SUMMER TRAINING PROJECT REPORT ON

ON

“A STUDY ONLINE TRENDING OF SECURITIES IN

BOMBEY STOCK EXCHANGE AND NATIONAL STOCK
EXCHANGE”

SESSION : 2018-19

FOR THE PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF

Masters in Business Administration

UNDER THE GUIDANCE OF: UNDER THE SUPERVISION OF:

Dr. Ritesh Agarwal (CMA) Mr. Ashu Jaiswal

SUBMITTED BY
RAVI KUMAR
MBA 2018-19

KHANDELWAL COLLEGE OF MANAGEMENT AND TECHNOLOGY

APPROVED BY AICTE, MINISTRY OF GOVT. OF INDIA
BAREILLY

1
2
 CERTIFICATE

This is to certify that the project work done on () is a bonafide work carried out by

Mr./Ms. RAVI KUMAR under my supervision and guidance. The project report is

submitted towards the partial fulfillment of 2 year, wfull time Degree in Masters in

Business Administration.

This work has not been submitted anywhere else for any other degree/diploma. The

original work was carried during …………………. to …………… in (ShareKhan

Bareilly).

Name & Sign of Industry Guide Name & Sign of Faculty

Date :

Student’s Name and Sign

RAVI KUMAR

Roll No .

3
ACKNOWLEDGEMENT

The successful completion of that task would not be completed without the expression of
gratitude to the people who made it possible. I take this opportunity to acknowledge all
those who guided, encouraged and helped me in winding up this summer training project
report.
I feel greatly honored for having done my summer training project report. I thank them
with full zeal and enthusiasm that they gave this big opportunity to me.
Last but not the least; I would like to extend my deep sense of gratitude and thanks to my
Parents, Friends and God in successful completion of this summer training project report.

RAVI KUMAR
MBA III SEM
ROLL NO.___________

4
 DECLARATION

I, RAVI KUMAR , a student of KHANDELWAL COLLEGE OF MANAGEMENT

SCEINCE & TECHNOLOGY, BAREILLY hereby declare that this Summer Training
Project Report is the record of authentic work carried out by me during the academic year
2018 and has not been submitted to any other university or institute towards the awards
of any degree .An attempt has been made by me to provide all relevant and important
details regarding the topic to support the theoretical advice with concrete research
evidence. This will be helpful to clean the fog surrounding the various aspect of the topic.
I hope that this project will be beneficial.

RAVI KUMAR
MBA III SEM
ROLL NO.___________

5
 PREFACE

“Learning Categories You, and practicing on that learning specialize you “ .

The importance of any academic courses would gain advantage and the acceptance of the

true form, only through practical experiences. Hence it is quite necessary to put theories as

into task. This is made possible with the summer training at any of the companies under the

expert guidance of a competent person.

The students are required to submit a report on the work done and knowledge gained

during this period. The report is evaluated and marks awarded as per the contents in the

report.

I was asked to work on project “Comparison of listing procedure between NSE & BSE.”

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 TABLE OF CONTENTS

 ACKNOWLEDGEMENT 4

 OBJECTIVE 5

 PREFACE 7

 METHODOLOGY 8

 NATIONAL STOCK EXCHANGE 9

 ABOUT NSE 10

 NSE MILESTONES 11

 CORPORATE STRUCTURE 17

 NSE GROUP 31

 NSE TECHNOLOGY 36

 EQUITIES 39

 LISTING 40

 LISTING PROCEDURE ON NSE 41

 ELIGIBILITY CRITERIA FOR LISTING ON NSE 55

 BOMBAY STOCK EXCHANGE 72

 ABOUT BSE 73

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 LISTING OF SECURITIES ON BSE 86

 ANALYSIS AND INTERPRETATION 103

 LISTING BENEFITS 112

 CONCLUSION 117

 FINDINGS 118

 LIMITATIONS 119

 BIBLIOGRAPHY 120

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 OBJECTIVE

The main objective of this project is to gain an insight of National Stock Exchange &
Bombay Stock Exchange towards the listing procedure and to explore the benefits of
listing on the stock exchanges with a comparative study.

SCOPE

 The project would help a company to make familiar with listing procedure on

NSE & BSE.

 The project would also tell the benefits of listing on the stock exchanges for

raising funds through equity share capital.

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 METHODOLOGY

The methodology used for the implementation of the assigned project is based on

secondary data & with the help of custom type pie explosion chart.

LIMITATIONS

The limitations of this project arise from the time period assigned to me in this project.
Since I had to work only for two months.

This project merely tells about the listing procedure of equities on NSE & BSE.

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 PREFACE

“Learning Categories You, and practicing on that learning specialize you “ .

The importance of any academic courses would gain advantage and the acceptance of the

true form, only through practical experiences. Hence it is quite necessary to put theories as

into task. This is made possible with the summer training at any of the companies under the

expert guidance of a competent person.

The students are required to submit a report on the work done and knowledge gained

during this period. The report is evaluated and marks awarded as per the contents in the

report.

I was asked to work on project “Comparison of listing procedure between NSE & BSE.”

11
 METHODOLOGY

The methodology used for the implementation of the assigned project is based on

secondary data and with the help of custom type pie explosion chart.

Research design for the descriptive study is of exploratory type and the forms is

given to discover the possible measure by detailed analysis this report also based on

descriptive research because it provide the detailed knowledge about the BSE and NSE

and its listing procedure.

Secondary data is to be used in the research, have been collected from various

magazines, news paper, web sites and other source.

Research design: descriptive type and analytical type

Data collection method : secondary data collect method.

