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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 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 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, 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:

  • The company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR).
  • The net worth of the company has not been wiped out by the accumulated losses resulting in a negative net worth. (Provided this criteria shall not be applicable to companies whose proposed issue size is not less than Rs.500 crores)
  • 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.

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

  • No disciplinary action by other stock exchanges and regulatory authorities in past three years

There shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past three years against the applicant company. In respect of promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) of the applicant company, there shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past one year.

  • Redressal Mechanism of Investor grievance

The points of consideration are:

  1. The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) track record in redressal of investor grievances
  2. The applicant's arrangements envisaged are in place for servicing its investor.
  3. The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) general approach and philosophy to the issue of investor service and protection
  4. 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, 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's/promoting company(ies) shareholding pattern on March 31 of last three calendar years separately showing promoters and other groups' shareholding pattern should be as per the regulatory requirements.

  • Details of Litigation

The applicant, 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 period 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 insisted upon in the offer document 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 like murder, rape, forgery, economic offences etc.
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: Networth means Paid up equity capital + Free Reserves i.e. reserve, the utilization of which is not restricted in any manner may be taken into consideration excluding revaluation reserves – Miscellaneous Expenses not written off – Balance in profit and loss account to the extent not set off.

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: 

    1. The applicant company seeking listing; or
    2. The promoters****/promoting company, incorporated in or outside India
    3. The company has not been referred to Board for Industrial and Financial Reconstruction (BIFR) / admitted in Insolvency and Bankruptcy Code (IBC)
    4. 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.

4.No Disciplinary action 

There shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past 3 years against the applicant company. In respect of promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies), director of the applicant company, there shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past one year.

Redressal mechanism of Investor grievance

  1. SEBI registered SCORES ID
  2. 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.
  3. 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.
  •  
  1. The applicant company should have been listed on any other recognized Stock Exchange for atleast last three years or listed on the exchange having nationwide trading terminals for at least one year.
  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 on 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:

The eligibility criteria shall not be applicable to State or Central Public Sector Undertakings (PSU) including PSU Banks.

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.

  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. August 14, 2019.

Download Checklist for Eligibility

Pursuant to the Exchange’s circular no. 216/2017 dated March 09, 2017, the diluted eligibility criteria for listing companies exclusively listed on de-recognised/non-operational stock exchanges is as follows:

1.Paid up Capital & Net Worth

  • The paid-up equity capital of the applicant company shall not be less than  10 crores* in each of the three preceding financial years* 

AND

  • The net worth of the applicant company shall not be less than  10 crores** in each of the three preceding financial years*

* Explanation 1

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.

** Explanation 2

Networth means Paid up equity capital + Free Reserves i.e. reserve, the utilization of which is not restricted in any manner may be taken into consideration excluding revaluation reserves – Miscellaneous Expenses not written off – Balance in profit and loss account to the extent not set off. 

2.Atleast three years track record of either: 

  • The applicant company seeking listing; or
  • The promoters***/promoting company, incorporated in or outside India

OR 

For this purpose, the applicant company 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 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.

3.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

4.The applicant company desirous of listing its securities should also satisfy the Exchange on the following:

No Disciplinary action has been taken by other stock exchanges and regulatory authorities in the past three years

The applicant company, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) have not been in default in payment of listing fees to any stock exchange in the last three years or has not been delisted or suspended in the past and has not been proceeded against by SEBI or other regulatory authorities in connection with investor related issues or otherwise.

Redressal mechanism of Investor grievance

The points of consideration are:

  • The applicant company, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) track record in redressal of investor grievances
  • The applicant’s arrangements envisaged are in place for servicing its investor
  • The applicant company, promoters’/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) general approach and philosophy to the issue of investor service and protection
  • 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.
  • Mandatory SEBI registered SCORES ID. Pending investor grievance should not be more than 30 days.


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 insisted upon in the offer document 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 utilising 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 utilisation of funds raised from public.


Withdrawal\rejection cooling off period

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


Company Website

  • The applicant company should mandatorily have functional and updated website.


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.

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 above criteria is applicable w.e.f March 10, 2017.

Updated on: 17/01/2020
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