Comparative Study NSE - BSE

A
SUMMER TRAINING PROJECT

ON
LISTING PROCEDURE & ITS ANALYSIS:

A COMPARATIVE STUDY BETWEEN
NSE & BSE

Submitted in Partial Fulfillment of
MASTER OF BUSINESS ADMINISTRATION (MBA) PROGRAMME
( U.P. Technical University, Lucknow)
(2007-2009)
Submitted To: Submitted By

Mr. Satish Matta Bhawesh Mishra
Faculty Guide MBA (3rd Sem)
LIMT, Gr. Noida Roll No. 0717270022
LLOYD INSTITUTE OF MANAGEMENT &

TECHNOLOGY
Plot no.11, Knowledge Park-2, Greater Noida.UP-
201306
1
INDEX
CONTENTS PAGE NO.
 ACKNOWLEDGEMENT 4
 OBJECTIVE 5
 PREFACE 7
 METHODOLOGY 8
 NATIONAL STOCK EXCHANGE 9
 ABOUT NSE 10
 NSE MILESTONES 11
 CORPORATE STRUCTURE 17
 NSE GROUP 31
 NSE TECHNOLOGY 36
 EQUITIES 39
 LISTING 40
 LISTING PROCEDURE ON NSE 41
 ELIGIBILITY CRITERIA FOR LISTING ON NSE 55
2
 BOMBAY STOCK EXCHANGE 72
 ABOUT BSE 73
 LISTING OF SECURITIES ON BSE 86
 ANALYSIS AND INTERPRETATION 103
 LISTING BENEFITS 112
 CONCLUSION 117
 FINDINGS 118
 LIMITATIONS 119
 BIBLIOGRAPHY 120
3
ACKNOWLEDGEMENT
A work without the blessing and the guidance of experienced is always half done
and unsatisfactory. The task of completing this project needs knowledge,
experience & guidance of the prominent person as mentioned in the subject line.
My abundant and most sincere thanks goes to the honorable guide for providing
me with the necessary facilities to carry out the project successfully.
I would also like to thank Mr. Satish Matta, Faculty Guide, LIMT, Gr. Noida for
familiarizing me with the concepts of management, which were of great help to
complete this project.
BHAWESH MISHRA
MBA (3RD SEM)
Roll No.: 0717270022
4
OBJECTIVE
The main objective of this project is to gain an insight of National Stock Exchange
& Bombay Stock Exchange towards the listing procedure and to explore the
benefits of listing on the stock exchanges with a comparative study.
SCOPE
• The project would help a company to make familiar with listing
procedure on NSE & BSE.
• The project would also tell the benefits of listing on the stock exchanges
for raising funds through equity share capital.
5
METHODOLOGY
The methodology used for the implementation of the assigned project is based
on secondary data & with the help of custom type pie explosion chart.
LIMITATIONS
The limitations of this project arise from the time period assigned to me in this
project. Since I had to work only for two months.
This project merely tells about the listing procedure of equities on NSE & BSE.
6
PREFACE
“Learning Categories You, and practicing on that learning specialize you “ .
The importance of any academic courses would gain advantage and the acceptance
of the true form, only through practical experiences. Hence it is quite necessary to
put theories as into task. This is made possible with the summer training at any of
the companies under the expert guidance of a competent person.
The students are required to submit a report on the work done and knowledge
gained during this period. The report is evaluated and marks awarded as per the
contents in the report.
I was asked to work on project “Comparison of listing procedure between NSE &
BSE.”
7
METHODOLOGY
The methodology used for the implementation of the assigned
project is based on secondary data and with the help of custom type
pie explosion chart.
Research design for the descriptive study is of exploratory type
and the forms is given to discover the possible measure by detailed
analysis this report also based on descriptive research because it
provide the detailed knowledge about the BSE and NSE and its listing
procedure.
Secondary data is to be used in the research, have been
collected from various magazines, news paper, web sites and other
source.
Research design: descriptive type and analytical type
Data collection method : secondary data collect method.
8
NATIONAL STOCK EXCHANGE
9
ABOUT NSE
The National Stock Exchange (NSE) is India's leading stock exchange covering
various cities and towns across the country. NSE was set up by leading
institutions to provide a modern, fully automated screen-based trading system
with national reach. The Exchange has brought about unparalleled transparency,
speed & efficiency, safety and market integrity. It has set up facilities that serve
as a model for the securities industry in terms of systems, practices and
procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms
of microstructure, market practices and trading volumes. The market today uses
state-of-art information technology to provide an efficient and transparent trading,
clearing and settlement mechanism, and has witnessed several innovations in
products & services viz. demutualisation of stock exchange governance, screen
based trading, compression of settlement cycles, dematerialisation and electronic
transfer of securities, securities lending and borrowing, professionalisation of
trading members, fine-tuned risk management systems, emergence of clearing
corporations to assume counterparty risks, market of debt and derivative
instruments and intensive use of information technology.
10
NSE MILESTONES
November 1992 Incorporation

April 1993 Recognition as a stock exchange
May 1993 Formulation of business plan
June 1994 Wholesale Debt Market segment goes live
November 1994 Capital Market (Equities) segment goes live
March 1995 Establishment of Investor Grievance Cell
April 1995 Establishment of NSCCL, the first Clearing Corporation
Introduction of centralised insurance cover for all trading
June 1995
members
July 1995 Establishment of Investor Protection Fund
October 1995 Became largest stock exchange in the country
April 1996 Commencement of clearing and settlement by NSCCL
April 1996 Launch of S&P CNX Nifty
June 1996 Establishment of Settlement Guarantee Fund
Setting up of National Securities Depository Limited, first
November 1996
depository in India, co-promoted by NSE
November 1996 Best IT Usage award by Computer Society of India
Commencement of trading/settlement in dematerialised
December 1996
securities
December 1996 Dataquest award for Top IT User
December 1996 Launch of CNX Nifty Junior
February 1997 Regional clearing facility goes live
November 1997 Best IT Usage award by Computer Society of India
Promotion of joint venture, India Index Services & Products
May 1998
Limited (IISL)
May 1998 Launch of NSE's Web-site: www.nse.co.in
July 1998 Launch of NSE's Certification Programme in Financial Market
August 1998 CYBER CORPORATE OF THE YEAR 1998 award
11
February 1999 Launch of Automated Lending and Borrowing Mechanism
April 1999 CHIP Web Award by CHIP magazine
October 1999 Setting up of NSE.IT
January 2000 Launch of NSE Research Initiative
February 2000 Commencement of Internet Trading
June 2000 Commencement of Derivatives Trading (Index Futures)
September 2000 Launch of 'Zero Coupon Yield Curve'
Launch of Broker Plaza by Dotex International, a joint venture
November 2000
between NSE.IT Ltd. and i-flex Solutions Ltd.
December 2000 Commencement of WAP trading
June 2001 Commencement of trading in Index Options
July 2001 Commencement of trading in Options on Individual Securities
November 2001 Commencement of trading in Futures on Individual Securities
December 2001 Launch of NSE VaR for Government Securities
January 2002 Launch of Exchange Traded Funds (ETFs)
NSE wins the Wharton-Infosys Business Transformation
May 2002
Award in the Organization-wide Transformation category
October 2002 Launch of NSE Government Securities Index
January 2003 Commencement of trading in Retail Debt Market
June 2003 Launch of Interest Rate Futures
August 2003 Launch of Futures & options in CNXIT Index
June 2004 Launch of STP Interoperability
August 2004 Launch of NSE’s electronic interface for listed companies
June 2005 Launch of Futures & options in BANK Nifty Index
12
THE ORGANISATION
The National Stock Exchange of India Limited has genesis in the report of the
High Powered Study Group on Establishment of New Stock Exchanges, which
recommended promotion of a National Stock Exchange by financial institutions
(FIs) to provide access to investors from all across the country on an equal
footing. Based on the recommendations, NSE was promoted by leading Financial
Institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company unlike other stock exchanges in the
country.
On its recognition as a stock exchange under the Securities Contracts
(Regulation) Act, 1956 in April 1993, NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market
(Equities) segment commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000.
Mission
NSE's mission is setting the agenda for change in the securities markets in India.
The NSE was set-up with the main objectives of:
• establishing a nation-wide trading facility for equities, debt instruments and
hybrids,
• ensuring equal access to investors all over the country through an
appropriate communication network,

