Can Companies Feature Their Shares in Both BSE and NSE Concurrently? A Comprehensive Guide

Companies have the option to list their shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This dual listing strategy can offer investors a wider range of investment choices. However, it is not mandatory, and many companies choose to list on only one exchange.

Understanding the BSE and NSE:

Before embarking on a dual-listing journey, it's paramount to understand the unique features of these two exchanges. Both BSE and NSE have their own compliance requirements, market structure, trading rules, and investor base, which can cater to different segments of the investment market.

Eligibility for Listing on NSE:

The National Stock Exchange (NSE) welcomes the opportunity for companies to get listed by fulfilling certain eligibility criteria. The preliminary requirements for securities listing on NSE include:

Qualifications for Listing Initial Public Offerings (IPOs):

Paid-Up Capital: The paid-up equity capital of the applicant must be not less than ?10 crores.
Capitakzation: The capitalization of the applicant's equity must be not less than ?25 crores.

Conditions Precedent to Listing:

These include adherence to conditions set forth in:

Securities Contracts (Regulation) Act, 1956 Companies Act, 1956 Securities and Exchange Board of India Act, 1992 Any rules and/or regulations framed under these statutes Any circulars or clarifications issued by the appropriate authority under these statutes

Track Record Requirements:

Companies must demonstrate a minimum of three years track record in either:

The applicant seeking listing The promoters/promoting company (incorporated in or outside India) A partnership firm subsequently converted into a company, which was not in existence for three years until it converted to a company

Annual reports of the preceding three financial years need to be submitted, along with a certificate mentioning:

The company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR). The net worth of the company has not been wiped out by accumulated losses, resulting in a negative net worth. The company has not received any winding-up petition admitted by a court.

Disciplinary Record:

To ensure credibility and regulatory compliance, the company and its promoters/promoting company, along with group companies, must:

Have no disciplinary action by stock exchanges and regulatory authorities in the past three years. Not have material regulatory or disciplinary action from a stock exchange or regulatory authority over the past three years. Not have any material regulatory or disciplinary action from a stock exchange or regulatory authority in the past year.

Redressal Mechanism of Investor Grievances:

The redressal mechanism is a key aspect of securities listing. This includes:

The record of the applicant, promoters/promoting company, and group companies in redressal of investor grievances. The applicant's arrangements in place for servicing investors. The general approach and philosophy toward investor service and protection.

In cases of defaults in interest and principal payments to debenture/bond/fixed deposit holders by the applicant and its group companies, these may affect the listing approval. Auditors' certificates should be obtained in this regard. Securities may not be listed until all pending obligations are cleared.

Stock Holding Patterns:

The shareholding pattern on March 31 of the last three calendar years, separately showing promoters' and other group shareholdings, must be regulatory-compliant.

Litigation Details:

The company must clarify its litigation record, including the nature of litigation and its status, during the preceding three-year period, to the exchange.

Directorship Track Record:

Relevant disclosures must be made in the offer document regarding the status of criminal cases filed or investigations being undertaken against any directors who are charged with serious crimes like murder, rape, forgery, or economic offences.

Note:

In cases where a company approaches the exchange for listing within six months of an IPO, the securities may be considered eligible for listing if they were eligible at the time of the IPO. If a company approaches the exchange after six months from the IPO, the norms for existing listed companies apply, and market capitalization is computed based on the period from the IPO to the listing date.

Get Expert Guidance for Your Success:

For more detailed information and expert advice, visit the official NSE and BSE websites. Alternatively, you can subscribe to the services of CapitalVia Global Research Co., the leading investment advisory firm in India, to navigate the complexities of securities listing effectively.