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NATIONAL STOCK EXCHANGE

13
 ABOUT NSE

The National Stock Exchange (NSE) is India's leading stock exchange covering various

cities and towns across the country. NSE was set up by leading institutions to provide a

modern, fully automated screen-based trading system with national reach. The Exchange

has brought about unparalleled transparency, speed & efficiency, safety and market

integrity. It has set up facilities that serve as a model for the securities industry in terms of

systems, practices and procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of

microstructure, market practices and trading volumes. The market today uses state-of-art

information technology to provide an efficient and transparent trading, clearing and

settlement mechanism, and has witnessed several innovations in products & services viz.

demutualisation of stock exchange governance, screen based trading, compression of

settlement cycles, dematerialisation and electronic transfer of securities, securities

lending and borrowing, professionalisation of trading members, fine-tuned risk

management systems, emergence of clearing corporations to assume counterparty risks,

market of debt and derivative instruments and intensive use of information technology.

NSE MILESTONES

November 1992 Incorporation

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April 1993 Recognition as a stock exchange
May 1993 Formulation of business plan
June 1994 Wholesale Debt Market segment goes live
November 1994 Capital Market (Equities) segment goes live
March 1995 Establishment of Investor Grievance Cell
April 1995 Establishment of NSCCL, the first Clearing Corporation
June 1995 Introduction of centralised insurance cover for all trading members
July 1995 Establishment of Investor Protection Fund
October 1995 Became largest stock exchange in the country
April 1996 Commencement of clearing and settlement by NSCCL
April 1996 Launch of S&P CNX Nifty
June 1996 Establishment of Settlement Guarantee Fund
Setting up of National Securities Depository Limited, first depository
November 1996
in India, co-promoted by NSE
November 1996 Best IT Usage award by Computer Society of India
December 1996 Commencement of trading/settlement in dematerialised securities
December 1996 Dataquest award for Top IT User
December 1996 Launch of CNX Nifty Junior
February 1997 Regional clearing facility goes live
November 1997 Best IT Usage award by Computer Society of India
Promotion of joint venture, India Index Services & Products Limited
May 1998
(IISL)
May 1998 Launch of NSE's Web-site: www.nse.co.in
July 1998 Launch of NSE's Certification Programme in Financial Market
August 1998 CYBER CORPORATE OF THE YEAR 1998 award
February 1999 Launch of Automated Lending and Borrowing Mechanism
April 1999 CHIP Web Award by CHIP magazine
October 1999 Setting up of NSE.IT
January 2000 Launch of NSE Research Initiative
February 2000 Commencement of Internet Trading

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June 2000 Commencement of Derivatives Trading (Index Futures)
September 2000 Launch of 'Zero Coupon Yield Curve'
Launch of Broker Plaza by Dotex International, a joint venture
November 2000
between NSE.IT Ltd. and i-flex Solutions Ltd.
December 2000 Commencement of WAP trading
June 2001 Commencement of trading in Index Options
July 2001 Commencement of trading in Options on Individual Securities
November 2001 Commencement of trading in Futures on Individual Securities
December 2001 Launch of NSE VaR for Government Securities
January 2002 Launch of Exchange Traded Funds (ETFs)
NSE wins the Wharton-Infosys Business Transformation Award in
May 2002
the Organization-wide Transformation category
October 2002 Launch of NSE Government Securities Index
January 2003 Commencement of trading in Retail Debt Market
June 2003 Launch of Interest Rate Futures
August 2003 Launch of Futures & options in CNXIT Index
June 2004 Launch of STP Interoperability
August 2004 Launch of NSE’s electronic interface for listed companies
June 2005 Launch of Futures & options in BANK Nifty Index

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 THE ORGANISATION

The National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchanges, which recommended

promotion of a National Stock Exchange by financial institutions (FIs) to provide access

to investors from all across the country on an equal footing. Based on the

recommendations, NSE was promoted by leading Financial Institutions at the behest of

the Government of India and was incorporated in November 1992 as a tax-paying

company unlike other stock exchanges in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act,

1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)

segment in June 1994. The Capital Market (Equities) segment commenced operations in

November 1994 and operations in Derivatives segment commenced in June 2000.

Mission

NSE's mission is setting the agenda for change in the securities markets in India. The

NSE was set-up with the main objectives of:

 establishing a nation-wide trading facility for equities, debt instruments and

hybrids,

 ensuring equal access to investors all over the country through an appropriate

communication network,

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  providing a fair, efficient and transparent securities market to investors using

electronic trading systems,

 enabling shorter settlement cycles and book entry settlements systems, and

 meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become

industry benchmarks and are being emulated by other market participants. NSE is more

than a mere market facilitator. It's that force which is guiding the industry towards new

horizons and greater opportunities.

Logo

The logo of the NSE symbolises a single nationwide securities trading facility ensuring

equal and fair access to investors, trading members and issuers all over the country. The

initials of the Exchange viz., N, S and E have been etched on the logo and are distinctly

visible. The logo symbolises use of state of the art information technology and satellite

connectivity to bring about the change within the securities industry. The logo symbolises

vibrancy and unleashing of creative energy to constantly bring about change through

innovation

PROMOTERS

NSE has been promoted by leading financial institutions, banks, insurance companies and

other financial intermediaries:

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1. Industrial Development Bank of India Limited

2. Industrial Finance Corporation of India Limited

3. Life Insurance Corporation of India

4. State Bank of India

5. ICICI Bank Limited

6. IL & FS Trust Company Limited

7. Stock Holding Corporation of India Limited

8. SBI Capital Markets Limited

9. The Administrator of the Specified Undertaking of Unit Trust of India

10. Bank of Baroda

11. Canara Bank

12. General Insurance Corporation of India

13. National Insurance Company Limited

14. The New India Assurance Company Limited

15. The Oriental Insurance Company Limited

16. United India Insurance Company Limited

17. Punjab National Bank

18. Oriental Bank of Commerce

19. Corporation Bank

20. Indian Bank

21. Union Bank of India

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 CORPORATE STRUCTURE

NSE is one of the first de-mutualised stock exchanges in the country, where the

ownership and management of the Exchange is completely divorced from the right to

trade on it. Though the impetus for its establishment came from policy makers in the

country, it has been set up as a public limited company, owned by the leading institutional

investors in the country.