13
• providing a fair, efficient and transparent securities market to investors
using electronic trading systems,
• enabling shorter settlement cycles and book entry settlements systems,
and
• meeting the current international standards of securities markets.
The standards set by NSE in terms of market practices and technology have
become industry benchmarks and are being emulated by other market
participants. NSE is more than a mere market facilitator. It's that force which is
guiding the industry towards new horizons and greater opportunities.
Logo
The logo of the NSE symbolises a single nationwide securities trading facility
ensuring equal and fair access to investors, trading members and issuers all over
the country. The initials of the Exchange viz., N, S and E have been etched on
the logo and are distinctly visible. The logo symbolises use of state of the art
information technology and satellite connectivity to bring about the change within
the securities industry. The logo symbolises vibrancy and unleashing of creative
energy to constantly bring about change through innovation
PROMOTERS
14
NSE has been promoted by leading financial institutions, banks, insurance
companies and other financial intermediaries:
1. Industrial Development Bank of India Limited
2. Industrial Finance Corporation of India Limited
3. Life Insurance Corporation of India
4. State Bank of India
5. ICICI Bank Limited
6. IL & FS Trust Company Limited
7. Stock Holding Corporation of India Limited
8. SBI Capital Markets Limited
9. The Administrator of the Specified Undertaking of Unit Trust of India
10. Bank of Baroda
11. Canara Bank
12. General Insurance Corporation of India
13. National Insurance Company Limited
14. The New India Assurance Company Limited
15. The Oriental Insurance Company Limited
16. United India Insurance Company Limited
17. Punjab National Bank
18. Oriental Bank of Commerce
19. Corporation Bank
20. Indian Bank
21. Union Bank of India
15
CORPORATE STRUCTURE
NSE is one of the first de-mutualised stock exchanges in the country, where the
ownership and management of the Exchange is completely divorced from the
right to trade on it. Though the impetus for its establishment came from policy
makers in the country, it has been set up as a public limited company, owned by
the leading institutional investors in the country.
From day one, NSE has adopted the form of a demutualised exchange - the
ownership, management and trading is in the hands of three different sets of
people. NSE is owned by a set of leading financial institutions, banks, insurance
companies and other financial intermediaries and is managed by professionals,
who do not directly or indirectly trade on the Exchange. This has completely
eliminated any conflict of interest and helped NSE in aggressively pursuing
policies and practices within a public interest framework.
The NSE model however, does not preclude, but in fact accommodates
involvement, support and contribution of trading members in a variety of ways. Its
Board comprises of senior executives from promoter institutions, eminent
professionals in the fields of law, economics, accountancy, finance, taxation, etc,
public representatives, nominees of SEBI and one full time executive of the
Exchange.
16
While the Board deals with broad policy issues, decisions relating to market
operations are delegated by the Board to various committees constituted by it.
Such committees include representatives from trading members, professionals,
the public and the management. The day-to-day management of the Exchange is
delegated to the Managing Director who is supported by a team of professional
staff.
17
BOARD OF DIRECTORS
Chairman Mr. S. B. Mathur
Administrator of the Specified
Undertaking of
Unit Trust of India
Managing Director Mr. Ravi Narain
National Stock Exchange of India
Ltd.
Deputy Managing Director Ms. Chitra Ramkrishna
National Stock Exchange of India
Ltd.
18
Directors
Mr. S. P. Chhajed Mr. R. P. Chitale
Partner Managing Partner
M/s. Chhajed & Doshi M/s. M.P.Chitale & Co.
Chartered Accountants Chartered Accountants
Mr. S. H. Khan Prof. (Dr.) K.R.S.Murthy
Chairman Professor and Former Director
Feedback First Urban Infrastructure Indian Institute of Management,
Development Comp. Ltd. Bangalore
Mr. Anand G. Mahindra Mr. N.S. Kannan
Vice Chairman & Managing Director Chief Financial Officer & Treasurer
Mahindra & Mahindra Ltd ICICI Bank Ltd
Mr. Indrajit Gupta Mr. A. P. Kurian
Managing Director & CEO Chairman
SBI Capital Markets Ltd. Association of Mutual Funds in India
Mr. Justice M.L. Pendse (Retd.) Mr. Ravi Parthasarathy
Former Chief Justice of Karnataka Chairman & Managing Director
High Court Infrastructure Leasing & Financial
and Judge of Bombay High Court Services Ltd
Mr. R. N. Bhardwaj Mr. M. Raghavendra
Chairman Ex-General Manager
Life Insurance Corporation of India General Insurance Corporation of India
Mr. S.Venkiteswaran
Dr. R. H. Patil Sr. Advocate &
Chairman Mr. Y. H. Malegam
The Clearing Corporation of India Ltd. Chartered Accountant
19
COMMITTEES
The Exchange has constituted various committees to advise it on areas such as
good market practices, settlement procedures, risk containment systems etc.
These committees are manned by industry professionals, trading members,
Exchange staff as also representatives from the market regulator.
• Executive Committee
• Committee On Trade Related Issues (COTI)
• Advisory Committee - Listing of Securities
Executive Committee
Objective: To manage the day-to-day operations of the Exchange Composition:
1. Mr. Ravi Narain Chairman
Managing Director
National Stock Exchange of India Ltd.
2. Mr. Mukesh Kansal Trading Member
Managing Director
M/s. K & A Securities (P) Ltd.
3. Mr. Hemang Raja Trading Member
Managing Director
20
M/s IL&FS Investsmart Ltd.
4. Mr. Shailesh Saraf Trading Member
Wholetime Director
M/s. Dynamic Equities Pvt. Ltd.
5. Mr. C.Parthasarathy Trading Member
Director
M/s. Karvy Stock Broking Ltd.
6. Mr. R. P. Chitale Public
Managing Partner Representative
M/s. M. P. Chitale & Co. Chartered
Accountants
7. Mr. Y. H. Malegam Public
Chartered Accountant Representative
8. Mr. S. Venkiteswaran Public
Sr. Advocate Representative
9. Ms. Chitra Ramkrishna Other Nominee
Deputy Managing Director
10. Mr. P. M. Venkatasubramanian Other Nominee
Ex-Managing Director, GIC
11. Mr. N.S.Kannan Other Nominee
Chief Financial Officer & Treasurer
ICICI Bank Limited
For Futures & Options Segment
21
1. Mr. Ravi Narain Chairman
Managing Director
2. Mr. Shitin D Desai Trading Member
Executive Vice Chairman
M/s. DSP Merrill Lynch Ltd.
3. Mr. Vineet Bhatnagar Trading Member
Managing Director
M/s Refco-Sify Securities India (Pvt.) Ltd.
4. Mr. D.C.Anjaria Public
Director Representative
International Finance Solutions Pvt. Ltd.
5. Mr. Shailesh Haribhakti Public
Partner Representative
M/s. Haribhakti & Co.
6. Prof. V. Ravi Anshuman Public
Indian Institute of Management Representative
Bangalore
7. Mr. M. Raghavendra Other Nominee
Ex-General Manager
General Insurance Corporation of India
8. Ms. Chitra Ramkrishna Other Nominee
Deputy Managing Director
9. Mr. M. L. Soneji Other Nominee
22
Director (Operations & Surveillance)
23
COMMITTEE ON TRADE ISSUES (COTI)
Objective: To provide guidance on trade related issues which crop up during the
day-to-day functioning of the Exchange Composition:
Mr. Atul Kumar Mr. S.Ramasubramanian
Managing Director Partner
Practical Financial Services Pvt. Ltd. M/s. Venkatraman & Co
(Chairman of the committee)

. Mr. Dhiraj Single Mr. Dikul Patel
Head of Market Operations Executive Director
ASK Raymond James Financial JK Securities Pvt. Limited
Services (I) Ltd.

Mr. Shreekant Phumbhra Mr. G V Nageswara Rao
Proprietor Managing Director
Shreekant Phumbhra IDBI Capital Market Services Ltd.

Mr. Ashok Kakkar Mr. Ketan H. Marwadi
Wholetime Director Managing Director
Vivek Financial Focus Ltd. Marwadi Shares & Finance Pvt.
Ltd.
Mr.K. Ravindra Babu Mr. Ravindra Kumar Agrawal
Managing Director Wholetime Director
Zen Securities Ltd. Shri Parashram Holdings P. Ltd.
ADVISORY COMMITTEE - LISTING OF SECURITIES

24
Objective: To advise NSE on
• The suitability of the Companies for listing on the Exchange within the
parameters set out by the listing agreement
• To ensure that the applicant company has complied with all the conditions
set out in the listing agreement as well as other formalities, SEBI
regulations, etc.
• Systems and procedures to be adopted for listing of securities
Composition:
1 Mr. N Ganga Ram
Former Executive Director, Industrial Development Bank of India

2 Mr. Uday Kotak
Executive Vice Chairman and Managing Director,
Kotak Mahindra Bank Ltd.

3 Mr. M R Mondkar
Chairman, Mondkar Computers Pvt. Ltd.

4 Mr. S Ramadorai
Chief Executive Officer, Tata Consultancy Services

5 Mr. Prithvi Haldea
Managing Director, Prime Database
Praxis Cons. & Information Services Pvt. Ltd.

6 Mr. Prakash Karnik
Director-Asia, Electrapartners Asia Pvt. Ltd.

7 Mr. S.V. Prasad
Chief Executive Officer, Birla Sunlife Mutual Fund
25
8 Mr. Pradip P. Shah
Chairman, Indasia Fund Advisors Pvt. Ltd.

9 Mr. Vimal Bhandari
Executive Director, Infrastructure Leasing & Financial Services
Ltd.
10 Mr. J. Ravichandran
Company Secretary & Sr.Vice President

