Listing of securities 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 Criteria As per SEBI directive, an unlisted company may make an initial public offering (IPO) of equity shares or any other security which may be converted into or exchanged with equity shares at a later date, only if it meets all the following conditions: (a) The company should have net tangible assets of at least Rs. 3 crore in each of the preceding 3 full years (of 12 months each), of which not more than 50% is held in monetary assets; (b) The company should have a track record of distributable profits in terms of section 205 of the Companies Act, 1956, for at least three (3) out of immediately preceding five (5) years; (c) The company should have a net worth of at least Rs. 1 crore in each of the preceding 3 full years (of 12 months each); (d) In case the company has changed its name within the last one year, atleast 50% of the revenue for the preceding 1 full year is earned by the company from the activity suggested by the new name; and (e) The aggregate of the proposed issue and all previous issues made in the same financial year in terms of size (i.e. offer through offer document + firm allotment + promoters contribution through the offer document), does not exceed five (5) times its pre-issue networth as per the audited balance sheet of the last financial year. Listing agreement At the time of listing securities of a company on a stock exchange, the company is required to enter into a listing agreement with the exchange. The listing agreement specifies the terms and conditions of listing and the disclosures that shall be made by a company on a continuous basis to the exchange for the dissemination of information to the market. Disclosure of audit qualifications: SEBI has advised the Stock exchanges to modify the listing agreement to incorporate disclosure of audit qualifications. The same would include: disclosures of amounts at the year end and the maximum amount of loans/ advances/ investments outstanding during the year from both parent to subsidiary and vice versa, un-audited quarterly results of all listed companies should be subjected to Limited Review from the quarters ending on or after June 30, 2003, publication of consolidated financial results along with stand-alone financial results should be applicable on annual basis only. However, companies may have option to publish consolidated financial results along with stand alone financial results on a quarterly/half yearly basis, In addition to the above, the stock exchanges should also be required to inform SEBI in cases where companies have failed to remove audit qualifications.

Delisting of Securities SEBI (Delisting of Securities) Guidelines 2003 are applicable to delisting of securities of companies and specifically apply to: (a) Voluntary delisting being sought by the promoters of a company (b) Any acquisition of shares of the company (either by a promoter or by any other person) or scheme or arrangement, by whatever name referred to, consequent to which the public shareholding falls below the minimum limit specified in the listing conditions or listing agreement that may result in delisting of securities (c) Promoters of the companies who voluntarily seek to de-list their securities from all or some of the stock exchanges (d) Cases where a person in control of the management is seeking to consolidate his holdings in a company, in a manner which would result in the public shareholding in the company falling below the limit specified in the listing conditions or in the listing agreement that may have the effect of company being de-listed (e) Companies which may be compulsorily de-listed by the stock exchanges: provided that company shall not be permitted to use the buy-back provision to delist its securities. Voluntary Delisting Any promoter or acquirer desirous of delisting securities of the company under the provisions of these guidelines should obtain the prior approval of shareholders of the company by a special resolution passed at its general meeting, make a public announcement in the manner provided in these guidelines, make an application to the delisting exchange in the form specified by the exchange, and comply with such other additional conditions as may be specified by the concerned stock exchanges from where securities are to be de-listed. Any promoter of a company which desires to de-list from the stock exchange should determine an exit price for delisting of securities in accordance with the book building process as stated in the guidelines. The stock exchanges shall provide the infrastructure facility for display of the price at the terminal of the trading members to enable the investors to access the price on the screen to bring transparency to the delisting process. The stock exchange shall also monitor the possibility of price manipulation and keep under special watch the securities for which announcement for delisting has been made. Compulsory De-listing of Companies The stock exchanges may de-list companies which have been suspended for a minimum period of six months for non-compliance with the listing agreement. The stock exchanges have to give adequate and wide public notice through newspapers and also give a show cause notice to a company. The exchange shall provide a time period of 15 days within which representation may be made to the exchange by any person who may be aggrieved by the proposed delisting. Where the securities of the company are de-listed by an exchange, the promoter of the company should be liable to compensate the security holders of the company by paying them the fair value of the

securities held by them and acquiring their securities, subject to their option to remain security-holders with the company. Reinstatement of De-listed Securities Reinstatement of de-listed securities should be permitted by the stock exchanges with a cooling period of 2 years. It should be based on the respective norms/criteria for listing at the time of making the application for listing and the application should be initially scrutinized by the CLA. Listing of Securities on NSE NSE plays an important role in helping Indian companies access equity capital, by providing a liquid and well-regulated market. NSE has 1,381 (as on 31st March 2008) 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 newsvending agencies. 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. NSE trading terminals are now situated in 245 cities across the length and breadth 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. Benefits of Listing on NSE 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. (a) A premier marketplace: The sheer volume of trading activity ensures that the impact cost is lower on the Exchange 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. (b) Visibility: The trading system provides unparallel level of trade and post-trade information. The best 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. (c) Largest exchange: NSE is the largest exchange in the county in terms of trading volumes. NSE s reported turnover in the equities segment accounts for over 74 % of the total Indian securities market. (d) Unprecedented reach: NSE provides a trading platform that extends across the length and breadth of the country. The Exchange uses the latest communication technology to give instant access to investors from many locations. (e) Modern infrastructure: NSE introduced for the first time in India, fully automated screen based trading. The Exchange uses a sophisticated telecommunication network with trading terminals connected through VSATs (Very Small Aperture Terminals) and leased lines.

(f) Transaction speed: The speed at which the Exchange processes orders, results in liquidity and best available prices. The Exchange s trading system on an average processes large numbers of orders per minute. (g) Short settlement cycles: The exchanges follows a T+2 settlement cycle which is of international standards. (h) 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 s 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. (i) Trade statistics for listed companies: Listed companies are provided with monthly trade statistics for all the securities of the company listed on the Exchange. (j) Investor service centers: Investor-service centers opened by NSE across the country cater to the needs of investors. Listing criteria: The Exchange has laid down criteria for listing of new issues by companies through IPOs, companies listed on other exchanges in conformity with the Securities Contracts (Regulation) Rules, 1957 and directions of the Central Government and the Securities and Exchange Board of India (SEBI). The criteria include minimum paid-up capital and market capitalisation, company/promoter s track record, etc. The listing criteria for companies in the CM Segment are presented in Table 3.4. The issuers of securities are required to adhere to provisions of the Securities Contracts (Regulation) Act, 1956, the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992, and the rules, circulars, notifications, guidelines, etc. prescribed there under.