5. listing of securities


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5. listing of securities

  1. 1. Introduction Listing refers to the admission of security of a public limited company on a recognized stock exchange for trading. Listing of securities offered to public becomes compulsory
  2. 2. Merits of listing Liquidity Best price Regular information Periodic reports Transferability Income tax benefit Wide publicity
  3. 3. Demerits Listed companies are subjected to various regulatory measures of the stock exchange and SEBI. Essential information has to be submitted by the listed companies to the stock exchanges. AGM and annual reports have to be sent to large no. of shareholders. Public offer that is itself an expensive exercise. But is prerequisite of the companies shares to be issued.
  4. 4. Qualification for listing Minimum issued capital :- 10 crores Payment of excess application money: 15 % after 30 days Listing on multiple exchanges: paid up capital 5 crores, compulsory listing on more than one exchange. The no. of shareholders: 5 for one lakh fresh and for existing its 10. Appointment of market maker: Articles of association: Cost of public issue
  5. 5. AdvertisementMinimum subscription Applying mode Public offer size
  6. 6. Listing procedure Preliminary discussion: discussion with stock exchanges Articles of association approval: it has to fulfill following requirements(I) Common form of transfer should be used(II) Once the shares are fully paid, they should be free from all lien.(III) The calls carried out in advance are entitled for interest but not dividends.(IV) Free dealing should not be restricted by any porovision(V) The company should comply with the section 205-A of companies act in the case of dividends.
  7. 7.  Draft prospectus approval: getting approval of draft prospectus is the essential pre-requisite for the security to be listed. Before finalizing the draft prospectus the company authorities should hold a discussion with stock exchange authorities. The prospectus should clearly state the following.(I) The name of regional stock exchange and any other stock exchange where it intends to list securities.(II) Date of opening of issue and closing(III) Open for Minimum 3 working days and maximum of 10 days.
  8. 8.  Listing application: any company when it intends to offer shares to the public through prospectus, should make an application to the stock exchange where the share is to be listed. A no. of certificates are to be submitted with application and are as follows:(I) Three certified copies of MOA and debenture trust deed.(II) Copies of prospectus, offer for sale made during last 5 years and circulars and advertisement regarding offer made during last five years.
  9. 9. (III) Copy of every letter, report, balance sheet, valuation, contract, court order or any other document given in the prospectus.(IV) Certified copies of underwriting, brokerage, vendors, promoter’s selling agents and sales managers agreement.(V) Certified copies of the service agreement of secretaries, treasures, managing director, technical directors, general manager and manager.(VI) Particulars regarding the material contract, technical advice and collaborations, concession and similar other documents.
  10. 10. (VII) Copies of agreements with IFC, industrial credit and investment corporation and such other bodies.(VIII) Details regarding the re-organisations, reconstruction, amalgamation and details of companies activities.
  11. 11.  Listing agreement regarding projection of profitability Listing agreement regarding cash flow statement
  12. 12. listing fees Particulars amount Initial Listing Fees 25,000 Upto Rs. 1 Crore 10,000 Above Rs. 1 Crore and upto Rs.5 Crores 15,000 Above Rs. 5 Crore and upto Rs.10 Crores 25,000 Above Rs. 10 Crore and upto Rs.20 Crores 45,000 Above Rs. 20 Crore and upto Rs.30 Crores 70,000 Above Rs. 30 Crore and upto Rs.40 Crores 75,000 Above Rs. 40 Crore and upto Rs.50 Crores 80,000 Above Rs. 50 Crores and upto Rs.100 Crores 1,30,000
  13. 13. Particulars amountAbove Rs. 100 Crore and upto Rs.150 Crores 1,50,000Above Rs. 150 Crore and upto Rs.200 Crores 1,80,000Above Rs. 200 Crore and upto Rs.250 Crores 2,05,000Above Rs. 250 Crore and upto Rs.300 Crores 2,30,000Above Rs. 300 Crore and upto Rs.350 Crores 2,55,000Above Rs. 350 Crore and upto Rs.400 Crores 2,80,000Above Rs. 400 Crore and upto Rs.450 Crores 3,25,000Above Rs. 450 Crore and upto Rs.500 Crores 3,75,000