CORPORATE AND

SECURITIES LAW

CC 30105- 22/01/2024
Course coordinator : Amitava Banerjee
IICA -MCA assessed eligible Independent Director
FCS, LLB, M. Com, B. Com, Dip in Business Laws (NUJS, Kolkata)
Former Consultant, NFCG (PPP by MCA, Govt of India)
LISTING OF SECURITIES – BENEFITS -NSE
Comprehensive marketplace
NSE offers comprehensive coverage of the Indian capital markets across asset classes, including
equity, fixed income and derivative securities. It has a fully-integrated business model comprising
exchange listings, trading services, clearing and settlement services, indices, market data feeds,
technology solutions and financial education offerings.
Scale of operations
The scale and breadth of NSE's products and services, its sustained leadership positions across
multiple asset classes in India it's leadership positions in trading volumes help to attract additional
participants to the exchange, which in turn results in more efficient price discovery.
NSE's trading technology and risk management framework offers faster and automated execution
of orders, which contributes to reduced impact costs for large trade orders.
Visibility
The trading system provides high level of trade and post-trade information. The best 5 buy and
sell orders are displayed on the trading system and the total number of securities available for
buying and selling is also displayed. This helps the investor to know the depth of the market.
Further, corporate announcements, results, corporate actions etc. are also available on the trading
system.

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LISTING OF SECURITIES – BENEFITS
Largest exchange
NSE is the leading stock exchange in India and the fourth largest in the world by equity trading
volume in 2015, according to WFE.
Unprecedented reach
NSE has a pan-India, high-speed network, which supports more than 181,524 terminals through
VSAT-based connectivity, leased line terrestrial-based connectivity and multiprotocol label
switching transactions on the exchange, as of September 30, 2016.
Settlement Guarantee
NSE Clearing assumes the credit risk of each party to the trade, which is the risk that a clearing
member defaults on its obligations in respect of the trade.
Broadcast facility for corporate announcements
The NSE network is used to disseminate information and company announcements across the
country. Important information regarding the company is announced to the market through the
Broadcast Mode on the NEAT System as well as disseminated through the NSE website. Corporate
developments such as financial results, book closure, announcements of bonus, rights, takeover,
mergers etc. are disseminated across the country thus minimizing scope for price manipulation or
misuse.

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LISTING OF SECURITIES – BENEFITS

Trade statistics for listed companies

Listed companies are provided with monthly trade statistics for all the securities of the company
listed on the Exchange.
Investor service centers
Twenty-Four investor-service centers opened by NSE across the country cater to the needs of
investors.

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 LISTING OF SECURITIES – SNAPSHOT
1.Company files DRHP/DP with Stock Exchange
2.Exchange uploads the DRHP/DP on the Website of the Exchange
3.Company has to file an application on NEAPS and attach the relevant documents as per the Checklist
specified by the Exchange
4.Exchange does preliminary check & verifies the application and seeks replies to queries ( if any)
5.Exchange issues in-principle approval to the Company
6.Company has an intention to open the Issue, within 12 months, post the SEBI approval
7.One day prior, to the issue open, the company has to submit the 1% security deposit to Designated Stock
Exchange (DSE)
8.One day prior, to the issue open, the company allocates the shares to the Anchor investor (if any)
9.Issue can be open for minimum of 3 days and maximum of 10 days
10.Issue Close (T Day – Working day)
11.On T+2 working day the Company submits the documents as per the checklist of the Exchange
12.On T+3 working day basis of allotment is carried out at DSE
13.On T+4 working day company submits the Listing Documents to the Exchange.
14.On T+5 working day company submit Credit Confirmation from the Depository i.e. dematerialised shares to
the allottee’s account & Exchange will issue a circular to the Market for listing of shares with effect from T+6
working day
15.On T+6 working day Company gets listed on the Exchange
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PUBLIC ISSUE AND LISTING OF SECURITIES
Qualifications for listing Initial Public Offerings (IPO) are as below:

1.Paid up Capital

The paid-up equity capital of the applicant shall not be less than 10 crores * and the capitalization of
the applicant's equity shall not be less than 25 crores**

For this purpose, the post issue paid up equity capital for which listing is sought shall be taken into
account.

capitalisation will be the product of the issue price and the post issue number of equity shares.

