send the following information for further processing :
♦A brief note on the promoters and management.
♦Copies of the Annual Report for last 3 years.
♦Copies of the Draft Offer Document.
♦Memorandum & Articles of Association.
National Stock Exchange of India Ltd.,
5th Floor, Exchange Plaza,
Bandra (E), Mumbai 400 051.
Ph. No. (022) 26598236 / 8452
E-mail: [email protected]
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Thanks For Reading Such a Long Article Friends.