Listing Rules for New Companies on BSE /IPO Rules

The following eligibility criteria have been prescribed for the companies seeking permission to get listed on the stock exchange, effective August 1st 2006.

The companies are classified into two categories: Large Cap and Small Cap. A company is treated as a large cap company if the issue size is greater than or equal to Rs 10 crore and Market capitalization of not less than Rs 25 crore.

a) In case of Large Cap Companies

The minimum post-issue paid-up capital of the applicant company shall be Rs. 3 crore.
The minimum issue size shall be Rs. 10 crore; and
The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price).

Authorized capital is the amount for which a company has got the authorization from the regulatory body to raise through the issue. A company may or may not want to raise the full amount of authorized capital. Issue size is the amount that a company wants to raise funds through the issue. It’s always less than or equal to authorized capital.

Part payment facility may be available for the investors who want to subscribe to an issue. Post-issue paid-up capital is the value of subscriptions (including promoter’s holding) paid at the end of issue date. This will be less than issue size if the total subscriptions are less than the offered shares or when there is part payment facility available for the issue.

Market capitalization is the product of number of shares outstanding (including promoter’s holding) and the market price. In an IPO before the first day of listing the market price is the issue price.

b) In respect of Small Cap Companies

The minimum post-issue paid-up capital of the Company shall be Rs. 3 crore
The minimum issue size shall be Rs. 3 crore
The minimum market capitalization of the Company shall be Rs. 5 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price)
The minimum income/turnover of the Company shall be Rs. 3 crore in each of the preceding three 12-months period
The minimum number of public shareholders after the issue shall be 1000.
A due diligence study may be conducted by an independent team of Chartered Accountants or Merchant Bankers (Investment Bankers) appointed by BSE, the cost of which will be borne by the company. The requirement of a due diligence study may be waived if a financial institution or a scheduled commercial bank has appraised the project in the preceding 12 months.

In addition to this, the issuer company should have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs 20 crore.

c) For all companies

In respect of the requirement of paid-up capital and market capitalization, 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 capitalization (product of issue price and the post issue number of shares) requirement of BSE not being met, the securities of the issuer would not be listed on BSE.
The applicant, promoters and/or group companies, shall not be in default in compliance of the listing agreement.
The above eligibility criteria would be in addition to the conditions prescribed under SEBI (Disclosure and Investor Protection) Guidelines, 2000.

The above classification is only for the purpose of listing.

Note: The rules are taken from BSE website.

Rules to be Listed on BSE for Companies Already Listed on Other stock exchanges

July 26, 2008 | Filed Under Stocks

Comments

5 Responses to “Listing Rules for New Companies on BSE /IPO Rules”

sandeep patel on March 8th, 2009 1:26 pm

hi
i want informationa regaring the listing of share which are offered to the public for the frist time that in the IPO’s in the Indian share market

Plz mail me the information into my mail ID
Satyam on March 15th, 2009 2:57 pm

Hi Sandeep,

For list of latest IPOs please keep looking at http://www.nseindia.com/ ->IPO ->Current Issues at NSE

If you are looking for analysis of the companies that are coming to IPOs, at the moment we are not providing that service. Thank you.
hareesh on May 1st, 2010 8:32 am

I would like to know what is the eligibility of a company to go for an IPO & allso can the promoter retain the money from the ipo proceeds without investing in the company .
Satyam on May 2nd, 2010 12:12 pm

Hi Hareesh,

The eligibility details were given in the post. If you want exact details and looking for assistance to take your company to IPO please contact companies registered for that purpose.

How can the promoter retain the public money? Please don’t get influenced by fraudulent persons. It’s illegal and unethical.
hareesh on May 4th, 2010 9:23 am

Hi Satyam,

Thanks for your response. usually IPO proceeds are used for further expansion of business, to pay of the loan etc. what exactly i wanted to know is can a promoter exit the business through IPO routes. when this happens promoter will retain the funds with them without investing in the company?. i would like to get clarification on the same.

I would also like to know how the companies are valued. if my revenues are say 15crores on an average for last 3 years what would be my average valuation of the company.