From day one, NSE has adopted the form of a demutualised exchange - the ownership,

management and trading is in the hands of three different sets of people. NSE is owned

by a set of leading financial institutions, banks, insurance companies and other financial

intermediaries and is managed by professionals, who do not directly or indirectly trade on

the Exchange. This has completely eliminated any conflict of interest and helped NSE in

aggressively pursuing policies and practices within a public interest framework.

The NSE model however, does not preclude, but in fact accommodates involvement,

support and contribution of trading members in a variety of ways. Its Board comprises of

senior executives from promoter institutions, eminent professionals in the fields of law,

economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI

and one full time executive of the Exchange.

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While the Board deals with broad policy issues, decisions relating to market operations

are delegated by the Board to various committees constituted by it. Such committees

include representatives from trading members, professionals, the public and the

management. The day-to-day management of the Exchange is delegated to the Managing

Director who is supported by a team of professional staff.

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 BOARD OF DIRECTORS

Chairman Mr. S. B. Mathur

Administrator of the Specified

Undertaking of

Unit Trust of India

Managing Director Mr. Ravi Narain

National Stock Exchange of India

Ltd.

Deputy Managing Director Ms. Chitra Ramkrishna

National Stock Exchange of India

Ltd.

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 Directors
Mr. S. P. Chhajed
Partner
M/s. Chhajed & Doshi
Chartered Accountants
Mr. S. H. Khan
Chairman
Feedback First Urban Infrastructure
Development Comp. Ltd.
Mr. Anand G. Mahindra
Vice Chairman & Managing Director
Mahindra & Mahindra Ltd
Mr. Indrajit Gupta
Managing Director & CEO
SBI Capital Markets Ltd.
Mr. Justice M.L. Pendse (Retd.)
Former Chief Justice of Karnataka High
Court
and Judge of Bombay High Court
Mr. R. N. Bhardwaj
Chairman
Life Insurance Corporation of India
Dr. R. H. Patil
Chairman
The Clearing Corporation of India Ltd.
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Mr. R. P. Chitale
Managing Partner
M/s. M.P.Chitale & Co.
Chartered Accountants
Prof. (Dr.) K.R.S.Murthy
Professor and Former Director
Indian Institute of Management, Bangalore
Mr. N.S. Kannan
Chief Financial Officer & Treasurer
ICICI Bank Ltd
Mr. A. P. Kurian
Chairman
Association of Mutual Funds in India
Mr. Ravi Parthasarathy
Chairman & Managing Director
Infrastructure Leasing & Financial
Services Ltd
Mr. M. Raghavendra
Ex-General Manager
General Insurance Corporation of India
Mr. S.Venkiteswaran
Sr. Advocate &
Mr. Y. H. Malegam
Chartered Accountant
 COMMITTEES

The Exchange has constituted various committees to advise it on areas such as good

market practices, settlement procedures, risk containment systems etc. These committees

are manned by industry professionals, trading members, Exchange staff as also

representatives from the market regulator.

 Executive Committee

 Committee On Trade Related Issues (COTI)

 Advisory Committee - Listing of Securities

Executive Committee

Objective: To manage the day-to-day operations of the Exchange

Composition:

1. Mr. Ravi Narain Chairman

Managing Director

National Stock Exchange of India Ltd.

2. Mr. Mukesh Kansal Trading Member

Managing Director

M/s. K & A Securities (P) Ltd.

3. Mr. Hemang Raja Trading Member

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 Managing Director

M/s IL&FS Investsmart Ltd.

4. Mr. Shailesh Saraf Trading Member

Wholetime Director

M/s. Dynamic Equities Pvt. Ltd.

5. Mr. C.Parthasarathy Trading Member

Director

M/s. Karvy Stock Broking Ltd.

6. Mr. R. P. Chitale Public Representative

Managing Partner

M/s. M. P. Chitale & Co. Chartered Accountants

7. Mr. Y. H. Malegam Public Representative

Chartered Accountant

8. Mr. S. Venkiteswaran Public Representative

Sr. Advocate

9. Ms. Chitra Ramkrishna Other Nominee

Deputy Managing Director

National Stock Exchange of India Ltd.

10. Mr. P. M. Venkatasubramanian Other Nominee

Ex-Managing Director, GIC

11. Mr. N.S.Kannan Other Nominee

Chief Financial Officer & Treasurer

ICICI Bank Limited

For Futures & Options Segment

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1. Mr. Ravi Narain Chairman

Managing Director

National Stock Exchange of India Ltd.

2. Mr. Shitin D Desai Trading Member

Executive Vice Chairman

M/s. DSP Merrill Lynch Ltd.

3. Mr. Vineet Bhatnagar Trading Member

Managing Director

M/s Refco-Sify Securities India (Pvt.) Ltd.

4. Mr. D.C.Anjaria Public Representative

Director

International Finance Solutions Pvt. Ltd.

5. Mr. Shailesh Haribhakti Public Representative

Partner

M/s. Haribhakti & Co.

