Listing of a company
This query is : Resolved
22 January 2011
Can a public limited formed on 1/1/2011 i.e. a newly formed company be listed on the bombay stock exchange ?
if yes that what is the procedur of the same ??
Kindly do reply.
if yes that what is the procedur of the same ??
Kindly do reply.
22 January 2011
If the company brings public issue, then they can list in stock exchange.
Message likes :
1 times
03 February 2011
are'nt there any criteria for turnover and networth for atleast three years ??
02 August 2024
Yes, a newly formed public limited company can be listed on the Bombay Stock Exchange (BSE). However, there are specific criteria and procedures that the company must follow to get listed. The listing process involves several regulatory and compliance requirements. Here's a detailed overview:
### **Criteria for Listing:**
**1. Minimum Requirements for Listing:**
- **Track Record:**
- Generally, the stock exchanges have a requirement for a company to have a minimum track record. For the main board of BSE, this typically includes:
- **Three Years Track Record:** Companies often need to demonstrate a track record of operations for at least three years. However, there are provisions for new companies through the SME platform or for certain types of issues.
- **Turnover and Net Worth:** Companies might be required to meet specific criteria related to turnover, net worth, and profitability. For instance:
- **Net Tangible Assets:** The company should have a net tangible asset value of a certain amount.
- **Net Worth:** A specified minimum net worth is required.
- **Profitability:** The company should be profitable over a certain number of years, or it should demonstrate potential for profitability.
**2. SME Platform:**
- **Alternative Listing:** If the company does not meet the criteria for the main board, it may explore listing on the SME (Small and Medium Enterprises) platform. The SME platform has different, often less stringent, requirements:
- **Track Record:** Generally, companies need to demonstrate a track record of operations, but the requirements might be less stringent than the main board.
- **Net Worth and Turnover:** Criteria are typically more relaxed, focusing more on the growth potential and the business model.
### **Procedure for Listing:**
**1. Appoint Advisors:**
- **Merchant Banker:** Engage a Merchant Banker or Lead Manager who will assist with the listing process.
- **Legal Advisors:** Appoint legal advisors to ensure compliance with legal and regulatory requirements.
- **Auditors:** Engage auditors to prepare the necessary financial statements and reports.
**2. Due Diligence:**
- Conduct thorough due diligence to ensure compliance with all regulatory requirements and to prepare the necessary documentation.
**3. Prepare Listing Application:**
- **Drafting Prospectus:** Prepare a detailed prospectus or offer document that includes information about the company’s financials, operations, management, and risk factors.
- **Financial Statements:** Ensure the financial statements are audited and comply with the required standards.
**4. Submit Application to Stock Exchange:**
- **Application:** Submit the listing application along with the prospectus and other required documents to the Bombay Stock Exchange (BSE).
- **Approval:** Obtain approval from the stock exchange. The BSE will review the application and may request additional information or clarifications.
**5. Regulatory Approval:**
- **SEBI Approval:** Ensure compliance with the Securities and Exchange Board of India (SEBI) regulations. The company might need to get approvals from SEBI, especially if the public issue involves an offer of shares.
**6. Public Issue (If Applicable):**
- **Initial Public Offering (IPO):** If the company is raising capital through an IPO, it needs to conduct the IPO process, which includes marketing the issue, booking applications, and allotting shares to investors.
**7. Listing Agreement:**
- **Execute Listing Agreement:** Once the application is approved, sign the listing agreement with the BSE, agreeing to comply with the exchange’s rules and regulations.
**8. Final Steps:**
- **Listing:** After receiving the final approval, the company’s shares will be listed on the BSE, and trading will commence.
### **Summary:**
While a newly formed public limited company can be listed on the BSE, it generally needs to meet specific criteria regarding track record, turnover, net worth, and profitability. If the company does not meet these criteria, it may consider listing on the SME platform. The listing process involves preparing a detailed prospectus, submitting an application, obtaining approvals from the stock exchange and SEBI, and signing a listing agreement.
### **Criteria for Listing:**
**1. Minimum Requirements for Listing:**
- **Track Record:**
- Generally, the stock exchanges have a requirement for a company to have a minimum track record. For the main board of BSE, this typically includes:
- **Three Years Track Record:** Companies often need to demonstrate a track record of operations for at least three years. However, there are provisions for new companies through the SME platform or for certain types of issues.
- **Turnover and Net Worth:** Companies might be required to meet specific criteria related to turnover, net worth, and profitability. For instance:
- **Net Tangible Assets:** The company should have a net tangible asset value of a certain amount.
- **Net Worth:** A specified minimum net worth is required.
- **Profitability:** The company should be profitable over a certain number of years, or it should demonstrate potential for profitability.
**2. SME Platform:**
- **Alternative Listing:** If the company does not meet the criteria for the main board, it may explore listing on the SME (Small and Medium Enterprises) platform. The SME platform has different, often less stringent, requirements:
- **Track Record:** Generally, companies need to demonstrate a track record of operations, but the requirements might be less stringent than the main board.
- **Net Worth and Turnover:** Criteria are typically more relaxed, focusing more on the growth potential and the business model.
### **Procedure for Listing:**
**1. Appoint Advisors:**
- **Merchant Banker:** Engage a Merchant Banker or Lead Manager who will assist with the listing process.
- **Legal Advisors:** Appoint legal advisors to ensure compliance with legal and regulatory requirements.
- **Auditors:** Engage auditors to prepare the necessary financial statements and reports.
**2. Due Diligence:**
- Conduct thorough due diligence to ensure compliance with all regulatory requirements and to prepare the necessary documentation.
**3. Prepare Listing Application:**
- **Drafting Prospectus:** Prepare a detailed prospectus or offer document that includes information about the company’s financials, operations, management, and risk factors.
- **Financial Statements:** Ensure the financial statements are audited and comply with the required standards.
**4. Submit Application to Stock Exchange:**
- **Application:** Submit the listing application along with the prospectus and other required documents to the Bombay Stock Exchange (BSE).
- **Approval:** Obtain approval from the stock exchange. The BSE will review the application and may request additional information or clarifications.
**5. Regulatory Approval:**
- **SEBI Approval:** Ensure compliance with the Securities and Exchange Board of India (SEBI) regulations. The company might need to get approvals from SEBI, especially if the public issue involves an offer of shares.
**6. Public Issue (If Applicable):**
- **Initial Public Offering (IPO):** If the company is raising capital through an IPO, it needs to conduct the IPO process, which includes marketing the issue, booking applications, and allotting shares to investors.
**7. Listing Agreement:**
- **Execute Listing Agreement:** Once the application is approved, sign the listing agreement with the BSE, agreeing to comply with the exchange’s rules and regulations.
**8. Final Steps:**
- **Listing:** After receiving the final approval, the company’s shares will be listed on the BSE, and trading will commence.
### **Summary:**
While a newly formed public limited company can be listed on the BSE, it generally needs to meet specific criteria regarding track record, turnover, net worth, and profitability. If the company does not meet these criteria, it may consider listing on the SME platform. The listing process involves preparing a detailed prospectus, submitting an application, obtaining approvals from the stock exchange and SEBI, and signing a listing agreement.
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