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Listing

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Key Highlights

  • Listing refers to the process of a company’s securities being admitted for trading on a recognized stock exchange, such as the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange).

  • Types of listing includes initial, follow-on and dual listing.

What is Listing?

Listing refers to the process of a company’s securities being admitted for trading on a recognized stock exchange, such as the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange). It enables a company to offer its shares to the public, providing investors with the opportunity to buy, sell, and trade its securities in an open and regulated marketplace.

Purpose of Listing

The primary purpose of listing is to raise capital from public investors for business expansion, debt reduction, or strategic growth. Beyond fundraising, listing enhances corporate visibility, brand credibility, and market valuation. For investors, it provides liquidity, transparency, and regulated access to investment opportunities.

Types of Listing

  • Initial Listing: When a company offers its shares to the public for the first time through an Initial Public Offering (IPO).

  • Follow-on Listing: When an already-listed company issues additional securities or lists on another exchange.

  • Dual Listing: When a company’s shares are listed on more than one stock exchange, often across different countries, to access global investors.

Process of Listing

The listing process typically involves:

  • Preparing a Draft Red Herring Prospectus (DRHP) and obtaining regulatory approvals from SEBI (Securities and Exchange Board of India).

  • Fulfilling exchange eligibility requirements, including profitability and net worth criteria.

  • Completing due diligence, valuation, and book-building processes with the help of investment bankers.

  • Allotting shares and commencing trading post regulatory approval.

Benefits of Listing

  • Access to Capital: Enables companies to raise funds for growth and expansion.

  • Liquidity for Shareholders: Allows easy buying and selling of shares in a transparent market.

  • Enhanced Corporate Profile: Increases trust among investors, lenders, and partners.

  • Valuation Discovery: Market forces help determine fair value through demand and supply dynamics.