Listing and delisting of securities and listing agreement
SALU P KUMAR
• Admission of securities of an issuer to buying and selling
rights (dealings) on a stock exchange by way of a formal
• The securities may be of any public limited company,
Central or State Government, quasi governmental and
other financial institutions/corporations, municipalities,
• The main aim of admission to dealings on the exchange is
to give liquidity and also marketability to securities, as
also to give a mechanism for efficient control and
supervision of trading
OBJECTIVES OF LISTING
Three Main Objective of listing
• Provide liquidity to shares
• Mobilize savings for economic development
• protect interest of investors by ensuring full disclosures
by regulating dealings in securities
BENEFITS OF LISTING
1. A premier market place :I) provides marketability
II) It ensures consistency and transparency.
2. provides and improves goodwill of the company
3.Unprecedent reach:i) Stock exchange provides trading platform.
ii) Number of investors can avail of trading facilities.
4.Price detection:i) A listing facilitates companies to ascertain a price for their
5. Low cost capital:i) The primary gain of raising capital from the market.
ii) It avoids a number of intermediation expenses apparent in the
other forms of capital raising
DEMERITS OF LISTING
• Once the share are listed the company subject
themselves to various regulatory measures of
stock exchange SEBI.
• They have to disclose vital information to the
stock exchange ( competitors may get to know
• Leads to speculation.
• The company has to send notice for annual
general meeting to a large number of
shareholders, resulting in expenditure
FOR LARGE CAP
FOR SMALL CAP
Minimum post issued
paid up capital should be
Minimum issue size shall
be 10 crores
capitalization shall be 25
• Minimum post issued
paid up capital should be
• Minimum issue size shall
be 5 crores
• Minimum market
capitalization shall be 5
• Minimum no : of public
shareholders after the
issue shall be 1000.
Approval of Articles of Association.
- Rule 19(2)(a)
- unclaimed dividend
- common form
- share certificate.
Approval of draft prospectus.
- SEBI acknowledge letter
Submission of Application
Payment of listing fees and deposits of
Supporting documents required as follows:
Clauses of Articles of Association.
Application Letter for Listing.
Listing Application providing pre-issue details of securities.
Listing Application providing post-issue details of securities.
Checklist for supporting documents ( as applicable to the issuer)
Schedule of Distribution
Compliance of Listing Agreement and Laws
• Means removal of a particular securities for dealing in a
stock exchange. Hence the delisted securities can no
longer be traded in that stock exchange.
• 2 ways of delisting
- compulsory delisting
- voluntary delisting
• It is initiated by the stock exchange only for the default of
by the co. with terms of listing agreement.
• Norms are laid down by the SEBI guidelines , its non
compliance causes compulsory delisting
• Eg : Abhishek cements ltd , Asian tractors
- unfair trade practices
- non payment of listing fees
- violation of listing agreement
- non redressal of grievances.
• The co. or promoters can opt to remove its securities from
the stock exchange
• SEBI has given manner , procedure and guidelines for the
• Eg : India gypsum ltd , BST ltd , BPL engineering ltd
- unable to pay listing fees
- capital base is small
- business is sick , suspended or closed
- mergers , demergers , amalgamation
COMPLAINCE WITH LISTING
Under Listing agreement company undertakes following
• To provide facilities for prompt transfer, registration, subdivision and consolidation of securities
• To give proper notice of closure of transfer books and
• To furnish financial results on a quarterly basis
• Listing Department of the Exchange can take penal action
against the defaulting companies