6. Prof. V. Ravi Anshuman Public Representative

Indian Institute of Management

Bangalore

7. Mr. M. Raghavendra Other Nominee

Ex-General Manager

General Insurance Corporation of India

8. Ms. Chitra Ramkrishna Other Nominee

Deputy Managing Director

National Stock Exchange of India Ltd.

9. Mr. M. L. Soneji Other Nominee

26
Director (Operations & Surveillance)

National Stock Exchange of India Ltd.

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 COMMITTEE ON TRADE ISSUES (COTI)

Objective: To provide guidance on trade related issues which crop up

during the day-to-day functioning of the Exchange Composition:

Mr. Atul Kumar Mr. S.Ramasubramanian

Managing Director Partner

Practical Financial Services Pvt. Ltd. M/s. Venkatraman & Co

(Chairman of the committee)

. Mr. Dhiraj Single Mr. Dikul Patel

Head of Market Operations Executive Director

ASK Raymond James Financial Services JK Securities Pvt. Limited

(I) Ltd.
Mr. Shreekant Phumbhra Mr. G V Nageswara Rao

Proprietor Managing Director

Shreekant Phumbhra IDBI Capital Market Services Ltd.

Mr. Ashok Kakkar Mr. Ketan H. Marwadi

Wholetime Director Managing Director

Vivek Financial Focus Ltd. Marwadi Shares & Finance Pvt. Ltd.
Mr.K. Ravindra Babu Mr. Ravindra Kumar Agrawal

Managing Director Wholetime Director

Zen Securities Ltd. Shri Parashram Holdings P. Ltd.

ADVISORY COMMITTEE - LISTING OF SECURITIES

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Objective: To advise NSE on

 The suitability of the Companies for listing on the Exchange within the

parameters set out by the listing agreement

 To ensure that the applicant company has complied with all the conditions set out

in the listing agreement as well as other formalities, SEBI regulations, etc.

 Systems and procedures to be adopted for listing of securities

Composition:

1 Mr. N Ganga Ram

Former Executive Director, Industrial Development Bank of India

2 Mr. Uday Kotak

Executive Vice Chairman and Managing Director,

Kotak Mahindra Bank Ltd.

3 Mr. M R Mondkar

Chairman, Mondkar Computers Pvt. Ltd.

4 Mr. S Ramadorai

Chief Executive Officer, Tata Consultancy Services

5 Mr. Prithvi Haldea

Managing Director, Prime Database

Praxis Cons. & Information Services Pvt. Ltd.

6 Mr. Prakash Karnik

Director-Asia, Electrapartners Asia Pvt. Ltd.

7 Mr. S.V. Prasad

Chief Executive Officer, Birla Sunlife Mutual Fund

8 Mr. Pradip P. Shah

29
 Chairman, Indasia Fund Advisors Pvt. Ltd.
9 Mr. Vimal Bhandari

Executive Director, Infrastructure Leasing & Financial Services Ltd.

10 Mr. J. Ravichandran

Company Secretary & Sr.Vice President

National Stock Exchange of India Ltd.

11. Mrs. Chitra Ramkrishna

Deputy Managing Director, Head of Listing

National Stock Exchange of India Ltd.

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Management Team (Personal Staff)

Mr. Ravi Narain MANAGING DIRECTOR & CHIEF EXECUTIVE

OFFICER

Ms. Chitra Ramkrishna Deputy Managing Director

Mr. J Ravichandran Director

Legal & Secretarial , Inspection, Finance & Accounts

Mr. M L Soneji Director

Capital Market (Trade & Surveillance), F&O (Trade &

Surveillance), WDM (Trade & Surveillance), IPO and

Investigation

Mr. R Sundararaman Vice President

NSCCL - F&O Clearing, Risk Management &

Collaterals

Mr. Yatrik R Vin Vice President

Finance & Accounts

Mr. A Sebastin Asst. Vice President

Risk Management

Mr. Arup Mukherjee Asst. Vice President

NCFM & Economic Analysis & policy

Mr. C. N. Upadhyay Asst. Vice President

Inspection

Mr. D Satish Kumar Asst. Vice President

Legal

Mr. Dhruvkumar Patil Asst. Vice President

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 Arbitration, Defaulters Section & Investor Grievances

Mr. Mahesh Haldipur Asst. Vice President

Premises

Mr. Narendra Kumar Ahlawat Asst. Vice President

NSCCL - Development

Mr. Nayan Mehta Asst. Vice President

Finance & Accounts

Mr. Suresh Narayan Asst. Vice President

India Index Services & Products Ltd.

Mr. R Jayakumar Asst. Vice President

Secretarial

Mr. R Nanda Kumar Asst. Vice President

Development

Mr. Ravi Varanasi Asst. Vice President

Investigation & Surveillance

Ms. T S Jagadharini Asst. Vice President

Listing & Membership

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 NSE Group

NSCCL

IISL NSE.IT

NSE

DotEx Intl. Ltd. NSDL

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 National Securities Clearing Corporation Ltd. (NSCCL)

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary

of NSE, was incorporated in August 1995. It was set up to bring and sustain confidence in

clearing and settlement of securities; to promote and maintain, short and consistent

settlement cycles; to provide counter-party risk guarantee, and to operate a tight risk

containment system. NSCCL commenced clearing operations in April 1996.

NSCCL carries out the clearing and settlement of the trades executed in the Equities and

Derivatives segments and operates Subsidiary General Ledger (SGL) for settlement of

trades in government securities. It assumes the counter-party risk of each member and

guarantees financial settlement. It also undertakes settlement of transactions on other

stock exchanges like, the Over the Counter Exchange of India.

NSCCL has successfully brought about an up-gradation of the clearing and settlement

procedures and has brought Indian financial markets in line with international markets.

