Initial Public Offering
Initial Public Offering
on the stock exchange by offering its securities to the public in the primary market. The object of an IPO may be relating to expansion of existing activities of the Company or setting up of new projects or any other object as may be specified by the Company in its offer document or just to get its existing equity shares listed by diluting the stake of existing equity shareholders through offer for sale. New Listing
New Listing is a process through which a company which is already listed on other stock exchange/s approaches the Exchange for listing of its equity shares. The companies fulfilling the eligibility criteria prescribed by the Exchange; from time to time; are listed on the Exchang
100% of the net offer to the public through book building process 75% of the net offer to the public through book building process and 25% at the price determined through book building. The Fixed Price portion is conducted like a normal public issue after the Book Built portion, during which the issue price is determined.
The concept of Book Building is relatively new in India. However it is a common practice in most developed countries.
Difference between Book Building Issue and Fixed Price Issue In Book Building securities are offered at prices above or equal to the floor prices, whereas securities are offered at a fixed price in case of a public issue. In case of Book Building, the demand can be known everyday as the book is built. But in case of the public issue the demand is known at the close of the issue.
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:
o o o
The company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR). The networth of the company has not been wiped out by the accumulated losses resulting in a negative networth The company has not received any winding up petition admitted by a court.
****Promoters mean one or more persons with minimum 3 years of experience of each of them in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally. 4. The applicant desirous of listing its securities should satisfy the exchange on the following: o No disciplinary action by other stock exchanges and regulatory authorities in past three years There shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past three years against the applicant company. In respect of promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) of the applicant company, there shall be no material regulatory or disciplinary action by a stock exchange or regulatory authority in the past one year. Redressal Mechanism of Investor grievance The points of consideration are: 1. The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) track record in redressal of investor grievances 2. The applicant's arrangements envisaged are in place for servicing its investor. 3. The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) general approach and philosophy to the issue of investor service and protection 4. defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders by the applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) shall also be considered while evaluating a company's application for listing. The auditor's certificate shall also be obtained in this regard. In case of defaults in such payments the securities of the applicant company may not be listed till such time it has cleared all pending obligations relating to the payment of interest and/or principal.
Distribution of shareholding The applicant's/promoting company(ies) shareholding pattern on March 31 of last three calendar years separately showing promoters and other groups' shareholding pattern should be as per the regulatory requirements. Details of Litigation The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) litigation record, the nature of litigation, status of litigation during the preceding three years period need to be clarified to the exchange. Track Record of Director(s) of the Company In respect of the track record of the directors, relevant disclosures may be insisted upon in the offer document regarding the status of criminal cases filed or nature of the investigation being undertaken with regard to alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of issuer have or has been charge-sheeted with serious crimes like murder, rape, forgery, economic offences etc.
Note: a) In case a company approaches the Exchange for listing within six months of an IPO, the securities may be considered as eligible for listing if they were otherwise eligible for listing at the time of the IPO. If the company approaches the Exchange for listing after six months of an IPO, the norms for existing listed companies may be applied and market capitalisation be computed based on the period from the IPO to the time of listing
6. 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. 7. 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.
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 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 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. Appendix 'H' - Listing Application providing details of securities. Appendix 'I' - Checklist for supporting documents submitted (as applicable). 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:
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 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; 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 reenactment 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; 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; 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 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. 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.
Supporting Documents
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.
Fees
The listing fee applicable from April 1, 2011 is as follows:
Particulars Initial Listing Fees Annual Listing Fees (based on paid up share, bond and/or debenture capital) Amount ( ) 50,000 18,000
Upto 5 Crore Above 5 Crore and upto 10 Crores Above 10 Crore and upto 20 Crores Above 20 Crore and upto 30 Crores Above 30 Crore and upto 40 Crores Above 40 Crore and upto 50 Crores Above 50 Crores and upto 100 Crores Above 100 Crore and upto 150 Crores Above 150 Crore and upto 200 Crores Above 200 Crore and upto 250 Crores Above 250 Crore and upto 300 Crores Above 300 Crore and upto 350 Crores Above 350 Crore and upto 400 Crores Above 400 Crore and upto 450 Crores Above 450 Crore and upto 500 Crores 31,500 57,500 90,000 1,00,000 1,05,000 1,75,000 2,00,000 2,40,000 2,75,000 3,10,000 3,40,000 3,75,000 4,35,000 5,00,000
Companies which have a paid up share, bond and/or debenture and/or debt capital, etc of more than 500 crores will have to pay a minimum fees of 5,00,000/- and an additional listing fees of 3,400/- for every increase of 5 crores or part thereof in the paid up share, bond and/ debenture and/or debt capital etc. Companies which have a paid up share, bond and/or debenture and/or debt capital, etc. of more than 1,000 crores will have to pay minimum fees of 8,50,000/- and an additional listing fees of 3,700/- for every increase of 5 crores or part thereof in the paid up share, bond and/or debenture and/or debt capital etc. The listing fees depend on the paid up share capital of the Company. Please draw your Cheques/Demand Drafts favouring National Stock Exchange of India Limited payable at Mumbai. Download Listing Agreement (zip) 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