Sharekhan Blog

Know the BSE Listing Requirements!

  • Mar 9, 2024

It lies at the heart of its functioning and the listing requirements that the companies have to meet to become publicly traded entities. These listing criteria act as the crucial crossroads, which enables only those companies that are strong financially, observe uncompromising compliance standards to get access to the exchange, and implement exceptional corporate governance practices.

Beyond adherence to the Bombay Stock Exchange company list requirements, it is a benchmark of a company's devotion to quality and the well-being of its stakeholders. By adhering to these standards, businesses express their readiness to work with accountability, transparency, and integrity, which in turn helps inspire trust among investors and stakeholders. On the other hand, the listing on the BSE makes a wide range of investors available, thus increasing liquidity and creating favorable conditions for capital investments.

As a result, enterprises that fulfill these prerequisites attract even more growth capital and enjoy increased recognition and credibility in the market. Thus, they are in a position to enjoy long-term success.

Ways of listing

  • New Listing (IPO/FPO): IPO is one of the processes of listing of bse ipo. It is the process through which the company can offer shares to the public market. FPO is a process through which an already listed company issues new shares, either to new investors or already existing shareholders.
  • Direct Listing: The procedure by which a company that is listed on other stock exchanges comes to BSE to get the shares listed, and that is called Direct Listing. It is split into even smaller sub-categories:
  • The companies that have an average daily trading turnover of over rs. 500cr in the immediate past’s equity segment financial year are listed on the nationwide Stock Exchange.
  • The companies that are a part of the SME platforms are seeking to get listed in BSE under the direct listing procedure. They are also willing to get migrated to the main board of the stock exchange so as to make it a point to be on the list.
  • Companies that moved from other exchanges to NSE were also listed initially on the platform of SME. They are also now trying to get listed on BSE under the direct listing.

Benefits of BSE Listing

The various benefits that a company can enjoy on being listed are:

  • Brings in liquidity and ready marketability of securities: Listing the stocks of a company on a stock exchange means that investors can buy stocks and sell these stocks in the open market. This also improves liquidity; thus, the firm's shares become easily accessible for trading.
  • Increases the company’s ability to raise capital: Listing the company on a stock exchange offers an opportunity for the company to raise new funds by introducing new shares through secondary offerings. Through these resources, an organization can use the funds for diverse purposes like increasing the size of the business, investing in R&D, or paying off debts.
  • Supervises and monitors trading of securities: Stock exchanges have regulators that prescribe trading activities so that markets are fair and orderly. An exchange listing of a company makes the business fall under the rules and regulations of such bodies.

BSE Listing Requirements

BSE listing requirements that a company must fulfill:

  • The BSE should get the authorization to use it in their prospectus.
  • Before filing the prospectus, it would require the companies to send an application letter to all the exchanges wherein the company intends to list its securities.
  • Allotment of the securities must be completed within 30 days of the subscription list closure in the case of the issue of book building.
  • The trading formalities shall be completed within 7 days of the close of allocations on all stock exchanges that the candidate has applied for.
  • The 1% of the amount issued will be deposited with the stock exchange designated for this purpose before the issue is opened.

The Bottom Line

BSE's listing criteria are the cornerstone of Indian capital markets, employing trust, transparency, and efficiency. Through the expectations of high financial performance, corporate governance, and compliance, the BSE upholds its intention for a balanced and sound market that contributes to a suitable environment for capital formation and wealth creation.

There are two important benefits of such requirements being implemented: companies become more attractive to potential investors, and they show their commitment to responsible management and sustainable development. In this regard, the observance of BSE's listing rules is not just a procedural requirement but a business strategy for companies seeking to be successful in the dynamic Indian business environment.

Team Sharekhan
by Team Sharekhan

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