Overview: Listing a Company in Stock Market

The procedure through which an unlisted firm, a start-up, or an early-stage corporation can be listed on the NSE for trade/sale of its securities to the general public in the primary market is known as an initial public offering (IPO). IPOs were typically used to expand a company's main business activities or to launch new business activities or projects, with the result being a dilution of promoter shares.

Stock

In finance, stock (sometimes known as capital stock) refers to all of the shares that make up a corporation's or company's ownership. (The term "stocks" is sometimes used to refer to shares, especially in American English.) A single share of stock represents fractional ownership of the company in relation to its total number of shares. This usually entitles the shareholder (stockholder) to a certain percentage of the company's earnings, proceeds from asset liquidation (after discharge of all senior claims such as secured and unsecured debt), or voting power, which is usually divided proportionally to the amount of money each stockholder has invested. Specified classes of stock, for example, may be issued without voting rights, with improved voting rights, or with a certain priority to earn profits or liquidation proceeds before or after other classes of shareholders.

NSE (National Stock Exchange)

The National Stock Exchange of India Limited (NSE), headquartered in Mumbai, Maharashtra, is India's largest stock exchange. It is owned by a number of major financial institutions, banks, and insurance firms. The National Stock Market (NSE) was founded in 1992 as the country's first dematerialized electronic exchange. The NSE was the first exchange in the country to offer a contemporary, fully automated screen-based electronic trading system that allowed investors from all over the country to trade with ease. NSE's Managing Director and Chief Executive Officer is Vikram Limaye.

As of August 2021, the National Stock Exchange had a total market capitalization of around US$3.4 trillion, making it the world's tenth-largest stock exchange. The NSE's flagship index, the NIFTY 50, is a 50-stock index that is widely recognized as a gauge of the Indian capital market by investors in India and around the world. NSE created the NIFTY 50 index in 1996. However, according to Vaidyanathan (2016), the stock exchanges in India account for only roughly 4% of the Indian economy Or GDP.

The Listing Process at the NSE (National Stock Exchange)

Securities may be listed in either the Capital Market or the Wholesale Debt Market. Before we go into the NSE Listing procedure, let's have a look at the eligibility requirements.

Requirement for Basic Eligibility

• Companies Act 1956 or Companies Act 2013 must be used to register a company as a public company.
• The company should be at least three years old, with two years of positive net worth.
• The paid-up capital after the IPO should not exceed 25 Crores.
• Required documents for Listing at NSE.
• A profile of the company's promoters and management.
• Details of the project undertaken and company profile.
• Certified copies of the last three years' annual reports.
• Copies of the Draft Offer Document that have been certified.
• Certified documents of the company's Memorandum and Articles of Association.
• 5-year company plan including balance sheet, PL, and cashflow projections

Memorandum and AOA Submission

It necessitates the submission of the Issuer's Articles of Association if it wants to list its securities on the NSE. If any of the stipulations in the AOA are inconsistent with company practise, they must be removed through AOA revisions.

Approval of the Proposal Draft

The draft prospectus and obligatory application forms must be filed with the National Stock Exchange by the Issuer. The draft prospectus is written in line with the legislation indicated above, among other things. The draft prospectus will be reviewed by National Stock Exchange solely for the purpose of checking, and any approval given by National Stock Exchange in relation of the draft prospectus should not be construed as approval under any laws, rules, or other guidelines, etc. SEBI should also receive a letter from the company stating SEBI's remarks on the draft prospectus or letter of offer.

Application Submission

Issuers that wish to list their existing or new securities on NSE must submit an application for admission of their securities to NSE in the appropriate forms and pay any applicable fees.

The Advantages of an NSE Listing

The following are some of the advantages of being listed on a national stock exchange:

Large Marketplace

The NSE is a mixed-product exchange that trades in equities, debt, and derivatives. The complete workflow was created using cutting-edge technology and includes trading, clearing, and settlement services. Investors can get market data feeds and education from the National Stock Exchange.

Operations on a large scale

The NSE systems can execute a high number of orders in real-time, and the risk management system is of world-class quality. NSE frameworks as a whole are faster and more automated.

Exceptional Visibility

The NSE trading system is open to the public, and the trading system displays the best five buy and sell orders at all times. This informs the investor about the current market trend. The company's impending data, such as financial reports and announcements, are listed on the National Stock Exchange trading platform.

The largest stock exchange

The National Stock Exchange is the world's fourth largest stock exchange.

Extraordinary reach

NSE is the most popular stock exchange in India, with a network that stretches across the country. It currently has over 180K terminals, all of which are supported by VSAT.

Guaranteed Settlement

NSE assumes a 100 percent settlement guarantee, removing any trading clearing risks for you.

For announcements, a high-level broadcast facility

The NSE has created a technique for broadcasting corporate announcements on the NEAT system. The notification of a merger, takeover, book closure, right issue, or bonus issue is widely distributed throughout the country, limiting the scope of price manipulation or misuse.

Business data for publicly traded firms

All companies listed on the NSE have access to statistics, trends, and industry analysis provided by the National Stock Exchange.

Committed Investor service centers

To address investor concerns, the NSE has established customer service centers that are open 24 hours a day, seven days a week.

Conclusion

The National Stock Exchange of India is the country's most important stock exchange. It was the country's first exchange to offer a completely automated screen-based trading system.