Listing of Securities 3
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Listing of Securities 3
The stocks, bonds and other securities issued by issuers require listing for providing liquidity
to investors. Listing means formal admission of a security to the trading platform of the
Exchange. It provides liquidity to investors without compromising the need of the issuer
for capital and ensures effective monitoring of conduct of the issuer and trading of the
securities in the interest of investors. The issuer wishing to have trading privileges for its
securities satisfies listing requirements prescribed in the relevant statutes and in the listing
regulations of the Exchange. It also agrees to pay the listing fees and comply with listing
requirements on a continuous basis. All the issuers who list their securities have to satisfy
the corporate governance requirement framed by regulators.
Benefits of Listing on NSE
The benefits of listing on NSE are as enumerated below:
NSE provides a trading platform that extends across the length and breadth of the
country. Listing on NSE thus, enables issuers to reach and service investors across the
country.
NSE being the largest stock exchange in terms of trading volumes, the securities trade
at low impact cost and are highly liquidity. This in turn reduces the cost of trading to
the investor
The trading system of NSE provides unparallel level of trade and post-trade
information. The best 5 buy and sell orders are displayed on the trading system and the
total number of securities available for buying and selling is also displayed. This helps
the investor to know the depth of the market. Further, corporate announcements,
results, corporate actions etc are also available on the trading system, thus reducing
scope for price manipulation or misuse.
The facility of making initial public offers (IPOs), using NSE's network and software,
results in significant reduction in cost and time of issues.
NSE's web-site www.nseindia.com provides a link to the web-sites of the companies
that are listed on NSE, so that visitors interested in any company can visit that company's
web-site from the NSE site.
Listed companies are provided with monthly trade statistics for the securities of the
company listed on the Exchange.
The listing fee is nominal.
CM Segment
Two categories, namely 'listed' and 'permitted to trade' categories of securities (equity shares,
preference shares and debentures) are available for trading in the CM segment. However, the
permitted to trade category is being phased out gradually and no new company is been given the
benefit of this category. At the end of March 2006, 1061 'listed' companies were available for
trading. These securities had a market capitalisation of Rs.2,813,201 crore. The growth of securities
available for trading on the CM segment is presented in Table 3-1.
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Listing Criteria
The Exchange has laid down criteria for listing of new issues by companies, IPOs by knowledge-
based issuers, companies listed on other exchanges, and companies formed by amalgamation/
restructuring, etc. in conformity with the Securities Contracts (Regulation) Rules, 1957 and
directions of the Central Government and the Securities and Exchange Board of India (SEBI).
The criteria include minimum paid-up capital and market capitalisation, project appraisal, company/
promoter's track record, etc. The listing criteria for companies in the CM Segment are presented
in Table 3-2. The issuers of securities are required to adhere to provisions of the Securities
Contracts (Regulation) Act, 1956, the Companies Act, 1956, the Securities and Exchange Board
of India Act, 1992, and the rules, circulars, notifications, guidelines, etc. prescribed there under.
Listing Agreement
All companies seeking listing of their securities on the Exchange are required to enter into a
formal listing agreement with the Exchange. The agreement specifies all the quantitative and
qualitative requirements to be continuously complied with by the issuer for continued listing. The
Exchange monitors such compliance. Failure to comply with the requirements invites suspension
of trading, or withdrawal/delisting, in addition to penalty under the Securities Contracts (Regulation)
Act, 1956. The agreement is being increasingly used as a means to improve corporate governance.
Shareholding Pattern
In the interest of transparency, the issuers are required to disclose shareholding pattern on a
quarterly basis. Table 3-3 presents the sector-wise shareholding pattern at end-December 2005
of 1036 companies listed on NSE. On an average, the promoters hold more than 55.63% of
total shares. Though non-promoter holding is nearly 43.93%, Indian public held only 17.03%
and the public float (holding by foreign institutional investors, mutual funds, and Indian Public)
is around 26.83%.
Listing Fees
The listing fees charged by the Exchange are presented in the following table:
Listing Fees in the CM Segment
Listing Fees Amount (Rs.)
Initial Fees 7,500
Annual Fees
Companies with Paid-up Share and/or Debenture Capital (Rs. crore):
Of 1 4,200
> 1 to = 5 8,400
> 5 to = 10 14,000
> 10 to = 20 28,000
> 20 to = 50 42,000
> 50 70,000
plus Rs. 1,400 for every additional
Rs. 5 crore or part thereof
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Compliance by Listed Companies
NSE has institutionalised a process of verifying compliance of various conditions of the
listing agreement. It conducts a periodic review for compliance on account of announcement
of book closure/record date, announcement of quarterly results, submission of distribution
schedule and annual reports, appointment of compliance officer, investor grievances, various
disclosures, etc.