11. Mrs. Chitra Ramkrishna
Deputy Managing Director, Head of Listing
26
Management Team (Personal Staff)
Mr. Ravi Narain MANAGING DIRECTOR & CHIEF EXECUTIVE
OFFICER
Ms. Chitra Ramkrishna Deputy Managing Director
Mr. J Ravichandran Director
Legal & Secretarial , Inspection, Finance &
Accounts
Mr. M L Soneji Director
Capital Market (Trade & Surveillance), F&O
(Trade & Surveillance), WDM (Trade &
Surveillance), IPO and Investigation
Mr. R Sundararaman Vice President
NSCCL - F&O Clearing, Risk Management &
Collaterals
Mr. Yatrik R Vin Vice President
Finance & Accounts
Mr. A Sebastin Asst. Vice President
Risk Management
Mr. Arup Mukherjee Asst. Vice President
NCFM & Economic Analysis & policy
Mr. C. N. Upadhyay Asst. Vice President
Inspection
Mr. D Satish Kumar Asst. Vice President
Legal
27
Mr. Dhruvkumar Patil Asst. Vice President
Arbitration, Defaulters Section & Investor
Grievances
Mr. Mahesh Haldipur Asst. Vice President
Premises
Mr. Narendra Kumar Asst. Vice President
Ahlawat NSCCL - Development
Mr. Nayan Mehta Asst. Vice President
Finance & Accounts
Mr. Suresh Narayan Asst. Vice President
India Index Services & Products Ltd.
Mr. R Jayakumar Asst. Vice President
Secretarial
Mr. R Nanda Kumar Asst. Vice President
Development
Mr. Ravi Varanasi Asst. Vice President
Investigation & Surveillance
Ms. T S Jagadharini Asst. Vice President
Listing & Membership
28
29
NSE Group
NSCCL
IISL NSE.IT
NSE
DotEx Intl. Ltd. NSDL
30
National Securities Clearing Corporation Ltd. (NSCCL)
The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned
subsidiary of NSE, was incorporated in August 1995. It was set up to bring and
sustain confidence in clearing and settlement of securities; to promote and
maintain, short and consistent settlement cycles; to provide counter-party risk
guarantee, and to operate a tight risk containment system. NSCCL commenced
clearing operations in April 1996.
NSCCL carries out the clearing and settlement of the trades executed in the
Equities and Derivatives segments and operates Subsidiary General Ledger
(SGL) for settlement of trades in government securities. It assumes the counter-
party risk of each member and guarantees financial settlement. It also
undertakes settlement of transactions on other stock exchanges like, the Over
the Counter Exchange of India.
NSCCL has successfully brought about an up-gradation of the clearing and
settlement procedures and has brought Indian financial markets in line with
international markets.
31
NSE.IT Ltd.
NSE.IT, a 100% subsidiary of National Stock Exchange of India Limited (NSE), is
the information technology arm of the largest stock exchange of the country. A
leading edge technology user, NSE houses state-of-the-art infrastructure and
skills. NSE.IT possesses the wealth of expertise acquired in the last six years by
running the trading and clearing infrastructure of largest stock exchange of the
country. NSE.IT is uniquely positioned to provide products, services and
solutions for the securities industry. There has been a long felt need for top-of-
the-line products, services and solutions in the area of trading, broker front-end
and back-office, clearing and settlement, web-based trading, risk management,
treasury management, asset liability management, banking, insurance etc.
NSE.IT's expertise in these areas is the primary focus. The company also plans
to provide consultancy and implementation services in the areas of Data
Warehousing, Business Continuity Plans, Stratus Mainframe Facility
Management, Site Maintenance and Backups, Real Time Market Analysis &
Financial News over NSE-Net, etc.
NSE.IT is an Export Oriented Unit with STP and plans to go global for various IT
services in due course. In the near future the company plans to release new
products for Broker Back-office Operations and enhance NeatXS / Neat iXS to
support Straight Through Processing on the net.
32
India Index Services & Products Ltd. (IISL)
India Index Services and Products Limited (IISL), a joint venture between NSE
and CRISIL Ltd. (formerly the Credit Rating Information Services of India
Limited), was set up in May 1998 to provide a variety of indices and index related
services and products for the Indian capital markets. It has a consulting and
licensing agreement with Standard and Poor's (S&P), the world's leading provider
of investible equity indices, for co-branding equity indices.
IISL provides a broad range of services, products and professional index
services. It maintains over 80 equity indices comprising broad-based benchmark
indices, sectoral indices and customised indices. Many investment and risk
management products based on IISL indices have been developed in the recent
past, within India and abroad. These include index based derivatives traded on
NSE and Singapore Exchange (SIMEX) and a number of index funds
National Securities Depository Ltd. (NSDL)
In order to solve the myriad problems associated with trading in physical
securities, NSE joined hands with the Industrial Development Bank of India (IDBI)
and the Unit Trust of India (UTI) to promote dematerialisation of securities.
33
Together they set up National Securities Depository Limited (NSDL), the first
depository in India.
NSDL commenced operations in November 1996 and has since established a
national infrastructure of international standard to handle trading and settlement
in dematerialised form and thus completely eliminated the risks to investors
associated with fake/bad/stolen paper.
DotEx International Limited
DotEx was formed to provide world-class internet trading platforms which allows
members of NSE to offer online trading facilities to their customers. Members of
NSE can service a larger clientele by using the automated risk management
features and thus increase volumes. Investors get comprehensive and updated
information necessary to trade, along with a single-click convenience to fulfil their
obligations. The initial offering of DotEx is DotEx Plaza where multiple market
participants such as members of NSE, depository participants and banks can
offer web-based services to their customers. As a neutral aggregator and
infrastructure provider, DotEx offers choice and convenience to investors. DotEx
was a joint venture between i-flex Solutions Ltd. and NSE.IT Ltd. Recently NSE
has taken over the shareholding and management of DotEx.
DotEx products may be classified under the following broad categories:
• Equity Trading Module
• F&O Trading Module.
34
NSE Technology
Across the globe, developments in information, communication and network
technologies have created paradigm shifts in the securities market operations.
Technology has enabled organisations to build new sources of competitive
advantage, bring about innovations in products and services, and to provide for
new business opportunities. Stock exchanges all over the world have realised the
potential of IT and have moved over to electronic trading systems, which are
cheaper, have wider reach and provide a better mechanism for trade and post
trade execution.
NSE believes that technology will continue to provide the necessary impetus for
the organisation to retain its competitive edge and ensure timeliness and
satisfaction in customer service. In recognition of the fact that technology will
continue to redefine the shape of the securities industry, NSE stresses on
innovation and sustained investment in technology to remain ahead of
competition. NSE's IT set-up is the largest by any company in India. It uses
satellite communication technology to energise participation from around 400
cities spread all over the country. In the recent past, capacity enhancement
measures were taken up in regard to the trading systems so as to effectively
meet the requirements of increased users and associated trading loads. With
upgradation of trading hardware, NSE can handle up to 1 million trades per day.
NSE has also put in place NIBIS (NSE's Internet Based Information System) for
on-line real-time dissemination of trading information over the internet. In order to
35
capitalise on in-house expertise in technology, NSE set up a separate company,
NSE.IT, in October 1999. This is expected to provide a platform for taking up new
IT assignments both within and outside India and attaining global exposure.
NEAT is a state-of-the-art client server based application. At the server end, all
trading information is stored in an in-memory database to achieve minimum
response time and maximum system availability for users. The trading server
software runs on a fault tolerant STRATUS main frame computer while the client
software runs under Windows on PCs.
The telecommunications network uses X.25 protocol and is the backbone of the
automated trading system. Each trading member trades on the NSE with other
members through a PC located in the trading member's office, anywhere in India.
The trading members on the Wholesale Debt Market segment are linked to the
central computer at the NSE through dedicated 64Kbps leased lines and VSAT
terminals. These leased lines are multiplexed using dedicated 2 Mbps, optical-
fibre links. The WDM participants connect to the trading system through dial-up
links.
The Exchange uses powerful RISC -based UNIX servers, procured from Digital
and HP for the back office processing. The latest software platforms like
ORACLE 7 RDBMS, GUPTA - SQL/ORACLE FORMS 4.5 Front - Ends, etc. have
been used for the Exchange applications. The Exchange currently manages its
data centre operations, system and database administration, design and
36
development of in-house systems and design and implementation of
telecommunication solutions.
NSE is one of the largest interactive VSAT based stock exchanges in the world.
Today it supports more than 3000 VSATs and is expected to grow to more than
4000 VSATs in the next year. The NSE- network is the largest private wide area
network in the country and the first extended C- Band VSAT network in the world.
Currently more than 9000 users are trading on the real time-online NSE