In respect of the requirement of paid-up capital and market capitalisation, the issuers shall be
required to include, in the disclaimer clause of the Exchange required to put in the offer document,
that in the event of the market capitalisation (Product of issue price and the post issue number of
shares) requirement of the Exchange not being met, the securities would not be listed on the
Exchange.

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 PUBLIC ISSUE AND LISTING OF SECURITIES
2.Conditions Precedent to Listing:
The Issuer shall have adhered to conditions precedent to listing as emerging from inter-alia from Securities
Contracts (Regulations) Act 1956, Companies Act 1956/2013, Securities and Exchange Board of India Act
1992, any rules and/or regulations framed under foregoing statutes, as also any circular, clarifications,
guidelines issued by the appropriate authority under foregoing statutes.

3. At least three years track record of either:

•The applicant seeking listing; or
•The promoters****/promoting company, incorporated in or outside India or
•Partnership firm and subsequently converted into a Company (not in existence as a Company for three
years) and approaches the Exchange for listing.

•For this purpose, the applicant or the promoting company shall submit annual reports of three preceding
financial years to NSE and also provide a certificate to the Exchange in respect of the following:

1. That the company has not referred to the Board of Industrial & Financial Reconstruction (BIFR) &/OR
No proceedings have been admitted under Insolvency and Bankruptcy Code against the issuer and
Promoting companies.
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 PUBLIC ISSUE AND LISTING OF SECURITIES
•The company has not received any winding up petition admitted by a NCLT
•The net worth of the company should be positive.
•Promoters mean one or more persons with minimum 3 years of experience of each of them in the same line
of business and shall be holding at least 20% of the post issue equity share capital individually or severally.

4. Redressal Mechanism of Investor grievance

1.Details of pending investor grievances against Issuer, listed subsidiaries and top 5 listed group companies by
Market Cap.
2.Arrangements or mechanism evolved for redressal of investor grievances including through SEBI
Complaints Redress System.

5.Defaults in payment
Defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders by the
applicant, promoters/promoting company(ies), group companies, Subsidiary Companies shall also be
considered while evaluating a company's application for listing. The securities of the applicant company may
not be listed till such time it has cleared all pending obligations relating to the payment of interest and/or
principal.

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 LISTING OF SECURITIES – EXISTING COMPANY
1. Net Worth

The net worth of the applicant company shall be more than ₹ INR 75 Cr* in each of the 3 preceding
financial years. The Company shall submit a certificate from the statutory auditors in respect of net worth as
stipulated above*.

2. Dividend The applicant company has paid dividend in at least 2 out of last 3 financial years immediately
preceding the year in which listing application has been made
OR
EBITDA Positive EBDITA in each of the three preceding financial years.
OR
Market Capitalization
• Average Market capitalization of the company to be more than INR 1,000 Cr for a 6 (six) months period
prior to the date on which the listing application has been made.*
•*The threshold of market capitalization is computed as the average daily market capitalization for 6 (six)
months period preceding the date of application

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 LISTING OF SECURITIES – EXISTING COMPANY
3. At least three years track record – same as IPO

4. Disclosure of Disciplinary Action : The Company should have made disclosures for all material Litigation(s)
/ dispute(s) / regulatory action(s) to the stock exchanges where its shares are listed in adequate and timely
manner. (Including promoters/promoting company(ies), group companies, director of the applicant company)

5. Redressal mechanism of Investor grievance

SEBI registered SCORES ID

▪ Applicant company, promoters/promoting company(ies), group companies, companies promoted by the

promoters/promoting company(ies) (listed entity) should have pending investor grievance (if any) not be
more than 30 days.
▪ Defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders by
the applicant company, promoters/promoting company(ies), group companies, companies promoted by the
promoters/promoting company(ies) shall also be considered while evaluating a company’s application for
listing.
▪ The auditor’s certificate shall also be obtained in this regard. In case of defaults in such payments, the
securities of the applicant company may not be listed till such time it has cleared all pending obligations
relating to the payment of interest and/or principal.