Disclosures by Listed Companies
It is essential that all critical price sensitive/material information relating to securities is
made available to the market participants and the investors immediately to enable them to
take informed decisions in respect of their investments in securities. The Exchange therefore
ensures certain important timely disclosures by listed companies and disseminates them to
market through the NEAT terminals and through its website. The disclosures include
corporate actions, quarterly/half yearly results, decisions at board meeting, compliance with
corporate governance norms, non-promoters' holding, verification of media reports etc.
Keeping in mind the investor community and the importance of the information about
companies, NSE has also put a system in place wherein all corporate announcements including
that of Board meetings that a company discloses to the market is handled in a straight
through and hands free manner. As and when company submits information the same will
be seamlessly broadcast to the market.
De-listing
The securities listed on NSE can be de-listed from the Exchange as per the SEBI (Delisting
of Securities) Guidelines, 2003 in the following manner:
Voluntary De-listing of Companies
Any promoter or acquirer desirous of delisting securities of the company under the provisions
of these guidelines shall obtain the prior approval of shareholders of the company by a
special resolution passed at its general meeting, make a public announcement in the manner
provided in these guidelines, make an application to the delisting exchange in the form
specified by the exchange, and comply with such other additional conditions as may be
specified by the concerned stock exchanges from where securities are to be de-listed. Any
promoter of a company which desires to de-list from the stock exchange shall also determine
an exit price for delisting of securities in accordance with the book building process as
stated in the guidelines. The stock exchanges shall provide the infrastructure facility for
display of the price at the terminal of the trading members to enable the investors to access
the price on the screen to bring transparency to the delisting process.
Compulsory De-listing of Companies
The stock exchanges may de-list companies which have been suspended for a minimum
period of six months for non-compliance with the listing agreement. The stock exchanges
have to give adequate and wide public notice through newspapers and also give a show cause
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notice to a company. The exchange shall provide a time period of 15 days within which
representation may be made to the exchange by any person who may be aggrieved by the
proposed delisting. Where the securities of the company are de-listed by an exchange, the
promoter of the company shall be liable to compensate the security holders of the company
by paying them the fair value of the securities held by them and acquiring their securities,
subject to their option to remain security-holders with the company.
WDM Segment
In the WDM segment, all government securities, state development loans and treasury bills
are 'deemed' listed as and when they are issued. The other categories of securities are traded
either under the 'permitted to trade' category or under the 'listed' category. All eligible securities
whether publicly issued or privately placed can be made available for trading in the WDM
segment. Amongst other requirements, privately placed debt paper of banks, institutions
and corporates require an investment grade credit rating to be eligible for listing. The listing
requirements for securities on the WDM segment are presented in Table 3-4.
The growth of securities available for trading on the WDM segment is presented in Table 3-5.
As at end March 2006, 3177 securities with issued capital of Rs. 1494106 crore and a market
capitalisation of Rs. 1567574 crore were available for trading on the WDM segment.
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Table 3-1: Companies Listed/Permitted to Trade/Available
for Trading on the CM Segment
Month/Year No. of Companies No. of Companies No. of Companies Market
(end of period) Listed Permitted to Trade Available for Capitalisation
Trading* (Rs. crore)
Nov-94 0 300 300 292,637
Mar-95 135 543 678 363,350
Mar-96 422 847 1,269 401,459
Mar-97 550 934 1,484 419,367
Mar-98 612 745 1,357 481,503
Mar-99 648 609 1,254 491,175
Mar-00 720 479 1,152 1,020,426
Apr-00 725 473 1,145 846,391
May-00 733 431 1,109 790,478
Jun-00 741 423 1,109 852,554
Jul-00 747 410 1,094 746,402
Aug-00 751 410 1,089 794,516
Sep-00 758 379 1,070 730,350
Oct-00 764 377 1,067 707,121
Nov-00 767 376 1,070 764,177
Dec-00 775 350 1,050 760,391
Jan-01 778 348 1,050 807,641
Feb-01 782 320 1,026 789,600
Mar-01 785 320 1,029 657,847
Apr-01 790 319 1,031 653,720
May-01 789 318 1,030 592,437
Jun-01 790 292 1,001 569,797
Jul-01 785 294 994 574,260
Aug-01 786 293 994 575,242
Sep-01 788 293 987 509,105
Oct-01 789 292 986 535,846
Nov-01 788 268 956 581,386
Dec-01 788 268 956 552,908
Jan-02 794 199 893 563,683
Feb-02 791 198 889 621,523
Mar-02 793 197 890 636,861
Apr-02 800 173 865 649,551
May-02 798 172 863 631,609
Jun-02 799 170 848 659,991
Jul-02 799 163 841 608,643
Aug-02 799 161 839 632,618
Sep-02 801 161 840 599,603
Oct-02 803 119 803 606,788
Nov-02 805 118 788 645,388
Dec-02 809 116 788 672,862
Jan-03 814 112 789 572,277
Contd...
