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Eligibility Criteria for Equity


An applicant who desires listing of its securities with NSE must fulfill the following pre-requisites.

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**

* Explanation 1

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

** Explanation 2

For this purpose, 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.

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.Atleast 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. The Company subsequently formed would be considered for listing only on fulfillment of conditions stipulated by SEBI in this regard.

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:

  • 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.
  • The company has not received any winding up petition admitted by a NCLT
  • The net worth of the company should be positive. (Provided this criteria shall not be applicable to companies whose proposed issue size is more than Rs.500 crores)

    [*Net Worth – as defined under SEBI (Issue of Capital and Disclosure Requirements) Regulations , 2018.

****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.The applicant desirous of listing its securities should satisfy the exchange on the following:

  • Redressal Mechanism of Investor grievance

The points of consideration are:

  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.

  • 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.

    Note:
    a) In case a company approaches the Exchange for listing within six months of an IPO, the securities may be considered as eligible for listing if they were otherwise eligible for listing at the time of the IPO. If the company approaches the Exchange for listing after six months of an IPO, the norms for existing listed companies may be applied and market capitalisation be computed based on the period from the IPO to the time of listing.

Download Checklist for New Listing

  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 networth as stipulated above*.
      * Explanation 1: - Net worth Should be calculated as per the SEBI ICDR Regulations, 2018 and any amendment thereof.
  2. a. 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
    • b. EBITDA
    • Positive EBDITA in each of the three preceding financial years.
      OR
    • c. 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.
  3. Atleast three years track record of either:

    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:

    • The applicant company 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.
    • 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.  
    • The company has not received any winding up petition admitted by a NCLT
    • **** 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. 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)


      Redressal mechanism of Investor grievance
      The applicant desirous of listing its securities should satisfy the exchange on the following: 

    • a. SEBI registered SCORES ID
    • b. 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.
    • c. 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.
    • Public Shareholders
      • Total number of public shareholders on the last day of preceding quarter from date of application should be at least 1000.
    • 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.
    • Rejection cooling off period
      • The application of the applicant company should not have been rejected in last 6 months.
    • 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.
    • Other Conditions:
      1. 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.
      2. Minimum average daily turnover during last 6 months (value) - Rs. 10 lakhs
      3. Minimum average daily number of trades during last 6 months (count) – 50
      4. 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.
      5. Securities of the company should be trading above face value during six months preceding the date of application.

Note:
Kindly note that the application submitted to the Exchange for listing does not construe NSE's listing approval. The company shall use NSE’s reference regarding listing only after the Exchange grants listing approval to the company. The Exchange reserves the right to reject application on any of the following grounds:

  • The Applicant does not conform to the eligibility requirements set out herein.
  • The application is not complete in all respects and/or does not conform to the requirements set out herein.
  • The application does not contain such additional information as may be required by NSE; and/or
  • The application is false and/or misleading in any manner.
  • Any other reason as NSE may deem fit.

Download Checklist for SME Listed

Eligibility criteria for companies listed on the SME platform of other nationwide stock exchange, and desirous for listing on the mainboard of National Stock Exchange of India Ltd. (NSEIL)

  1. Paid up Capital & Market Capitalisation
    The paid up equity capital of the applicant shall not be less than 10 crores* and the capitalisation of the applicant's equity shall not be less than 25 crores**

    * Explanation 1
    For this purpose, the post issue paid up equity capital for which migration is sought shall be taken into account.
    ** Explanation 2
    For this purpose, capitalisation will be the product of the price (average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during 3 months preceding the application date) and the post issue number of equity shares.
     
  2. Atleast three years track record of either
    1. the applicant seeking listing; or
    2. the promoters****/promoting company, incorporated in or outside India or
    3. Proprietary / Partnership firm and subsequently converted into a Company (not in existence as a Company for three years)
      ****Promoters mean one or more persons with minimum 3 years of experience in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally
      The company/entity should have positive cash accruals (earnings before interest, depreciation and tax) from operations for at least any 2 financial years out of 3 financial year preceding the application.
       
