What is Meant by Listed?
'Listed' means to be included and traded on a given stock or commodity exchange. Many exchanges have precise criteria that companies must meet to stay listed.
In India, companies must go for an initial public offer (IPO) to be listed on a stock exchange, such as the National Stock Exchange (NSE). The second best-known stock exchange in India is the Bombay Stock Exchange (BSE).
What are the Benefits of Getting Listed?
A Prime Marketplace
The sheer volume of trading activity ensures the exchange's impact cost is lower, which, in turn, reduces the investor's trading cost. The automated trading system of NSE provides accuracy and clarity in trade matching, which enhances the trust and visibility of our market to investors.
The trading network offers an unprecedented amount of knowledge about trade and post-trade. On the trading page, the best five buy and sell orders are shown, and the total number of shares available for purchase and sale is also shown. This allows the investor to know the market size.
Additionally, company reports, performance, corporate activities, etc. are available on the trading system.
NSE provides a trading platform, extending across the country's length and breadth. Investors from 191 centres can use the NSE Trading Network's trading facilities. The exchange makes use of the latest communications technology to provide instant access from any location.
What are the Criteria for Getting Listed?
The following are the criteria to get listed on the NSE for the capital market:
A) The applicant's paid-up equity capital is not less than Rs.10 crores, and the applicant's equity capitalisation is not less than Rs.25 crores.
Notes: - An account shall be taken of the post issue of paid-up equity capital for which listing is sought. - Capitalisation is the product of the issue price and the post issue number of equity shares.
B) The issuer shall adhere to the conditions preceding the listing of any rules and regulations arising from the inter-alia Securities Contracts (Regulations) Act 1956, Companies Act 1956, Securities and Exchange Board of India Act 1992, as well as any circulars, clarifications, and guidelines issued by the relevant authority under the statutes above.
C) Track record should be at least three years in one of the following: i. The applicant wanting to get listed ii. Promoters or the promoting company whether or not incorporated in India iii. Partnership business and eventually converted to a Corporation (not in operation for three years as a company) and sought to list.
The subsequently formed company would be eligible for listing, only if conditions are fulfilled.
D) The applicant interested in getting listed should satisfy the following additional conditions:
i. There must not be any disciplinary action by other stock exchanges and regulatory authorities in the last three years. ii. A redressal mechanism for investor grievance must be in place.