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Contd...
Table 3-1: Companies Listed/Permitted to Trade/Available
for Trading on the CM Segment
Month/Year No. of Companies No. of Companies No. of Companies Market
(end of period) Listed Permitted to Trade Available for Capitalisation
Trading* (Rs. crore)
Feb-03 818 107 788 581,985
Mar-03 818 107 788 537,133
Apr-03 830 78 771 530,630
May-03 847 61 769 612,030
Jun-03 853 52 769 678,550
Jul-03 865 44 774 719,144
Aug-03 873 35 775 836,650
Sep-03 883 27 774 863,480
Oct-03 887 26 776 926,747
Nov-03 891 23 777 979,541
Dec-03 897 23 779 1,167,028
Jan-04 904 22 786 1,116,150
Feb-04 907 21 788 1,110,954
Mar-04 909 18 787 1,120,976
Apr-04 918 18 795 1,171,828
May-04 928 16 804 950,494
Jun-04 940 12 813 979,700
Jul-04 929 12 815 1,066,087
Aug-04 936 9 820 1,143,075
Sep-04 945 7 824 1,227,550
Oct-04 950 6 828 1,253,825
Nov-04 954 6 831 1,446,292
Dec-04 957 6 832 1,579,161
Jan-05 958 5 833 1,557,444
Feb-05 964 4 837 1,614,597
Mar-05 970 1 839 1,585,585
Apr-05 973 1 836 1,517,908
May-05 977 1 842 1,654,995
Jun-05 987 1 854 1,727,502
Jul-05 999 1 868 1,848,740
Aug-05 1006 1 875 1,957,491
Sep-05 1016 1 883 2,098,263
Oct-05 1019 1 881 1,927,645
Nov-05 1025 -- 886 2,166,823
Dec-05 1036 -- 896 2,322,392
Jan-06 1043 -- 903 2,434,395
Feb-06 1051 -- 911 2,512,083
Mar-06 1061 -- 929 2,813,201
* Excluding suspended companies.
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Table 3-2: Listing Criteria for Companies on the CM Segment of NSE
Criteria Initial Public Offerings (IPOs) Companies listed on other exchanges
Paid-up Equity Capital (PUEC)/ PUEC Rs. 10 cr. and MC Rs. 25 cr. PUEC Rs. 10 cr. and MC Rs. 25 cr.
Market Capitalisation (MC) OR PUEC Rs. 25 cr. OR
MC Rs. 50 cr.
Dividend Record or Net worth -- Dividend paid in at least 2 out of
the last 3 years OR
Net worth Rs. 50 cr. OR
Distributable profits in at least 2 out of the last 3 years
Project Appraisal / Listing Project appraisal by specified agencies OR Listed on any other stock exchange for at least
The applicant should have working capital last three years OR
arrangements with a bank having a Networth of Project appraisal by specified agencies OR
not less than Rs.50 crores. "The applicant should have working capital arrangements
with a bank having a networth of at least Rs.50 crores.
Other Requirements (a) No disciplinar y action by other stock (a) Same as for IPOs.
exchanges/regulatory authority in past 3 yrs.
(b) Satisfactory redressal mechanism for investor (b) No negative net worth, No winding-up
grievances, distribution of shareholding and petition, and No reference to BIFR.
litigation record of the promoting company,
if any.
Note:
1. The criteria for IPOs shall also be applicable to companies which have come out with IPOs, but are not listed on NSE, provided they make an application for listing within 6 months of the date of closure of public issue.
2. Dividend track record / netwoth / project appraisal / listing are not applicable to Government Companies, PSUs, FIs, Nationalised Banks, Statutory Corporations, Banking Companies etc.who are otherwise governed by a regulatory
framework.
Explanations :
1. Paid up Equity Capital means post issue paid up equity capital.
2. In case of IPOs, market capitalisation is the product of the issue price and the post-issue number of equity shares. In case of listed companies it is the product of post issue number of equity shares and average of the weekly high
and low of the closing prices during last 12 months is used to calculate market capitalisation.