application. There are over 15 large computer systems which include non-stop
fault-tolerant computers and high end UNIX servers, operational under one roof
to support the NSE applications. This coupled with the nation wide VSAT network
makes NSE the country's largest Information Technology user.
In an ongoing effort to improve NSE's infrastructure, a corporate network has
been implemented, connecting all the offices at Mumbai, Delhi, Calcutta and
Chennai. This corporate network enables speedy inter-office communications
and data and voice connectivity between offices.
In keeping with the current trend, NSE has gone online on the Internet. Apart
from having a 2mbps link to VSNL and our own domain for internal browsing and
e-mail purposes, we have also set up our own Web site. Currently, NSE is
displaying its live stock quotes on the web site (www.nseindia.com) which are
updated online.
37
Equities
NSE started trading in the equities segment (Capital Market segment) on
November 3, 1994 and within a short span of 1 year became the largest
exchange in India in terms of volumes transacted.
Trading volumes in the equity segment have grown rapidly with average daily
turnover increasing from Rs.17 crores during 1994-95 to Rs.4,328 crores during
2003-04. During the year 2003-04, NSE reported a turnover of Rs.1,099,535
crores in the equities segment accounting for 68.60% of the total Indian securities
market.
The Equities section provides you with an insight into the equities segment of
NSE and also provides real-time quotes and statistics of the equities market. In-
depth information regarding listing of securities, trading systems & processes,
clearing and settlement, risk management, trading statistics etc are available
here.
38
LISTING
Listing means admission of securities of an issuer to trading privileges on a stock
exchange through a formal agreement. The prime objective of admission to
dealings on the Exchange is to provide liquidity and marketability to securities, as
also to provide a mechanism for effective management of trading.
Listing on NSE provides qualifying companies with the broadest access to
investors, the greatest market depth and liquidity, cost-effective access to capital,
the highest visibility, the fairest pricing, and investor benefits. NSE trading
terminals are now situated in various cities and towns across the length and
breath of India.
Securities listed on the Exchange are required to fulfill the eligibility criteria for
listing. Various types of securities of a company are traded under a unique
symbol and different series.
NSE plays an important role in helping an Indian companies access equity
capital, by providing a liquid and well-regulated market. NSE has about 800
companies listed representing the length, breadth and diversity of the Indian
economy which includes from hi-tech to heavy industry, software, refinery, public
sector units, infrastructure, and financial services. Listing on NSE raises a
company’s profile among investors in India and abroad. Trade data is distributed
worldwide through various news-vending agencies.
39
More importantly, each and every NSE listed company is required to satisfy
stringent financial, public distribution and management requirements. High listing
standards foster investor confidence and also bring credibility into the markets.
NSE lists securities in its Capital Market (Equities) segment and its Wholesale
Debt Market segment
LISTING PROCEDURE
An Issuer has to take various steps prior to making an application for listing its
securities on the NSE. These steps are essential to ensure the compliance of
certain requirements by the Issuer before listing its securities on the NSE. The
various steps to be taken include:
1. Initial Discussions
2. Approval of Memorandum and Articles of Association
3. Approval of draft prospectus
4. Submission of Application
5. Listing conditions and requirements
40
LISTING PROCEDURE
Initial Discussions
Authorised persons of the concerned Issuer should hold discussions with NSE
personnel regarding various requirements to be fulfilled by the Issuer for listing its
securities. The discussions should particularly cover the qualifications of the
Issuer which are required for an Issuer to be admitted for listing on the NSE and
to understand all the conditions that are precedent to listing on the NSE. The
proposed Memorandum & Articles of Association and the draft prospectus may
be presented to the NSE for examination before finalising them.
41
LISTING PROCEDURE
Approval of Memorandum and Articles of Association
Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that
the Articles of Association of the Issuer wanting to list its securities must contain
provisions as given hereunder.
The Articles of Association of an Issuer shall contain the following provisions
namely:
a. that there shall be no forfeiture of unclaimed dividends before the claim
becomes barred by law;
b. that a common form of transfer shall be used;
c. that fully paid shares shall be free from all lien and that in the case of
partly paid shares the Issuer's lien shall be restricted to moneys called or
payable at a fixed time in respect of such shares;
d. that registration of transfer shall not be refused on the ground of the
transferor being either alone or jointly with any other person or persons
indebted to the Issuer on any account whatsoever;
42
e. that any amount paid up in advance of calls on any share may carry
interest but shall not in respect thereof confer a right to dividend or to
participate in profits;
f. that option or right to call of shares shall not be given to any person except
with the sanction of the Issuer in general meetings.
g. permission for Sub-Division/Consolidation of Share Certificate.
Note: The Relevant Authority may take exception to any provision contained in
the Articles of Association of an Issuer which may be deemed undesirable or
unreasonable in the case of a public company and may require inclusion of
specific provisions deemed to be desirable and necessary.
If the Issuer's Articles of Association is not in conformity with the provisions as
stated above, the Issuer has to make amendments to the Articles of Association.
However, the securities of an Issuer may be admitted for listing on the NSE on an
undertaking by the Issuer that the amendments necessary in the Articles of
Association to bring Articles of Association in conformity with Rule 19(2)(a) of the
Securities Contract (Regulation) Rules, 1957 shall be made in the next annual
general meeting and in the meantime the Issuer shall act strictly in accordance
with prevalent provisions of Securities Contract (Regulation) Act, 1957 and other
statutes.
It is to be noted that any provision in the Articles of Association, which is not in
tune with sound corporate practice, has to be removed by amending the Articles
of Association.
43
Listing Procedure
Approval of draft prospectus
The Issuer shall file the draft prospectus and application forms with NSE. In case
NSE is not the Regional Stock Exchange then the draft prospectus and
application forms have to be filed simultaneously with the NSE when the same is
filed with the Regional Stock Exchange pertaining to the issue, for the perusal of
NSE. The draft prospectus should have been prepared in accordance with the
statutes, notifications, circulars, guidelines, etc. governing preparation and issue
of prospectus prevailing at the relevant time. The Issuers may particularly bear in
mind the provisions of Companies Act, Securities Contracts (Regulation) Act, the
SEBI Act and the relevant subordinate legislations thereto. NSE will peruse the
draft prospectus only from the point of view of checking whether the draft
prospectus is in accordance with the listing requirements, and therefore any
approval given by NSE in respect of the draft prospectus should not be construed
as approval under any laws, rules, notifications, circulars, guidelines etc. The
Issuers shall file a copy of the draft prospectus given by the respective Regional
Stock Exchange with NSE. The Issuer should also submit the SEBI
44
acknowledgment card or letter indicating observations on draft prospectus or
letter of offer by SEBI
Listing Procedure
Submission of Application
 For Issuers listing on NSE for the first time
 Listing of further Issues by Issuers already listed on NSE
 Listing Fees
 Security deposit (for new & fresh issues and when NSE is the Regional
Stock Exchange)
 Supporting documents
Listing Procedure
Submission of Application (For Issuers listing on NSE for the
first time)
Issuers desiring to list existing/new securities on the NSE shall make application
for admission of their securities to dealings on the NSE in the forms prescribed in
45
this regard as per details given hereunder or in such other form or forms as the
Relevant Authority may from time to time prescribe in addition thereto or in
modification or substitution thereof.
Appendix 'A' - Clauses of Articles of Association.
Appendix 'B'- Application Letter for Listing.
Appendix 'C-1' - Listing Application providing pre-issue details of securities.
Appendix 'C-2' - Listing Application providing post-issue details of securities.
Appendix 'D'- Checklist for supporting documents ( as applicable to the issuer)
Appendix 'E' - Schedule of Distribution
Appendix 'F'- Listing Agreement
Listing Procedure
Submission of Application (Listing of further Issues by Issuers
already listed on NSE)
Issuers whose securities are already listed on the NSE shall apply for admission
to listing on the NSE of any further issue of securities made by them. The
application for admission shall be made in the forms prescribed in this regard or
in such other form or forms as the Relevant Authority may from time to time
prescribe in addition thereto or in modification or substitution thereof.
Appendix 'E' - Schedule of Distribution
Appendix 'G'- Application Letter for Listing of further issues.