34
 NSE.IT Ltd.

NSE.IT, a 100% subsidiary of National Stock Exchange of India Limited (NSE), is the

information technology arm of the largest stock exchange of the country. A leading edge

technology user, NSE houses state-of-the-art infrastructure and skills. NSE.IT possesses

the wealth of expertise acquired in the last six years by running the trading and clearing

infrastructure of largest stock exchange of the country. NSE.IT is uniquely positioned to

provide products, services and solutions for the securities industry. There has been a long

felt need for top-of-the-line products, services and solutions in the area of trading, broker

front-end and back-office, clearing and settlement, web-based trading, risk management,

treasury management, asset liability management, banking, insurance etc. NSE.IT's

expertise in these areas is the primary focus. The company also plans to provide

consultancy and implementation services in the areas of Data Warehousing, Business

Continuity Plans, Stratus Mainframe Facility Management, Site Maintenance and

Backups, Real Time Market Analysis & Financial News over NSE-Net, etc.

NSE.IT is an Export Oriented Unit with STP and plans to go global for various IT

services in due course. In the near future the company plans to release new products for

Broker Back-office Operations and enhance NeatXS / Neat iXS to support Straight

Through Processing on the net.

35
 India Index Services & Products Ltd. (IISL)

India Index Services and Products Limited (IISL), a joint venture between NSE and

CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited), was set

up in May 1998 to provide a variety of indices and index related services and products for

the Indian capital markets. It has a consulting and licensing agreement with Standard and

Poor's (S&P), the world's leading provider of investible equity indices, for co-branding

equity indices.

IISL provides a broad range of services, products and professional index services. It

maintains over 80 equity indices comprising broad-based benchmark indices, sectoral

indices and customised indices. Many investment and risk management products based

on IISL indices have been developed in the recent past, within India and abroad. These

include index based derivatives traded on NSE and Singapore Exchange (SIMEX) and a

number of index funds

National Securities Depository Ltd. (NSDL)

In order to solve the myriad problems associated with trading in physical securities, NSE

joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of

India (UTI) to promote dematerialisation of securities. Together they set up National

Securities Depository Limited (NSDL), the first depository in India.

36
NSDL commenced operations in November 1996 and has since established a national

infrastructure of international standard to handle trading and settlement in dematerialised

form and thus completely eliminated the risks to investors associated with fake/bad/stolen

paper.

DotEx International Limited

DotEx was formed to provide world-class internet trading platforms which allows

members of NSE to offer online trading facilities to their customers. Members of NSE

can service a larger clientele by using the automated risk management features and thus

increase volumes. Investors get comprehensive and updated information necessary to

trade, along with a single-click convenience to fulfil their obligations. The initial offering

of DotEx is DotEx Plaza where multiple market participants such as members of NSE,

depository participants and banks can offer web-based services to their customers. As a

neutral aggregator and infrastructure provider, DotEx offers choice and convenience to

investors. DotEx was a joint venture between i-flex Solutions Ltd. and NSE.IT Ltd.

Recently NSE has taken over the shareholding and management of DotEx.

DotEx products may be classified under the following broad categories:

 Equity Trading Module

 F&O Trading Module.

37
 NSE Technology

Across the globe, developments in information, communication and network

technologies have created paradigm shifts in the securities market operations. Technology

has enabled organisations to build new sources of competitive advantage, bring about

innovations in products and services, and to provide for new business opportunities.

Stock exchanges all over the world have realised the potential of IT and have moved over

to electronic trading systems, which are cheaper, have wider reach and provide a better

mechanism for trade and post trade execution.

NSE believes that technology will continue to provide the necessary impetus for the

organisation to retain its competitive edge and ensure timeliness and satisfaction in

customer service. In recognition of the fact that technology will continue to redefine the

shape of the securities industry, NSE stresses on innovation and sustained investment in

technology to remain ahead of competition. NSE's IT set-up is the largest by any

company in India. It uses satellite communication technology to energise participation

from around 400 cities spread all over the country. In the recent past, capacity

enhancement measures were taken up in regard to the trading systems so as to effectively

meet the requirements of increased users and associated trading loads. With upgradation

of trading hardware, NSE can handle up to 1 million trades per day. NSE has also put in

place NIBIS (NSE's Internet Based Information System) for on-line real-time

dissemination of trading information over the internet. In order to capitalise on in-house

expertise in technology, NSE set up a separate company, NSE.IT, in October 1999. This

is expected to provide a platform for taking up new IT assignments both within and

outside India and attaining global exposure.

38
NEAT is a state-of-the-art client server based application. At the server end, all trading

information is stored in an in-memory database to achieve minimum response time and

maximum system availability for users. The trading server software runs on a fault

tolerant STRATUS main frame computer while the client software runs under Windows

on PCs.

The telecommunications network uses X.25 protocol and is the backbone of the

automated trading system. Each trading member trades on the NSE with other members

through a PC located in the trading member's office, anywhere in India. The trading

members on the Wholesale Debt Market segment are linked to the central computer at the

NSE through dedicated 64Kbps leased lines and VSAT terminals. These leased lines are

multiplexed using dedicated 2 Mbps, optical-fibre links. The WDM participants connect

to the trading system through dial-up links.

The Exchange uses powerful RISC -based UNIX servers, procured from Digital and HP

for the back office processing. The latest software platforms like ORACLE 7 RDBMS,

GUPTA - SQL/ORACLE FORMS 4.5 Front - Ends, etc. have been used for the Exchange

applications. The Exchange currently manages its data centre operations, system and

database administration, design and development of in-house systems and design and

implementation of telecommunication solutions.

NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it

supports more than 3000 VSATs and is expected to grow to more than 4000 VSATs in the

next year. The NSE- network is the largest private wide area network in the country and

the first extended C- Band VSAT network in the world. Currently more than 9000 users

39
are trading on the real time-online NSE application. There are over 15 large computer

systems which include non-stop fault-tolerant computers and high end UNIX servers,

operational under one roof to support the NSE applications. This coupled with the nation

wide VSAT network makes NSE the country's largest Information Technology user.

In an ongoing effort to improve NSE's infrastructure, a corporate network has been

implemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This

corporate network enables speedy inter-office communications and data and voice

connectivity between offices.

In keeping with the current trend, NSE has gone online on the Internet. Apart from

having a 2mbps link to VSNL and our own domain for internal browsing and e-mail

purposes, we have also set up our own Web site. Currently, NSE is displaying its live

stock quotes on the web site (www.nseindia.com) which are updated online.

Equities

NSE started trading in the equities segment (Capital Market segment) on November 3,

1994 and within a short span of 1 year became the largest exchange in India in terms of

volumes transacted.

Trading volumes in the equity segment have grown rapidly with average daily turnover

increasing from Rs.17 crores during 1994-95 to Rs.4,328 crores during 2003-04. During

the year 2003-04, NSE reported a turnover of Rs.1,099,535 crores in the equities segment

accounting for 68.60% of the total Indian securities market.

40
The Equities section provides you with an insight into the equities segment of NSE and

also provides real-time quotes and statistics of the equities market. In-depth information

regarding listing of securities, trading systems & processes, clearing and settlement, risk

management, trading statistics etc are available here.

41
 LISTING

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 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. NSE trading terminals are now situated in

various cities and towns across the length and breath 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.

NSE plays an important role in helping an Indian companies access equity capital, by

providing a liquid and well-regulated market. NSE has about 800 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 news-vending agencies.

42
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

LISTING PROCEDURE

An Issuer has to take various steps prior to making an application for listing its securities

on the NSE. These steps are essential to ensure the compliance of certain requirements by

the Issuer before listing its securities on the NSE. The various steps to be taken include:

1. Initial Discussions

2. Approval of Memorandum and Articles of Association

3. Approval of draft prospectus

4. Submission of Application

5. Listing conditions and requirements

43
 LISTING PROCEDURE

Initial Discussions

Authorised persons of the concerned Issuer should hold discussions with NSE personnel

regarding various requirements to be fulfilled by the Issuer for listing its securities. The

discussions should particularly cover the qualifications of the Issuer which are required

for an Issuer to be admitted for listing on the NSE and to understand all the conditions

that are precedent to listing on the NSE. The proposed Memorandum & Articles of

Association and the draft prospectus may be presented to the NSE for examination before

finalising them.

44
 LISTING PROCEDURE

Approval of Memorandum and Articles of Association

Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that the

Articles of Association of the Issuer wanting to list its securities must contain provisions

as given hereunder.

The Articles of Association of an Issuer shall contain the following provisions namely:

a. that there shall be no forfeiture of unclaimed dividends before the claim becomes

barred by law;

b. that a common form of transfer shall be used;

c. that fully paid shares shall be free from all lien and that in the case of partly paid

shares the Issuer's lien shall be restricted to moneys called or payable at a fixed

time in respect of such shares;

d. that registration of transfer shall not be refused on the ground of the transferor

being either alone or jointly with any other person or persons indebted to the

Issuer on any account whatsoever;

e. that any amount paid up in advance of calls on any share may carry interest but

shall not in respect thereof confer a right to dividend or to participate in profits;

f. 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.

45
 g. 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.

46
 Listing Procedure

Approval of draft prospectus

The Issuer shall file the draft prospectus and application forms with NSE. In case NSE is

not the Regional Stock Exchange then the draft prospectus and application forms have to

be filed simultaneously with the NSE when the same is filed with the Regional Stock

Exchange pertaining to the issue, for the perusal of NSE. The draft prospectus should

have been prepared in accordance with the statutes, notifications, circulars, guidelines,

etc. governing preparation and issue of prospectus prevailing at the relevant time. The

Issuers may particularly bear in mind the provisions of Companies Act, Securities

Contracts (Regulation) Act, the SEBI Act and the relevant subordinate legislations

thereto. NSE will peruse the draft prospectus only from the point of view of checking

whether the draft prospectus is in accordance with the listing requirements, and therefore

any approval given by NSE in respect of the draft prospectus should not be construed as

approval under any laws, rules, notifications, circulars, guidelines etc. The Issuers shall

file a copy of the draft prospectus given by the respective Regional Stock Exchange with

NSE. The Issuer should also submit the SEBI acknowledgment card or letter indicating

observations on draft prospectus or letter of offer by SEBI

47
 Listing Procedure

Submission of Application

 For Issuers listing on NSE for the first time

 Listing of further Issues by Issuers already listed on NSE

 Listing Fees

 Security deposit (for new & fresh issues and when NSE is the Regional Stock

Exchange)

 Supporting documents

Listing Procedure

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.

48
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 Procedure

Submission of Application (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)

49
 Listing Fees

The listing fees depend on the paid up share capital of your Company:

Particulars Amount (Rs.)

Initial Listing Fees 7,500

Annual Listing Fees

Companies with paid up share and/or debenture capital:

Of Rs.1 crore 4,200

Above Rs.1 crore and up to Rs.5 crores 8,400

Above Rs.5 crores and up to Rs.10 crores 14,000

Above Rs.10 crores and up to Rs.20 crores 28,000

Above Rs.20 crores and up to Rs.50 crores 42,000

Above Rs.50 crores 70,000

Companies which have a paid up capital of more than Rs. 50 crores will pay additional

listing fees of Rs. 1400 for every increase of Rs. 5 crores or part thereof in the paid up

share/debenture capital.