3. Net worth means paid-up equity capital + reserves excluding revaluation reserve - miscellaneous expenses not written off - negative balance in profit and loss account to the extent not set off.
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Table 3-3 : Shareholding Pattern at the end of December 2005 of Companies Listed on NSE
(In per cent)
Sectors Promoters' Holding Non-Pomoters' Holding
Institutional Investors Non - Institutional Investors
Persons Mutual Banks, FIs, FIIs Private Indian NRIs/ Any
Indian Foreign acting in Funds Ins. Cos Corporate Public OCBs Other
Promoters Promoters concert and UTI (Central/State) Bodies
1 Finance 37.08 0.99 3.07 2.60 5.35 18.42 4.14 15.72 0.92 11.71
2 Fmcg 9.89 3.13 0.23 11.84 17.59 12.81 2.10 14.73 0.80 26.90
3 Infrastructure 48.66 2.41 7.70 2.67 4.60 8.82 8.92 13.61 0.86 1.76
4 Information Technology 42.72 2.13 1.67 2.14 1.61 12.22 8.76 21.07 1.64 6.04
5 Manufacturing 13.23 2.14 0.62 0.95 2.02 1.91 72.31 5.70 0.37 0.74
6 Media & Entertainment 9.84 1.95 0.08 1.06 0.96 2.51 54.39 28.40 0.27 0.53
7 Miscellaneous 80.00 0.86 0.53 0.83 1.45 6.93 2.33 6.02 0.45 0.60
8 Petrochemicals 60.64 1.43 0.27 1.79 4.50 6.53 4.94 14.46 1.66 3.78
9 Pharmaceuticals 4.06 6.34 2.45 2.49 3.89 9.44 6.41 23.37 1.07 3.94
10 Services 44.80 4.66 0.90 2.51 3.37 16.73 4.96 9.66 0.83 11.57
11 Telecommunications 51.72 2.72 0.82 1.10 6.03 5.09 7.85 21.31 0.91 2.45
All Companies 24.78 2.11 0.93 1.57 2.94 5.11 49.38 9.55 0.58 3.06
Table 3-4: Eligibility Criteria for Securities on WDM Segment
Issuer Listing Criteria
Public Issue Private Placement
a. Public Sector Undertakings / Statutory Corporations
– Minimum 51% holding by Govt. As applicable to corporates
– Less than 51% holding by Govt. As applicable to corporates
b. Statutory Corporation/Local Bodies/Authorities
– Minimum 51% holding by Govt. – As applicable to PSUs – As applicable to corporates
– Less than 51% shareholding As applicable to corporates
c. Financial Institutions (SLR Bonds & Non-SLR Bonds) – Eligible – Credit Rating
d. Scheduled Commercial Banks (SCBs) – Net worth of Rs. 50 crore or above – Net worth of Rs. 50 crore or above
– Credit Rating
e. Infrastructure Companies Credit Rating
(Tax Exemption and recognition as infrastructure
company under related statutes/ regulations
f. Corporates – Minimum Paid-up capital of Rs. 10 crore, OR – Minimum Paid-up capital of Rs. 10 crore, OR
– Market Capitalisation of Rs. 25 crore – Market Capitalisation of Rs. 25 crore
(Net worth in case of unlisted companies) (Net worth in case of unlisted companies)
– Credit Rating
g. Mutual Funds SEBI registered Mutual Fund/Scheme having an investment objective
to invest predominantly in debt instruments.
Table 3-5: Securities Available for Trading on WDM Segment (as on March 31)
(Amount in Rs. crore)
As on March 31
Securities 2001 2002 2003 2004 2005 2006
Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
Government Securities 409 416,834 560 512,279 719 605,459 920 846,532 1,204 1,119,224 1,259 1,227,608
T-Bills 54 18,480 39 24,489 39 35,753 39 33,274 39 74,919 51 71,471
PSU Bonds 312 35,262 401 38,755 457 37,101 707 55,231 743 67,037 791 88,690
Institutional. Bonds 306 27,171 338 25,366 353 21,475 360 27,684 411 27,795 369 26,738
Bank Bonds 51 3,911 58 6,506 73 7,056 110 14,160 121 18,885 184 33,942
Corporate Bonds 343 14,790 337 17,656 306 16,269 455 30,591 563 39,360 512 43,863
Others 59 31,489 57 31,187 43 13,388 30 9,451 16 2,598 11 1,794
Total 1,534 547,937 1,790 656,238 1,990 736,502 2,621 1,016,923 3,097 1,349,817 3,177 1,494,106
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