46
Appendix 'H' - Listing Application providing details of securities.
Appendix 'I' - Checklist for supporting documents submitted (as applicable)
Listing Fees
The listing fees depend on the paid up share capital of your Company:
Particulars Amount (Rs.)
Initial Listing Fees 7,500
Annual Listing Fees
Companies with paid up share and/or debenture capital:
Of Rs.1 crore 4,200
Above Rs.1 crore and up to Rs.5 crores 8,400
Above Rs.5 crores and up to Rs.10 crores 14,000
Above Rs.50 crores 70,000
Companies which have a paid up capital of more than Rs. 50 crores will pay
additional listing fees of Rs. 1400 for every increase of Rs. 5 crores or part
thereof in the paid up share/debenture capital.
47
Kindly draw your Cheques/Demand Drafts favouring National Stock Exchange of
India Limited, payable in Mumbai.
Listing Procedure
Submission of Application (Security Deposit)
(Payable only for new and fresh issues and only when NSE is the Regional Stock
Exchange)
The Relevant Authority shall not grant admission to dealings of securities of an
Issuer which is not listed or of any new (original or further) issue of securities of
an Issuer excepting Mutual Funds, which is listed on the NSE unless the Issuer
deposits and keeps deposited with the NSE (in cases where the securities are
offered for subscription, whether through the issue of a prospectus, letter of offer
or otherwise, and NSE is the Regional Stock Exchange for the Issuer) an amount
calculated at 1% of the amount of securities offered for subscription to the public
and or to the holders of existing securities of the Issuer, as the case may be for
ensuring compliance by the Issuer within the prescribed or stipulated period of all
requirements and conditions hereinafter mentioned and shall be refundable or
forfeitable in the manner hereinafter stated:
1. The Issuer shall comply with all prevailing requirements of law including all
requirements of and under any notifications, directives and guidelines
issued by the Central Government, SEBI or any statutory body or local
48
authority or any body or authority acting under the authority or direction of
the Central Government and all prevailing listing requirements and
conditions of the NSE and of each recognized Stock Exchange where the
Issuer has applied for permission for admission to dealings of the
securities, within the prescribed or stipulated period;
2. If the Issuer has complied with all the aforesaid requirements and
conditions including, wherever applicable, its obligation under Section 73
(or any statutory modification or re-enactment thereof) of the Companies
Act, 1956 and obligations arising therefrom, within the prescribed or
stipulated period, and on obtaining a No Objection Certificate from SEBI
and submitting it to NSE , NSE shall refund to the Issuer the said deposit
without interest within fifteen days from the expiry of the prescribed or
stipulated period;
3. If on expiry of the prescribed or stipulated period or the extended period
referred to hereafter, the Issuer has not complied with all the aforesaid
requirements and conditions, the said deposit shall be forfeited by the
NSE, at its discretion, and thereupon the same shall vest in the NSE.
Provided the forfeiture shall not release the Issuer of its obligation to
comply with the aforesaid requirements and conditions;
4. If the Issuer is unable to complete compliance of the aforesaid
requirements and conditions within the prescribed or stipulated period, the
NSE, at its discretion and if the Issuer has shown sufficient cause, but
without prejudice to the obligations of the Issuer under the laws in force to
49
comply with any such requirements and conditions within the prescribed or
stipulated period, may not forfeit the said deposit but may allow such
further time to the Issuer as the NSE may deem fit; provided that
1. the Issuer has at least ten days prior to expiry of the prescribed or
stipulated period applied in writing for extension of time to the NSE
stating the reasons for non-compliance, and
2. the Issuer, having been allowed further time by the NSE, has before
expiry of the prescribed or stipulated period, published in a manner
required by the NSE, the fact of such extension having been
allowed; provided further that where the NSE has not allowed
extension in writing before expiry of the prescribed or stipulated
period, the request for extension shall be deemed to have been
refused; provided also that any such extension shall not release the
Issuer of its obligations to comply with the aforesaid requirements
and conditions.
b. 50% of the above mentioned security deposit should be paid to the NSE in
cash. The balance amount can be provided by way of a bank guarantee,
in the format prescribed by or acceptable to NSE. The amount to be paid
in cash is limited to Rs.3 crores.
50
LISTING PROCEDURE
Submission of Application (Supporting Documents)
Issuers applying for admission of their securities to dealings on the NSE shall
submit to the NSE the following:
• Documents and Information
The documents and information prescribed in Appendix D or Appendix I (as
the case may be) to this Regulation or such other documents and information
as the Relevant Authority may from time to time prescribe, in addition thereto
or in modification or substitution thereof together with any other documents
and information which the Relevant Authority may require in any particular
case;
• Distribution Schedules
Distribution Schedules duly completed in respect of each class and kind of
security in the form prescribed in Appendix E (Table I, II & III) to this
Regulation or in such other form or forms as the Relevant Authority may from
time to time prescribe in addition thereto or in modification or substitution
thereof.
51
Listing Procedure
Listing conditions and requirements
All Issuers whose securities are listed on the NSE shall comply with the listing
conditions and requirements contained in the Listing Agreement Form appearing
in Appendix F to this Regulation or such other conditions and requirements as
the Relevant Authority may from time to time prescribe in addition thereto or in
modification or substitution thereof.
After fulfilling these criteria, a company has to send the following information for
further processing:
1. A brief note on the promoters and management.
2. Company profile.
3. Copies of the Annual Report for last 3 years.
4. Copies of the Draft Offer Document.
5. Memorandum & Articles of Association.
52
ELIGIBILITY CRITERIA FOR LISTING
An applicant who desires listing of its securities with NSE must fulfill the following
pre-requisites:
A. For Initial Public Offerings (IPOs)
B. For Securities of Existing Companies
NSE staff welcome the opportunity to discuss a company’s eligibility to list before
a formal application is made. On fulfillment of the eligibility criteria, the company
is required to fill in the listing application form.
53
IPOs by Companies
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 Rs. 10 crores
* and the capitalisation of the applicant’s equity shall not be less than Rs. 25
crores**
In respect of the requirement of paid-up capital and market capitalisation, the
issuers shall be required to include, in the disclaimer clause forming a part of
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 of the issuer would not be listed on
the Exchange.
* For this purpose, the post issue paid up equity capital for which listing is
sought shall be taken into account.
**For this purpose, capitalisation will be the product of the issue price and the
post issue number of equity shares.
54
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. At least three years track record of either:
a. The applicant seeking listing; or
b. The promoters*/promoting company, incorporated in or outside India
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 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 accepted by a court.
55
* 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 Project/ Activity plan of the applicant must have been appraised by a
financial institution u/s 4 A of the Companies Act, 1956 or a state finance
corporation or a scheduled commercial bank with a paid up capital
exceeding Rs.50 crores or a category I Merchant Banker with a net worth
of atleast Rs.10 crores or a venture capital fund with a net worth of atleast
Rs. 50 crores.
or
The applicant should have working capital arrangements with a bank having a
Networth of not less than Rs.50 crores.
“Provided that this Clause 4 shall not be applicable for listing of:
a) Equity shares and securities convertible into equity issued by
1. a banking company including a local area bank (i.e. Private Sector
Banks) set up under sub-clause (c) of Section 5 of the Banking
Regulation Act, 1949 and which has received license from the
Reserve Bank of India or
2. a corresponding new bank set up under the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970, Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1980,
56
State Bank of India Act, 1955 and the State Bank of India
(Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks) or
3. an infrastructure company – (a) whose project has been appraised
by a Public Financial Institution or Infrastructure Development
Finance Corporation (IDFC) or Infrastructure Leasing and Financial
Services Limited (IL&FS) and (b) not less than 5% of the project
cost is financed by any of the institutions referred to in clause (a)
above, jointly or severally, irrespective of whether they appraise the
project or not, by way of loan or subscription to equity or a
combination of both.
b) Securities other than equity shares or securities convertible into equity
shares at a later date issued by Government Companies, Public Sector
Undertakings, Financial Institutions, Nationalised Banks, Statutory
Corporations, Banking Companies and subsidiaries of Scheduled Commercial
Banks.”
5) 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
The applicant, 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
57
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, 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.
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,
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