Kindly draw your Cheques/Demand Drafts favouring National Stock Exchange of India

Limited, payable in Mumbai.

50
 Listing Procedure

Submission of Application (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:

1. 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

51
 for admission to dealings of the securities, within the prescribed or stipulated

period;

2. 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 re-enactment 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;

3. 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;

4. 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

52
 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.

5. 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.

53
 LISTING PROCEDURE

Submission of Application (Supporting Documents)

Issuers applying for admission of their securities to dealings on the NSE shall submit to

the NSE the following:

 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.

54
 Listing Procedure

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.

After fulfilling these criteria, a company has to send the following information for further

processing:

1. A brief note on the promoters and management.

2. Company profile.

3. Copies of the Annual Report for last 3 years.

4. Copies of the Draft Offer Document.

5. Memorandum & Articles of Association.

55
 ELIGIBILITY CRITERIA FOR LISTING

An applicant who desires listing of its securities with NSE must fulfill the following pre-

requisites:

A. For Initial Public Offerings (IPOs)

B. For Securities of Existing Companies

NSE staff welcome the opportunity to discuss a company’s eligibility to list before a

formal application is made. On fulfillment of the eligibility criteria, the company is

required to fill in the listing application form.

56
 ELIGIBILITY CRITERIA FOR LISTING

IPOs by Companies

Qualifications for listing Initial Public Offerings (IPO) are as below:

1. Paid up Capital

The paid up equity capital of the applicant shall not be less than Rs. 10 crores * and

the capitalisation of the applicant’s equity shall not be less than Rs. 25 crores**

In respect of the requirement of paid-up capital and market capitalisation, 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 capitalisation (Product of issue price and the

post issue number of shares) requirement of the Exchange not being met, the

securities of the issuer would not be listed on the Exchange.

* For this purpose, the post issue paid up equity capital for which listing is sought

shall be taken into account.

**For this purpose, capitalisation will be the product of the issue price and the post

issue number of equity shares.

2. Conditions Precedent to Listing:

57
The Issuer shall have adhered to conditions precedent to listing as emerging from

inter-alia from Securities Contracts (Regulations) Act 1956, Companies Act 1956,

Securities and Exchange Board of India Act 1992, any rules and/or regulations

framed under foregoing statutes, as also any circular, clarifications, guidelines issued

by the appropriate authority under foregoing statutes.

3. At least three years track record of either:

a. The applicant seeking listing; or

b. The promoters*/promoting company, incorporated in or outside India

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:

• 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 accepted 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

58
4. The Project/ Activity plan of the applicant must have been appraised by a

financial institution u/s 4 A of the Companies Act, 1956 or a state finance

corporation or a scheduled commercial bank with a paid up capital exceeding

Rs.50 crores or a category I Merchant Banker with a net worth of atleast Rs.10

crores or a venture capital fund with a net worth of atleast Rs. 50 crores.

or

The applicant should have working capital arrangements with a bank having a

Networth of not less than Rs.50 crores.

“Provided that this Clause 4 shall not be applicable for listing of:

a) Equity shares and securities convertible into equity issued by

1. a banking company including a local area bank (i.e. Private Sector Banks)

set up under sub-clause (c) of Section 5 of the Banking Regulation Act,

1949 and which has received license from the Reserve Bank of India or

2. a corresponding new bank set up under the Banking Companies

(Acquisition and Transfer of Undertakings) Act, 1970, Banking

Companies (Acquisition and Transfer of Undertakings) Act, 1980, State

Bank of India Act, 1955 and the State Bank of India (Subsidiary Banks)

Act, 1959 (i.e. Public Sector Banks) or

3. an infrastructure company – (a) whose project has been appraised by a

Public Financial Institution or Infrastructure Development Finance

Corporation (IDFC) or Infrastructure Leasing and Financial Services

Limited (IL&FS) and (b) not less than 5% of the project cost is financed

59
 by any of the institutions referred to in clause (a) above, jointly or

severally, irrespective of whether they appraise the project or not, by way

of loan or subscription to equity or a combination of both.

b) Securities other than equity shares or securities convertible into equity shares at a

later date issued by Government Companies, Public Sector Undertakings, Financial

Institutions, Nationalised Banks, Statutory Corporations, Banking Companies and

subsidiaries of Scheduled Commercial Banks.”

5) The applicant desirous of listing its securities should satisfy the exchange on the

following:

 No disciplinary action by other stock exchanges and regulatory

authorities in past three years

The applicant, promoters’/promoting company(ies), group companies,

companies promoted by the promoters/promoting company(ies) have not

been in default in payment of listing fees to any stock exchange in the last

three years or has not been delisted or suspended in the past, and has not

been proceeded against by SEBI or other regulatory authorities in

connection with investor related issues or otherwise.

 Redressal mechanism of Investor grievance

The points of consideration are:

60
 The applicant, promoters’/promoting company(ies), group companies,

companies promoted by the promoters’/promoting company(ies) track

record in redressal of investor grievances

 The applicant’s arrangements envisaged are in place for servicing its

investor.

 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

 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

61
 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.

Note:

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.

