LISTING OF SECURITIES

LISTING OF SECURITIES

Listing means admission of the securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc.

The objectives of listing are mainly to :

provide liquidity to securities;
mobilize savings for economic development;
protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the Exchange.

A company intending to have its securities listed on the Exchange has to comply with the listing requirements prescribed by the Exchange, which are as under :

New Companies
Companies listed on other stock exchanges
Companies delisted by this Exchange seeking relisting on this Exchange
Minimum Number of Shareholders
Permission to use the name of the Exchange in an issuer Company. s prospectus
Submission of Letter of Application
Allotment of Securities
Allotment Letters/Certificates and Trading Permission
1% Security Deposit.
Listing Fees
Compliance with Listing Agreement
"Z" Group
One Window Clearance

[I] New Companies

Minimum Capital : New companies can be listed on the Exchange, if their Issued & Subscribed Equity Capital after the public issue, is Rs.10 crores and above.
Minimum Public Offer : As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, securities of a company can be listed on a Stock Exchange only when at least 25% of each class or kind of securities is offered to the public for subscription. For this purpose, the term "offered to the public" means only the portion offered to the public and does not include reservations of securities on firm or competitive basis.

SEBI may, however, relax this condition on the basis of recommendations of stock exchange(s), only in respect of a Government company defined under Section 617 of the Companies Act, 1956.

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[II] Companies listed on other stock exchanges

The companies listed on other Stock Exchanges and seeking listing on this Exchange are required to fulfill the following criteria:

Minimum Issued Equity Capital of Rs.3 crores to Rs.10 crores;
Profit track record for atleast three years;
Minimum Market Capitalisation of Rs.20 Crores, based on average price of last six months;
Trading for a minimum 50% of the total trading days during the same six months on any stock exchange;
Minimum average volume traded per day during the last three complete months should be 500 shares and minimum 5 trades per day;
25% of the issued capital should be with public (including body Corporates) and minimum 15 shareholders per Rs. 1 lakh of capital in the public category.

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[III] Companies delisted by this Exchange seeking relisting on this Exchange

The companies delisted by this Exchange and seeking relisting are required to have a minimum Issued & Subscribed Equity Capital of Rs.10 crores.

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Minimum Number of Shareholders

The public offer should result in a wide distribution of shares among the general public and there should be minimum 25% of the company. s issued capital with the public (inclusive of corporate bodies) and at least 5 public shareholders for every Rs.1 lakh of net capital offered to the public after public issue and at least 10 public shareholders for every Rs.1 lakh of equity offered to the public through . offer for sale. .

For this purpose, a public shareholder means a person who is neither a promoter nor does he hold more than 1% of the equity capital of the company. This is also a continuous listing requirement.

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Permission to use the name of the Exchange in an Issuer Company' s prospectus

The Exchange has started a procedure in terms of which the companies desiring to list their securities offered through public issues are required to obtain its prior permission to use the name of the Exchange in their prospectus or . offer for sale. documents before filing the same with the concerned office of the Registrar of Companies. The Exchange has since last two years formed a "Prospectus Scrutiny Committee" to analyse draft prospectus/offer documents of the companies in respect of their forthcoming public issues of securities and decide upon the matter of granting them permission to use the name of "The Stock Exchange, Mumbai" in their prospectus/offer documents. The Committee evaluates the promoters, company, project and several other factors before taking decision in this regard.

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Submission of Letter of Application

As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on the Exchanges is required to submit a Letter of Application to all the Stock Exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies.

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