58
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
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,
59
where all or any of the directors of issuer have or has been
charge-sheeted with serious crimes.
Note:
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.
60
Securities of Existing Companies
Existing Companies listed on other stock exchanges
1. Paid up Capital & Market Capitalisation
1. The paid-up equity capital of the applicant shall not be less than Rs.
10 crores * and the market capitalisation of the applicant’s equity
shall not be less than Rs. 25 crores**
Provided that the requirement of Rs. 25 crores market capitalisation
under this clause 1(a) shall not be applicable to listing of securities
issued by Government Companies, Public Sector Undertakings,
Financial Institutions, Nationalised Banks, Statutory Corporations and
Banking Companies who are otherwise bound to adhere to all the
relevant statutes, guidelines, circulars, clarifications etc. that may be
issued by various regulatory authorities from time to time.
or
2. The paid-up equity capital of the applicant shall not be less than Rs.
25 crores * (In case the market capitalisation is less than Rs. 25
crores, the securities of the company should be traded for at least
25% of the trading days during the last twelve months preceding
61
the date of submission of application by the company on at least
one of the stock exchanges where it is traded.)
or
3. The market capitalisation of the applicant’s equity shall not be less
than Rs. 50 crores. **
* 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 The market capitalisation shall be calculated by using
a 12 month moving average of the market capitalisation over a period
of six months immediately preceding the date of application. For the
purpose of calculating the market capitalisation over a 12 month
period, the average of the weekly high and low of the closing prices of
the shares as quoted on the National Stock Exchange during the last
twelve months and if the shares are not traded on the National Stock
Exchange such average price on any of the recognised Stock
Exchanges where those shares are frequently traded shall be taken
into account while determining market capitalisation after making
necessary adjustments for Corporate Action such as Rights / Bonus
Issue.
62
b. Conditions precedent to Listing:
The applicant shall have adhered to conditions precedent to listing as
emerging from inter-alia, 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.
c. Atleast three years track record of either:
a. the applicant seeking listing; or
b. the promoters’*/promoting company, incorporated in or outside India
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. The company has not been referred to the Board for Industrial and
Financial Reconstruction (BIFR).
2. The networth of the company has not been wiped out by the
accumulated losses resulting in a negative networth.
3. The company has not received any winding up petition accepted by
a court
63
* 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.
o The applicant should have been listed on any other recognised
stock exchange for atleast last three years
or
The project/activity plan must have been appraised by a financial institution
u/s 4A of the Companies Act, 1956, or a state finance corporation, or a
scheduled commercial bank with a paid up capital exceeding Rs. 50 crores, or
a category I Merchant Banker with a net worth of atleast Rs.10 crores or a
venture capital fund with a net worth of atleast Rs. 50 crores
or
The applicant should have working capital arrangements with a bank having a
networth of at least Rs.50 crores.
o The applicant has paid dividend in atleast 2 out of the last 3
financial years immediately preceding the year in which listing application
has been made
or
The applicant has distributable profits in at least two out of the last three
financial years (an auditors certificate must be provided in this regard).
64
or
The networth of the applicant is atleast Rs. 50 crores***
While considering the profitability / ability to distribute dividend, the non
recurring income/extraordinary income shall be excluded from the total
income. Further in case of companies where networth criteria is satisfied on
account of shares being issued at a premium for consideration other than
cash, such cases be referred to the Listing Advisory Committee (LAC).
*** Networth means: Paid up equity capital plus Reserves excluding
revaluation reserve minus Miscellaneous Expenses not written off minus
balance in profit and loss account to the extent not set off
"Provided that Clause 4 and Clause 5 shall not be applicable for listing of:
a) Equity shares and securities convertible into equity issued by
i. a banking company including a local area bank (i.e. Private Sector Banks)
set up under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949
and which has received license from the Reserve Bank of India or
ii. a corresponding new bank set up under the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970, Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980, State Bank of India Act,
1955 and the State Bank of India (Subsidiary Banks) Act, 1959 (i.e. Public
Sector Banks)
65
Or
iii. an infrastructure company – (a) whose project has been appraised by a
Public Financial Institution or Infrastructure Development Finance Corporation
(IDFC) or Infrastructure Leasing and Financial Services Limited (IL&FS) and
(b) not less than 5% of the project cost is financed by any of the institutions
referred to in clause (a) above, jointly or severally, irrespective of whether
they appraise the project or not, by way of loan or subscription to equity or a
combination of both.
b) Securities other than equity shares or securities convertible into equity
shares at a later date issued by Government Companies, Public Sector
Undertakings, Financial Institutions, Nationalised Banks, Statutory
Corporations, Banking Companies and subsidiaries of Scheduled Commercial
Banks."
66
THE APPLICANT DESIROUS OF LISTING ITS SECURITIES SHOULD
ALSO SATISFY THE EXCHANGE ON THE FOLLOWING:
1. No Disciplinary action has been taken by other stock
exchanges and regulatory authorities in the past three years
The applicant, 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.
2. Redressal mechanism of Investor grievance
The points of consideration are:
 The applicant, promoters/promoting company(ies), group
company(ies) track record in redressal of investor grievances
 The applicant’s arrangements envisaged are in place for
servicing its investor
67
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,
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.
3. 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.
4. Details of Litigation
The applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies)
68
litigation record, the nature of litigation, status of litigation during the
preceding three years need to be clarified to the exchange.
5. 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.
6. 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.
69
NOTE:
Where an unlisted company merges with a company listed on other stock
exchanges and the merged entity seeks listing on the NSE, the Exchange may
grant listing to the merged entity only if the listed company (prior to the merger
with the unlisted company) meets all the criteria for listing on its own account or
the unlisted company meets the requirements for listing on the Exchange, except
for the market capitalisation condition, on its own account. In case either of the
above conditions are not met then such company may be considered for listing
after a minimum period of 18 months or more or after the publication of two
annual reports whichever is later, provided it satisfies the criteria at that point of
time.
70
BOMBAY STOCK EXCHANGE
71
ABOUT BSE
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share &
Stock Brokers Association" in 1875. It is the first stock exchange in the country to
obtain permanent recognition in 1956 from the Government of India under the
Securities Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-
eminent role in the development of the Indian capital market is widely recognized
and its index, SENSEX, is tracked worldwide. Earlier an Association of Persons
(AOP), the Exchange is now a demutualised and corporatised entity incorporated
under the provisions of the Companies Act, 1956, pursuant to the
BSE(Corporatisation and Demutualisation) Scheme, 2005 notified by the
Securities and Exchange Board of India (SEBI).
With demutualisation, the trading rights and ownership rights have been de-
linked effectively addressing concerns regarding perceived and real conflicts of
interest. The Exchange is professionally managed under the overall direction of
the Board of Directors.The Board comprises eminent professionals,
representatives of Trading Members and the Managing Director of the Exchange.
The Board is inclusive and is designed to benefit from theparticipation of market
intermediaries.
72
In terms of organisation structure, the Board formulates larger policy issues and
exercises over-all control. The committees constituted by the Board are broad-
based.The day-to-dayoperations of the Exchange are managed by the Managing
Director and a management team of professionals.
The Exchange has a nation-wide reach with a presence in 417 cities and towns
of India. The systems and processes of the Exchange are designed to safeguard
market integrity and enhance transparency in operations. During the year 2004-
2005, the trading volumes on the Exchange showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity,
debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is
a proprietory system of the Exchange and is BS 7799-2-2002 certified. The
surveillance and clearing & settlement functions of the Exchange are ISO
9001:2000 certified.
73
HERITAGE
The oldest exchange in Asia and the first exchange in the country to be granted
permanent recognition under the Securities Contract Regulation Act, 1956,
Bombay Stock Exchange Limited (BSE) has had an interesting rise to
prominence over the past 130 years.
While the BSE is now synonymous with Dalal Street, it wasn’t always so. In
fact the first venues of the earliest stock broker meetings in the 1850s were
amidst rather natural environs - under banyan trees - in front of the Town Hall,
where Horniman Circle is now situated. A decade later, the brokers moved
their venue to another set of foliage, this time under banyan trees at the
junction of Meadows Street and Mahatma Gandhi Road. As the number of
brokers increased, they had to shift from place to place, and wherever they
went, through sheer habit, they overflowed in to the streets. At last, in 1874,
found a permanent place, and one that they could, quite literally, call their
own. The new place was, aptly, called Dalal Street.
The journey of BSE is as eventful and interesting as the history of India’s
securitiesmarkets. India’s biggest bourse, in terms of listed companies and
market capitalisation, BSE has played a pioneering role in the Indian
74
Securities Market - one of the oldest in the world. Much before actual
legislations were enacted, BSE had formulated comprehensive set of Rules
and Regulations for the Indian Capital Markets. It also laid down best
practices adopted by the Indian Capital Markets after India gained its
Independence.
Perhaps, there would not be any leading corporate in India, which has not
sourced BSE’s services in resource mobilization.
BSE as a brand is synonymous with capital markets in India. The BSE
SENSEX is the benchmark equity index that reflects the robustness of the
economy and finance. At par with international standards, BSE has been a
pioneer in several areas. It has several firsts to its credit even in an intensely
competitive environment.
 First in India to introduce Equity Derivatives
 First in India to launch a Free Float Index
 First in India to launch US$ version of BSE Sensex
 First in India to launch Exchange Enabled Internet Trading Platform
 First in India to obtain ISO certification for Surveillance, Clearing &
Settlement
75
 'BSE On-Line Trading System’ (BOLT) has been awarded the globally
recognised the Information Security Management System standard
BS7799-2: 2002.
 First to have an exclusive facility for financial training
 Moved from Open Outcry to Electronic Trading within just 50 days
An equally important accomplishment of BSE is the launch of a nationwide
investor awareness campaign - Safe Investing in the Stock Market - under
which nationwide awareness campaigns and dissemination of information
through print and electronic medium was undertaken. BSE also actively
promoted the securities market awareness campaign of the Securities and
Exchange Board of India.
In 2002, the name The Stock Exchange, Mumbai, was changed to BSE. BSE,
which had introduced securities trading in India, replaced its open outcry
system of trading in 1995, when the totally automated trading through the
BSE Online trading (BOLT) system was put into practice. The BOLT network
was expanded, nationwide, in 1997. It was at the BSE's International
Convention Hall that India’s 1st Bell ringing ceremony in the history Capital
76
Markets was held on February 18th, 2002. It was the listing ceremony of
Bharti Tele ventures Ltd.
BSE with its long history of capital market development is fully geared to
continue its contributions to further the growth of the securities markets of the
country, thus helping India increase its sphere of influence in international
financial markets.
For the premier Stock Exchange that pioneered the stock broking activity in
India, 125 years of experience seem to be a proud milestone. A lot has
changed since 1875 when 318 persons became members of what today is
called "Bombay Stock Exchange Limited" by paying a princely amount of Re1.
Since then, the stock market in the country has passed through both good
and bad periods. The journey in the 20th century has not been an easy one.
Till the decade of eighties, there was no measure or scale that could precisely
measure the various ups and downs in the Indian stock market. Bombay
Stock Exchange Limited (BSE) in 1986 came out with a Stock Index that
subsequently became the barometer of the Indian Stock Market.
BSE-SENSEX, first compiled in 1986 is a "Market Capitalization-Weighted"
index of 30 component stocks representing a sample of large, well-
established and financially sound companies. The base year of BSE-SENSEX
77
is 1978-79. The index is widely reported in both domestic and international
markets through print as well as electronic media. BSE-SENSEX is not only
scientifically designed but also based on globally accepted construction and
review methodology. The "Market Capitalization-Weighted" methodology is a
widely followed index construction methodology on which majority of global
equity benchmarks are based.
The growth of equity markets in India has been phenomenal in the decade
gone by. Right from early nineties the stock market witnessed heightened
activity in terms of various bull and bear runs. More recently, the bourses in
India witnessed a similar frenzy in the 'TMT' sectors. The BSE-SENSEX
captured all these happenings in the most judicial manner. One can identify
the booms and bust of the Indian equity market through BSE-SENSEX.
The launch of BSE-SENSEX in 1986 was later followed up in January 1989
by introduction of BSE National Index (Base: 1983-84 = 100). It comprised of
100 stocks listed at five major stock exchanges in India at Mumbai, Calcutta,
Delhi, Ahmedabad and Madras. The BSE National Index was renamed as
BSE-100 Index from October 14, 1996 and since then it is calculated taking
into consideration only the prices of stocks listed at BSE.
78
With a view to provide a better representation of the increased number of
companies listed, increased market capitalisation and the new industry
groups, the Exchange constructed and launched on 27th May, 1994, two new
index series viz., the 'BSE-200' and the 'DOLLEX-200' indices. Since then,
BSE has come a long way in attuning itself to the varied needs of investors
and market participants. In order to fulfill the need of the market participants
for still broader, segment-specific and sector-specific indices, the Exchange
has continuously been increasing the range of its indices. The launch of BSE-
200 Index in 1994 was followed by the launch of BSE-500 Index and 5
sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index,
DOLLEX-30 and the country's first free-float based index - the BSE TECk
Index taking the family of BSE Indices to 13.
The Exchange also disseminates the Price-Earnings Ratio, the Price to Book
Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its
major indices.
The values of all BSE indices (except the Dollar version of indices) are
updated every 15 seconds during the market hours and displayed through the
BOLT system, BSE website and news wire agencies.
79
All BSE-Indices are reviewed periodically by the "Index Committee" of the
Exchange. The committee frames the broad policy guidelines for the
development and maintenance of all BSE indices. The Index Cell of the
Exchange carries out the day to day maintenance of all indices and conducts
research on development of new indices.
80
BOARD OF DIRECTORS
Non-Executive Chairman Mr. Jagdish Capoor
Chairman, HDFC Bank
MD & CEO Mr. Rajnikant Patel
Directors
Mr. P. K. Banerji Mr.S.Jambunathan
IAS (Retd.) IAS (Retd.)
Ex-Chairman-cum-Managing Director
Prof. N. Ravichandran
Export Credit and Gurantee
Professor, IIM Ahmedabad
Corporation, Govt. of India
Mr. Jitesh Khosla Mr. Vijay Mukhi
Joint Secretary, Dept. of Company Managing Director, Vijay Mukhi's
Affairs, Govt. of India Computer Institute