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 LISTING OF SECURITIES – EXISTING COMPANY

6.Public Shareholders: Total number of public shareholders on the last day of preceding quarter from date of
application should be at least 1000.

7.Details of Litigation: The applicant company, promoters/promoting company(ies), group companies,

companies promoted by the promoters/promoting company(ies) litigation record, the nature of litigation, status
of litigation during the preceding three years need to be clarified to the exchange.

8.Rejection cooling off period :The application of the applicant company should not have been rejected in last
6 months.

9.Audit qualification: The applicant company should not have audit qualification w.r.t. going concern and
adverse opinion or disclaimer of opinion pertaining to financials.

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 LISTING OF SECURITIES – EXISTING COMPANY
10.Other Conditions: The applicant company should have been listed on any other recognized Stock Exchange
for at least last three years or listed on the exchange having nationwide trading terminals for at least six
months.

1.Minimum average daily turnover during last 6 months (value) - Rs. 10 lakhs.

2.Minimum average daily number of trades during last 6 months (count) – 50

3.Cooling period of two months from the date the security has come out of trade-to-trade category or any
other surveillance action by other exchanges where the security has been actively listed.

4.Securities of the company should be trading above face value during six months preceding the date of
application.

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 LISTING OF SECURITIES – Social Stock Exchange
▪ The Social Stock Exchange segment on NSE provides Social Enterprises (Non-profit organizations
(NPOs) and For-profit enterprises (FPEs)) engaged in eligible activities a unique opportunity to register
itself and raise funds on a recognized exchange platform.

Eligibility Criteria - A. Predominance (Any one of the following)

•At least 67% of the immediately preceding 3-year average of revenues comes from providing
eligible activities to members of the target population
or
•At least 67% of the immediately preceding 3-year average of expenditures has been incurred for
providing eligible activities to members of the target population
or
•Members of the target population to whom the eligible activities have been provided constitute at
least 67% of the immediately preceding 3-year average of the total customer base/beneficiaries

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LISTING OF SECURITIES – Social Stock Exchange
Eligibility Activities

▪ eradicating hunger, poverty, malnutrition and inequality

▪ promoting health care including mental healthcare, sanitation and making available safe drinking
water
▪ promoting education, employability and livelihoods
▪ promoting gender equality, empowerment of women and LGBTQIA+ communities
▪ ensuring environmental sustainability, addressing climate change including mitigation and adaptation,
forest and wildlife conservation
▪ protection of national heritage, art and culture
▪ training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports
supporting incubators of Social Enterprises
▪ promoting livelihoods for rural and urban poor including enhancing income of small and marginal
farmers and workers in the non-farm sector
▪ slum area development, affordable housing and other interventions to build sustainable and resilient
cities

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LISTING OF SECURITIES – Social Stock Exchange
Benefits of Registration/Listing

•Improved market access – An SSE will facilitate a common and a structured meeting ground between
Social Enterprises and investors/donors with inbuilt regulation for providing sanctity and accountability of
finances.
•Synergy between investors and investee in social aims - In view of flexibility of investments and capital
that would be available on an SSE, the canvas of choice would be much wider allowing investors and
investees with similar missions and visions to connect seamlessly
•Performance based philanthropy - Performance of the enterprises listed on an SSE would be monitored
thus it will instill a culture of performance (Social return) driven philanthropy.
•Zero Listing and Admission cost – SSE saves cost for both issuer and investor/donor by charging
negligible fees for registration and listing.
•Additional avenue for Social Enterprises - Central and State governments till date have the biggest onus
of achieving sustainable development goals. SSE will provide an alternate avenue for raising funds
thereby encouraging new and existing social enterprises.

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