  3. The applicant should have been listed on SME Platform for at least 2 Years.
     
  4. Independent Due diligence Certificate:
    The applicant shall submit to the Exchange an independent due diligence certificate not older than 3 months from the date of application.
    The independent due diligence certificate from Independent Peer reviewed Auditors / SEBI registered Credit rating agencies shall inter-alia cover the below aspects:
    • Brief snapshot of Entity.
    • Profile of Promoter, Management & Ownership Structure. (To include details of litigation cases, serious criminal cases etc in the last one year)
    • Business Profile Analysis, Operations Overview with a peer analysis and Project Details (If any).
    • Due Diligence with Lender, Auditors, Customer and Suppliers.
    • Profitability Analysis & Debt track record (period 3 yrs.)
    • Status of utilization of IPO proceeds or any funds raised thereafter
    • Compliance track record (including LODR, ICDR, PIT, SAST)
    • Investor grievance redressal mechanism
  1. Certificate to the Exchange in respect of the following:
    • 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.
    • The net worth* of the company should be positive
    • The company has not received any winding up petition admitted by a NCLT

    *Net Worth – as defined under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018

  1. The applicant company desirous of listing its securities should also satisfy the Exchange on the following:
    • 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.
    • 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.
    • Redressal mechanism of Investor grievance
    • PAN and DIN no. of Director(s) of the Company
    • Change in Control of a Company/ Utilisation of funds raised from public

Note:-

SME companies that have already migrated to the main board of any nationwide stock exchange and desirous to list on main board on NSE shall have meet the criteria specified for listing of securities of existing companies.

Kindly note that the application submitted to the Exchange for listing does not construe NSE's listing approval. The company shall use NSE’s reference regarding listing only after the Exchange grants listing approval to the company. The Exchange reserves the right to reject application on any of the following grounds:

  1. The Applicant does not conform to the eligibility requirements set out herein.
  2. The application is not complete in all respects and/or does not conform to the requirements set out herein.
  3. The application does not contain such additional information as may be required by NSE; and/or
  4. The application is false and/or misleading in any manner.
  5. Any other reason as NSE may deem fit.

The above criteria is applicable w.e.f January 21, 2021

Download Checklist for Eligibility (.zip)

  1. Networth
    • The net worth of the applicant company shall be more than INR 10 Crs* 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*. 
      * Explanation 1:- Net worth Should be calculated as per the SEBI ICDR Regulations, 2018 and any amendment thereof. 
    • Paid up Capital
      • The paid-up equity capital of the applicant company shall not be less than 10 crores* in each of the three preceding financial years*

        For this purpose, the existing paid up equity capital as well as the paid-up equity capital after the proposed issue for which listing is sought shall be taken into account. 
      • 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 

    • Atleast three years track record of either:
      • The applicant company seeking listing; or
      • The promoters***/promoting company, incorporated in or outside India
        OR
      • The company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR)
      • The networth of the company has not been wiped out by the accumulated losses resulting in a negative networth.
      • The company has not received any winding up petition admitted by a court.

        *** 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.

Information Memorandum

  • The Company shall prepare the Information Memorandum* and upload same on its website at the time of filing application with the Exchange.

Redressal mechanism of Investor grievance
The applicant desirous of listing its securities should satisfy the exchange on the following:

  • 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.

Distribution of shareholding

  • The applicant company/promoting company(ies) shareholding pattern on March 31 of preceding three years separately showing promoters and other groups’ shareholding pattern should be as per the regulatory requirements. Total number of public shareholders on the date of application should be at least 500
  • 100% promoter holding and 50% of public holding should be in compulsory demat mode. 

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.

Track Record of Director(s) of the Company

  • In respect of the track record of the directors, relevant disclosures may be provided upon in the application regarding the status of criminal cases filed or nature of the investigation being undertaken with regard to alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of issuer have or has been charge-sheeted with serious crimes.

Change in Control of a Company/Utilisation of funds raised from public

  • In the event of new promoters taking over listed companies which results in change in management and/or companies utilizing the funds raised through public issue for the purposes other than those mentioned in the offer document, such companies shall make additional disclosures (as required by the Exchange) with regard to change in control of a company and utilization of funds raised from public.

rejection cooling off period 

  • The application of the applicant company should not have been rejected in last 6 months.

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

Company Website

  • The applicant company should mandatorily have functional and updated website 

Note:

*Information Memorandum shall be prepared as specified in Part E of Schedule VI of SEBI ICDR, Regulations 2018 and the amendments, thereof. The Exchange shall host the same on its website for a minimum period of 7 working days before granting listing permission.

Kindly note that the application submitted to the Exchange for listing does not construe NSE's listing approval. The company shall use NSE’s reference regarding listing only after the Exchange grants listing approval to the company. The Exchange reserves the right to reject application on any of the following grounds:

  1. The Applicant does not conform to the eligibility requirements set out herein.
  2. The application is not complete in all respects and/or does not conform to the requirements set out herein.
  3. The application does not contain such additional information as may be required by NSE; and/or
  4. The application is false and/or misleading in any manner.
  5. Any other reason as NSE may deem fit.
Updated on: 04/03/2021
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