Mr. Pradip P. Shah Mr. P. P. Vora
Chairman, IndAsia Fund Advisors Private Ex-Chairman, Industrial Development
Limited Bank of India and National Stock
Exchange of India Limited
81
Trading Member Representatives Mr. Prakash R. Kacholia
Mr. Balkishan Mohta
Mr. Siddharth J. Shah
82
MANAGEMENT TEAM
Sr. No. Name Designation Department

1 Mr. Rajnikant MD & CEO
Patel
2 Mr. A. A. Chief - Investor Department of Investor
Tirodkar Services Services

3 Mr. S.B. Chief Technology Dept. of Information
Patankar Officer Technology

4 Mr. Kevin Chief General Manager Dept. of Administration &
Desouza Personnel Mgt.

5 Mr. P.S. Reddy Chief General Manager HR (Policies & Procedures),
DCS and DOSS

6 Mr. S. S. Vyas Chief - Internal Control Internal Control Functions
7 Dr. Bandi Ram Chief Knowledge Knowledge Management
Prasad Officer
8 Mr. Suniel Senior General Member Services &
Vichare Manager Development
9 Mr. P. P. Senior General Dept. of Operations &
Kaladharan Manager Trading (DOT)
10 Mr. T. V. Senior General Strategy, Planning &
Rangaswami Manager Policies
11 Mr. V. G. Company Secretary Secretarial & Compliance
Bhagat
12 Mr. Sanjiv General Manager Dept. of Surveillance &
Kapur Supervision (DOSS)
13 Mrs. Devika S. General Manager Clearing & Settlement,
83
Shah Derivatives & Debt
14 Mr. S. S. Bolar General Manager Investments & Accounts
15 Mr. Sanjay M. General Manager Dept. of Corporate Services
Golecha (DCS)
16 Mr. Lalit General Manager Dept. of Information
Ranpuria Technology (DIT)
17 Mr. C. General Manager Knowledge Management
Vasudevan
18 Mr. Rahul General Manager Dept. of Operations &
Sharma Trading (DOT)
19 Mr. Saji General Manager Strategy, Planning &
Cherian Policies
LISTING OF SECURITIES
Listing means admission of the securities to dealings on a recognised stock
exchange. The securities may be of any public limited company, Central or State
Government, quasi-governmental and other financial institutions/corporations,
municipalities, etc.
The objectives of listing are mainly to :
• provide liquidity to securities;
• mobilize savings for economic development;
84
• protect interest of investors by ensuring full disclosures.
The Exchange has a separate Listing Department to grant approval for listing of
securities of companies in accordance with the provisions of the Securities
Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957,
Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and
Regulations of the Exchange.
A company intending to have its securities listed on the Exchange has to comply
with the listing requirements prescribed by the Exchange. Some of the
requirements are as under: -
85
1. Minimum Listing Requirements for new companies
2. Minimum Requirements for companies delisted by this Exchange
seeking relisting of this Exchange
3. Minimum Requirements for companies delisted by this Exchange
seeking relisting of this Exchange
4. Permission to use the name of the Exchange in an Issuer Company's
prospectus
5. Submission of Letter of Application
6. Allotment of Securities
7. Trading Permission
8. Requirement of 1% Security
9. Payment of Listing Fees
10. Compliance with Listing Agreement
11. "Z" Group
12. Cash Management Services (CMS) - Collection of Listing Fees
86
[I] MINIMUM LISTING REQUIREMENTS FOR NEW COMPANIES
(A) Minimum Capital:
1. New companies can be listed on the Exchange, if their issued &
subscribed equity capital after the public issue is Rs.10 crores. In addition
to this the issuer company should have a post issue networth (equity
capital + free reserves excluding revaluation reserve) of Rs.20 crores.
2. For new companies in high technology ( i.e. information technology,
internet, e-commerce, telecommunication, media including advertisement,
entertainment etc.) the following criteria will be applicable regarding
threshold limit:
i. The total income/sales from the main activity, which should be in
the field of information technology, internet, e-commerce,
telecommunication, media including advertisement, entertainment
etc. should not be less than 75% of the total income during the two
immediately preceding years as certified by the Auditors of the
company.
ii. The minimum post-issue paid-up equity capital should be Rs.5
Crores.
87
iii. The minimum market capitalisation should be Rs.50 Crores. (The
capitalisation will be calculated by multiplying the post issue
subscribed number of equity shares with the Issue price).
iv. Post issue networth ( equity capital + free reserves excluding
revaluation reserve) of Rs.20 Crores.
(B) MINIMUM PUBLIC OFFER:
As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957,
securities of a company can be listed on a Stock Exchange only when at least
25% of each class or kind of securities is offered to the public for subscription.
In case of IPOs by unlisted companies in the IT & entertainment sector, at least
10% of the securities issued by the company may be offered to the public subject
to the following:
• Minimum 20 lac securities are offered to the public (excluding reservation,
firm allotment and promoters contribution)
• The size of the offer to the public is minimum 50 crores.
88
For this purpose, the term "offered to the public" means only the portion offered
to the public and does not include reservations of securities on firm or
competitive basis.
SEBI may, however, relax this condition on the basis of recommendations of
stock exchange(s), only in respect of a Government company defined under
Section 617 of the Companies Act, 1956.
89
[II] MINIMUM LISTING REQUIREMENTS FOR COMPANIES
LISTED ON OTHER STOCK EXCHANGES
The Governing Board of the Exchange at its meeting held on 6th August, 2002
amended the direct listing norms for companies listed on other Stock
Exchange(s) and seeking listing at BSE. These norms are applicable with
immediate effect.
1. The company should have minimum issued and paid up equity capital of
Rs. 3 crores.
2. The Company should have profit making track record for last three years.
The revenues/profits arising out of extra ordinary items or income from any
source of non-recurring nature should be excluded while calculating
distributable profits.
3. Minimum networth of Rs. 20 crores (networth includes Equity capital and
free reserves excluding revaluation reserves).
4. Minimum market capitalisation of the listed capital should be at least two
times of the paid up capital.
5. The company should have a dividend paying track record for the last 3
consecutive years and the minimum dividend should be at least 10%.
6. Minimum 25% of the company's issued capital should be with Non-
Promoters shareholders as per Clause 35 of the Listing Agreement. Out of
above Non Promoter holding no single shareholder should hold more than
0.5% of the paid-up capital of the company individually or jointly with
90
others except in case of Banks/Financial Institutions/Foreign Institutional
Investors/Overseas Corporate Bodies and Non-Resident Indians.
7. The company should have at least two years listing record with any of the
Regional Stock Exchange.
8. The company should sign an agreement with CDSL & NSDL for demat
trading.
91
[III] Minimum Requirements for companies delisted by this
Exchange seeking relisting of this Exchange
The companies delisted by this Exchange and seeking relisting are required to
make a fresh public offer and comply with the prevailing SEBI's and BSE's
guidelines regarding initial public offerings.
[IV] Permission to use the name of the Exchange in an Issuer Company's
prospectus
The Exchange follows a procedure in terms of which companies desiring to list
their securities offered through public issues are required to obtain its prior
permission to use the name of the Exchange in their prospectus or offer for sale
documents before filing the same with the concerned office of the Registrar of
Companies. The Exchange has since last three years formed a "Listing
Committee" to analyse draft prospectus/offer documents of the companies in
respect of their forthcoming public issues of securities and decide upon the
matter of granting them permission to use the name of "Bombay Stock Exchange
Limited" in their prospectus/offer documents. The committee evaluates the
promoters, company, project and several other factors before taking decision in
this regard.
92
[V] SUBMISSION OF LETTER OF APPLICATION
As per Section 73 of the Companies Act, 1956, a company seeking listing of its
securities on the Exchange is required to submit a Letter of Application to all the
Stock Exchanges where it proposes to have its securities listed before filing the
prospectus with the Registrar of Companies.
[VI] ALLOTMENT OF SECURITIES
As per Listing Agreement, a company is required to complete allotment of
securities offered to the public within 30 days of the date of closure of the
subscription list and approach the Regional Stock Exchange, i.e. Stock Exchange
nearest to its Registered Office for approval of the basis of allotment.
In case of Book Building issue, Allotment shall be made not later than 15 days
from the closure of the issue failing which interest at the rate of 15% shall be paid
to the investors.
93
[VII] TRADING PERMISSION
As per Securities and Exchange Board of India Guidelines, the issuer company
should complete the formalities for trading at all the Stock Exchanges where the
securities are to be listed within 7 working days of finalisation of Basis of
Allotment.
A company should scrupulously adhere to the time limit for allotment of all
securities and dispatch of Allotment Letters/Share Certificates and Refund
Orders and for obtaining the listing permissions of all the Exchanges whose
names are stated in its prospectus or offer documents. In the event of listing
permission to a company being denied by any Stock Exchange where it had
applied for listing of its securities, it cannot proceed with the allotment of shares.
However, the company may file an appeal before the Securities and Exchange
Board of India under Section 22 of the Securities Contracts (Regulation) Act,
1956.
[VIII] REQUIREMENT OF 1% SECURITY
The companies making public/rights issues are required to deposit 1% of issue
amount with the Regional Stock Exchange before the issue opens. This amount
is liable to be forfeited in the event of the company not resolving the complaints
of investors regarding delay in sending refund orders/share certificates, non-
payment of commission to underwriters, brokers, etc.
94
[IX] PAYMENT OF LISTING FEES
All companies listed on the Exchange have to pay Annual Listing Fees by the
30th April of every financial year to the Exchange as per the Schedule of Listing
Fees prescribed from time to time.
The schedule of listing fees for the year 2004-2005, prescribed by the Governing
Board of the Exchange and approved by the Securities and Exchange Board of
India is given hereunder:
95
SCHEDULE OF LISTING FEES FOR THE YEAR 2005-2006
Sr. Amount
Particulars
No. (Rs.)
1 Initial Listing Fees 20,000
2
Annual Listing Fees
(i) Companies with paid-up capital* upto Rs. 5 crores

10,000
(ii) Above Rs. 5 crores and upto Rs. 10 crores

15,000
(iii) Above Rs. 10 crores and upto Rs. 20 crores

30,000
3 Companies which have a paid-up capital* of more than Rs. 20
crores will pay additional fee of Rs. 750/- for every increase of
Rs. 1 crores or part thereof.

4 In case of debenture capital (not convertible into equity shares) of
companies, the fees will be charged @ 25% of the fees payable
as per the above mentioned scales.

*Includes equity shares, preference shares, fully convertible debentures, partly
convertible debenture capital and any other security which will be converted into equity
shares.
96
[X] COMPLIANCE WITH LISTING AGREEMENT
The companies desirous of getting their securities listed are required to enter into
an agreement with the Exchange called the Listing Agreement and they are
required to make certain disclosures and perform certain acts. As such, the
agreement is of great importance and is executed under the common seal of a
company. Under the Listing Agreement, a company undertakes, amongst other
things, to provide facilities for prompt transfer, registration, sub-division and
consolidation of securities; to give proper notice of closure of transfer books and
record dates, to forward copies of unabridged Annual Reports and Balance
Sheets to the shareholders, to file Distribution Schedule with the Exchange
annually; to furnish financial results on a quarterly basis; intimate promptly to the
Exchange the happenings which are likely to materially affect the financial
performance of the Company and its stock prices, to comply with the conditions
of Corporate Governance, etc.
The Listing Department of the Exchange monitors the compliance of the
companies with the provisions of the Listing Agreement, especially with regard to
timely payment of annual listing fees, submission of quarterly results,
requirement of minimum number of shareholders, etc. and takes penal action
against the defaulting companies.
97
[XI] "Z" Group
The Exchange has introduced a new category called "Z Group" from July 1999
for companies who have not complied with and are in breach of provisions of the
Listing Agreement. The number of companies placed under this group as at the
end of May, 2001 was 1,475.
The number of companies listed at the Exchange as at the end of May 2001 was
5,874. This is the highest number among the Stock Exchanges in the country and
in the world.
New Direct Listing norms
The Governing Board of the Exchange at its meeting held on 6th August, 2002
amended the direct listing norms for companies listed on other Stock
Exchange(s) and seeking listing at BSE. These norms are applicable with
immediate effect.
1. The company should have minimum issued and paid up equity capital of
Rs. 3 crores.
2. The Company should have profit making track record for last three years.
The revenues/profits arising out of extra ordinary items or income from any
source of non-recurring nature should be excluded while calculating
distributable profits.
98
3. Minimum networth of Rs. 20 crores (networth includes Equity capital and
free reserves excluding revaluation reserves).
4. Minimum market capitalisation of the listed capital should be at least two
times of the paid up capital.
5. The company should have a dividend paying track record for the last 3
consecutive years and the minimum dividend should be at least 10%.
6. Minimum 25% of the company's issued capital should be with Non-
Promoters shareholders as per Clause 35 of the Listing Agreement. Out of
above Non Promoter holding no single shareholder should hold more than
0.5% of the paid-up capital of the company individually or jointly with
others except in case of Banks/Financial Institutions/Foreign Institutional
Investors/Overseas Corporate Bodies and Non-Resident Indians.
7. The company should have at least two years listing record with any of the
Regional Stock Exchange.
8. The company should sign an agreement with CDSL & NSDL for demat
trading.
99
[XII] CASH MANAGEMENT SERVICES (CMS) - COLLECTION OF
LISTING FEES
As a further step towards simplifying the system of payment of listing fees, the
Exchange has entered into an arrangement with HDFC Bank for collection of
listing fees, from 141 locations, situated all over India. Details of the HDFC Bank
branches, are available on our website site www.bseindia.com as well as on the
HDFC Bank website www.hdfcbank.com The above facility is being provided free
of cost to the Companies.
Companies intending to utilise the above facility for payment of listing fee would
be required to furnish the information, (mentioned below) in the Cash
Management Cash Deposit Slip. These slips would be available at all the
HDFC Bank centres.
S.No HEAD INFORMATION TO BE PROVIDED

Client
1. Bombay Stock Exchange Limited
Name
Client
2. BSELIST
Code
Cheque
3. mention the cheque No & date
No.
4. Date date on which payment is being deposited with the bank.
state the name of the company and the company code No.The
last digits mentioned in the Ref. No. on the Bill is the company
5. Drawer
code No.e.g If the Ref. No in the Bill is mentioned as : Listing/Alf-
Bill/2004-2005/4488, then the code No of that company is 4488
100
Drawee
6. state the bank on which cheque is drawn
Bank
Drawn on
7. Mention the location of the drawee bank.
Location
Pickup
8. Not applicable
Location
No. of
9. Not applicable
Insts
The Cheque should be drawn in favour of Bombay Stock Exchange Limited , and
should be payable, locally .Companies are requested to mention in the deposit
slip, the financial year(s) for which listing fee is being paid. Payment made
through any other slips would not be considered. The above slips will have to be
filled in quadruplicate. One acknowledged copy would be provided to the
depositor by the HDFC Bank.
101
ANALYSIS
TABLE NO. 1, COMPARATIVE SUMMARY OF CAPITAL
REQUIREMENT.
102
Serial
Criteria BSE NSE
No.
Capital Required MINIMUM 10

1 MINIMUM 10 CRORES
(Paid-Up) CRORES
Market MINIMUM 2 TIMES OF PAID-UP MINIMUM 25

2
Capitalization CAPITAL CRORES
Profit Making
3 At-least last 3 years N.A.
Record
The net worth of the
company has not
Net Worth been wiped out by

4 Minimum 20 cr.
Required the accumulated
losses resulting in a
negative net worth
103
Comparison when company/ies is/are already listed on other stock exchange/s
Capital Required MINIMUM 10

5 MINIMUM 3CRORES
(Paid-Up) CRORES
Market MINIMUM 2 TIMES OF PAID-UP MINIMUM 25

6
Capitalization CAPITAL CRORES
At-least two out of
Profit Making
7 At-least last 3 years the last three
Record
financial years
Net Worth
8 Minimum 20 cr. Minimum 50 cr.
Required
Minimum 2 out of the
Dividend paying last 3 immediately

9 Minimum 3 years
track record preceding financial
years
At-least three years
At-least two years listing record
listing record with
10 Listing Record with any Regional Stock
any Regional Stock
Exchange.
Exchange.
INTERPRETATION
104
As per the Table No.1 (Comparative summary of capital requirement.)
Capital Required: -
On NSE for new companies minimum paid up capital requirement
is 10 crores, while on BSE the requirement is also 10 crores & for new companies in
high technology the minimum post-issue paid-up equity capital should be Rs.5 Crores.
Market Capitalization: -
On NSE the market capitalization should be 25 crores, while
on BSE the minimum market capitalisation should be Rs.50 Crores (in case of new
companies in high technology).
Profit Making Record: -
On NSE the company must have distributable profits in at least
two out of the last three financial years (an auditors certificate must be provided in this
regard), while for listing company on BSE Company should have profit making track
record for last three years
Net Worth Required: -
On NSE the net worth of the company has not been wiped out
by the accumulated losses resulting in a negative net worth, while on BSE the issuer
company should have a post issue net worth (equity capital + free reserves excluding
revaluation reserve) of Rs.20 crores.
Dividend paying track record: -
105
On NSE the applicant has paid dividend in at least 2
out of the last 3 financial years immediately preceding the year in which listing
application has been made(in case),while on BSE the company should have a dividend
paying track record for the last 3 consecutive years and the minimum dividend should be
at least 10%. (when company/ies is/are already listed on other stock exchange/s).
Listing Record: -
On NSE the applicant should have been listed on any other recognised
stock exchange for at least last three years, while on BSE the company should have at
least two years listing record with any of the Regional Stock Exchange.
106
COMPARISON OF LISTING FEES
BSE NSE
Initial Listing Fees
Rs.20, 000 Rs.7, 500
Annual Listing Fees
Companies with paid up share and/or debenture capital:
Of Rs.1 crore 4,200

Up to Rs. 5 crores
10,000
Above Rs.1 crore and
8,400
up to Rs.5 crores
Above Rs. 5
Above Rs.5 crores and
crores and up to 15,000 14,000
up to Rs.10 crores
Rs. 10 crores
Above Rs. 10
Above Rs.10 crores
crores and up to 30,000 28,000
and up to Rs.20 crores
Rs. 20 crores
Additional fee of Rs. Above Rs.20 crores
42,000
750/- for every and up to Rs.50 crores
Above 20 crores
increase of Rs. 1
Above Rs.50 crores 70,000
crores or part thereof.
The comparison of INITIAL LISTING FEES is shown in the chart:-1
107
NSE BSE
NSE
BSE
Initial Listing Fees (In Rs.)
NSE BSE
7,500 20,000
With the help of these charts we can simplify the comparison of listing fees. These charts
depict that listing fees on NSE is much lower than on BSE.
108
The FURTHER LISTING FEES on NSE is shown in the chart: -2
NSE
4,200 8,400
14,000
70,000
28,000
42,000
Of Rs.1 crore Rs.1 cr to Rs.5 cr Rs.5 cr to Rs. 10cr

Rs.10 cr to Rs.20 cr Rs.20 cr to Rs.50 cr Above Rs.50 crores
109
The FURTHER LISTING FEES on BSE is shown in the chart: -3
BSE
750 10,000
30,000
15,000
Up to Rs. 5 cr Rs.5 cr to Rs. 10cr
Rs.10 cr to Rs.20 cr Above 20 crores*
If we take the initial listing fees so we see that NSE charges less amount when
BSE charges a huge amount & as we travel further the charges charged by NSE for
listing on it is lower than the on BSE.
110
BENEFITS
1. A premier market place
2. Visibility
3. Largest exchange
4. Unprecedented reach
5. Modern infrastructure
6. Transaction speed
7. Short settlement cycles
8. Broadcast of corporate announcements
9. Trade statistics for listed companies
10. Investor service centers
11. Nominal listing fees
111
1. A premier marketplace
The sheer volume of trading activity ensure that the impact cost is lower on NSE
which in turn reduces the cost of trading to the investor. NSE’s automated trading
system ensures consistency and transparency in the trade matching which
enhances investors confidence and visibility of our market.
2. Visibility
The trading system in NSE provides unparallel 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.
3. Largest Exchange
NSE is the largest exchange in the county in terms of trading volumes. During the
year 2003-2004, NSE reported a turnover of Rs. 1,099,535 crores in the equities
segment.
112
4. Unprecedented reach
NSE provides a trading platform that extends across the length and breadth of
the country. Investors from 360 centres can avail of trading facilities on the NSE
Trading Network. The Exchange uses the latest in communication technology to
give instant access from every location.
5. Modern infrastructure
NSE introduced for the first time in India, fully automated screen based trading.
The Exchange uses a sophisticated telecommunication network with over 9000
trading terminals connected through VSATs (Very Small Aperture Terminals).
6. Transaction speed
The speed at which NSE processes orders, results in liquidity and better
available prices. NSE's trading system on an average processes 8000 orders per
minute. The highest number of trades in a day of 28,49,987 was recorded on
January 05, 2005.
113
7. Short settlement cycles
NSE has successfully completed more than 1250 settlements without any delays.
8. 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.
9. Trade statistics for listed companies
Listed companies are provided with monthly trade statistics for all the securities
of the company listed on NSE.
10. Investor service centers
114
Six investor-service centers opened by NSE across the country cater to the
needs of investors.
11. Nominal listing fees
The listing fee charged by NSE is much lower compared to the listing fees
charged BSE.
115
CONCLUSION
On the basis of above stated study it has been assorted that with respect to
technology, listing fees, listing procedure, eligibility criteria of listing & listing
requirements the National Stock Exchange has the edge.
Despite the fact that Bombay Stock Exchange is older & has high level of trading
volume.
However, Many market Players, Brokers, sub-brokers, trading firms etc. deal
through the Bombay Stock Exchange.
116
FINDINGS
When I complete the assign project research then I finds some
important points in this report these are given as follows;
• There are capital require (paid up) must be minimum 10 crore
for listing in NSE or BSE for a particular company.
• Initial listing fees for a particular company in national stock
exchange are much lower then on Bombay stock exchange.
• Market capitalization of the Bombay stock exchange is more then
national stock exchange.
The daily turnover of national stock exchange is more then Bombay
stock exchange on daily basis.
117
LIMITATION
There are many limitations of this research report which are given as
follows-
• Short period of time.
• There are some changes in stock market in daily basis.
• This project merely tells about the listing procedure of equities on
NSE and BSE.
This project report not tells about the listing procedure of corporate
bonds and mutual funds etc
118
BIBLIOGRAPHY
AUTHORS
 PRASANNA CHANDRA
 PUNITHARVATHY PANDIAN
 FISCHER JORDAN
WEBSITES
 google.com
 nseindia.com
 bse.com
 myiris.com
 indiabulls.com
MAGAZINES / NEWSPAPERS
 The Business World
 The Business Today
 The Financial Express
 The Global Business
119

Comparative Study NSE - BSE

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Comparative Study NSE - BSE

Caricato da

Copyright:

Formati disponibili

A

SUMMER TRAINING PROJECT

LISTING PROCEDURE & ITS ANALYSIS:

NSE & BSE

Submitted To: Submitted By

LLOYD INSTITUTE OF MANAGEMENT &

CONTENTS PAGE NO.

 NATIONAL STOCK EXCHANGE 9

 LISTING PROCEDURE ON NSE 41

 ELIGIBILITY CRITERIA FOR LISTING ON NSE 55

 LISTING OF SECURITIES ON BSE 86

 ANALYSIS AND INTERPRETATION 103

 LISTING BENEFITS 112

and unsatisfactory. The task of completing this project needs knowledge,

me with the necessary facilities to carry out the project successfully.

familiarizing me with the concepts of management, which were of great help to

complete this project.

• The project would help a company to make familiar with listing

procedure on NSE & BSE.

for raising funds through equity share capital.

“Learning Categories You, and practicing on that learning specialize you “ .

the companies under the expert guidance of a competent person.

contents in the report.

The methodology used for the implementation of the assigned

pie explosion chart.

Research design for the descriptive study is of exploratory type

and the forms is given to discover the possible measure by detailed

analysis this report also based on descriptive research because it

Secondary data is to be used in the research, have been

Research design: descriptive type and analytical type

Data collection method : secondary data collect method.

institutions to provide a modern, fully automated screen-based trading system

as a model for the securities industry in terms of systems, practices and

state-of-art information technology to provide an efficient and transparent trading,

clearing and settlement mechanism, and has witnessed several innovations in

products & services viz. demutualisation of stock exchange governance, screen

based trading, compression of settlement cycles, dematerialisation and electronic

transfer of securities, securities lending and borrowing, professionalisation of

trading members, fine-tuned risk management systems, emergence of clearing

corporations to assume counterparty risks, market of debt and derivative

instruments and intensive use of information technology.

November 1992 Incorporation

High Powered Study Group on Establishment of New Stock Exchanges, which

recommended promotion of a National Stock Exchange by financial institutions

footing. Based on the recommendations, NSE was promoted by leading Financial

Institutions at the behest of the Government of India and was incorporated in

November 1992 as a tax-paying company unlike other stock exchanges in the

On its recognition as a stock exchange under the Securities Contracts

(Regulation) Act, 1956 in April 1993, NSE commenced operations in the

(Equities) segment commenced operations in November 1994 and operations in

Derivatives segment commenced in June 2000.

The NSE was set-up with the main objectives of:

• establishing a nation-wide trading facility for equities, debt instruments and

• ensuring equal access to investors all over the country through an

appropriate communication network,

using electronic trading systems,

• enabling shorter settlement cycles and book entry settlements systems,

• meeting the current international standards of securities markets.

become industry benchmarks and are being emulated by other market

guiding the industry towards new horizons and greater opportunities.

energy to constantly bring about change through innovation

companies and other financial intermediaries:

1. Industrial Development Bank of India Limited

2. Industrial Finance Corporation of India Limited