62
 ELIGIBILITY CRITERIA FOR LISTING

Securities of Existing Companies

Existing Companies listed on other stock exchanges

1. Paid up Capital & Market Capitalisation

1. The paid-up equity capital of the applicant shall not be less than Rs. 10

crores * and the market capitalisation of the applicant’s equity shall not be

less than Rs. 25 crores**

Provided that the requirement of Rs. 25 crores market capitalisation under this

clause 1(a) shall not be applicable to listing of securities issued by

Government Companies, Public Sector Undertakings, Financial Institutions,

Nationalised Banks, Statutory Corporations and Banking Companies who are

otherwise bound to adhere to all the relevant statutes, guidelines, circulars,

clarifications etc. that may be issued by various regulatory authorities from

time to time.

or

2. The paid-up equity capital of the applicant shall not be less than Rs. 25

crores * (In case the market capitalisation is less than Rs. 25 crores, the

securities of the company should be traded for at least 25% of the trading

days during the last twelve months preceding the date of submission of

63
 application by the company on at least one of the stock exchanges where it

is traded.)

or

3. The market capitalisation of the applicant’s equity shall not be less than

Rs. 50 crores. **

* Explanation 1 For this purpose the existing paid up equity capital as well as

the paid up equity capital after the proposed issue for which listing is sought

shall be taken into account.

** Explanation 2 The market capitalisation shall be calculated by using a 12

month moving average of the market capitalisation over a period of six

months immediately preceding the date of application. For the purpose of

calculating the market capitalisation over a 12 month period, the average of

the weekly high and low of the closing prices of the shares as quoted on the

National Stock Exchange during the last twelve months and if the shares are

not traded on the National Stock Exchange such average price on any of the

recognised Stock Exchanges where those shares are frequently traded shall be

taken into account while determining market capitalisation after making

necessary adjustments for Corporate Action such as Rights / Bonus Issue.

2. Conditions precedent to Listing:

64
The applicant shall have adhered to conditions precedent to listing as emerging from

inter-alia, Securities Contracts (Regulations) Act 1956, Companies Act 1956,

Securities and Exchange Board of India Act 1992, any rules and/or regulations

framed under foregoing statutes, as also any circular, clarifications, guidelines issued

by the appropriate authority under foregoing statutes.

3. Atleast three years track record of either:

a. the applicant seeking listing; or

b. the promoters’*/promoting company, incorporated in or outside India

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:

1. The company has not been referred to the Board for Industrial and

Financial Reconstruction (BIFR).

2. The networth of the company has not been wiped out by the accumulated

losses resulting in a negative networth.

3. The company has not received any winding up petition accepted 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.

65
o The applicant should have been listed on any other recognised stock exchange for

atleast last three years

or

The project/activity plan must have been appraised by a financial institution u/s 4A of

the Companies Act, 1956, or a state finance corporation, or a scheduled commercial

bank with a paid up capital exceeding Rs. 50 crores, or a category I Merchant Banker

with a net worth of atleast Rs.10 crores or a venture capital fund with a net worth of

atleast Rs. 50 crores

or

The applicant should have working capital arrangements with a bank having a

networth of at least Rs.50 crores.

o The applicant has paid dividend in atleast 2 out of the last 3 financial years

immediately preceding the year in which listing application has been made

or

The applicant has distributable profits in at least two out of the last three financial

years (an auditors certificate must be provided in this regard).

or

The networth of the applicant is atleast Rs. 50 crores***

While considering the profitability / ability to distribute dividend, the non recurring

income/extraordinary income shall be excluded from the total income. Further in case

of companies where networth criteria is satisfied on account of shares being issued at

66
a premium for consideration other than cash, such cases be referred to the Listing

Advisory Committee (LAC).

*** Networth means: Paid up equity capital plus Reserves excluding revaluation

reserve minus Miscellaneous Expenses not written off minus balance in profit and

loss account to the extent not set off

"Provided that Clause 4 and Clause 5 shall not be applicable for listing of:

a) Equity shares and securities convertible into equity issued by

i. a banking company including a local area bank (i.e. Private Sector Banks) set up

under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and which has

received license from the Reserve Bank of India or

ii. a corresponding new bank set up under the Banking Companies (Acquisition and

Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and Transfer

of Undertakings) Act, 1980, State Bank of India Act, 1955 and the State Bank of India

(Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks)

Or

iii. an infrastructure company – (a) whose project has been appraised by a Public

Financial Institution or Infrastructure Development Finance Corporation (IDFC) or

Infrastructure Leasing and Financial Services Limited (IL&FS) and (b) not less than

5% of the project cost is financed by any of the institutions referred to in clause (a)

67
above, jointly or severally, irrespective of whether they appraise the project or not, by

way of loan or subscription to equity or a combination of both.

b) Securities other than equity shares or securities convertible into equity shares at a

later date issued by Government Companies, Public Sector Undertakings, Financial

Institutions, Nationalised Banks, Statutory Corporations, Banking Companies and

subsidiaries of Scheduled Commercial Banks."

68
 THE APPLICANT DESIROUS OF LISTING ITS SECURITIES SHOULD

ALSO SATISFY THE EXCHANGE ON THE FOLLOWING:

1. No Disciplinary action has been taken by other stock exchanges and regulatory

authorities in the past three years

The applicant, promoters/promoting company(ies), group companies, companies

promoted by the promoters/promoting company(ies) have not been in default in

payment of listing fees to any stock exchange in the last three years or has not been

delisted or suspended in the past and has not been proceeded against by SEBI or

other regulatory authorities in connection with investor related issues or otherwise.

2. Redressal mechanism of Investor grievance

The points of consideration are:

 The applicant, promoters/promoting company(ies), group

companies, companies promoted by the promoters/promoting company(ies)

track record in redressal of investor grievances

 The applicant’s arrangements envisaged are in place for servicing its

investor

 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

69
  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.

3. Distribution of shareholding

The applicant company/promoting company(ies) shareholding pattern on

March 31 of preceding three years separately showing promoters and other

groups’ shareholding pattern should be as per the regulatory requirements.

4. 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 need to be clarified to the exchange.

5. Track Record of Director(s) of the Company

70
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.

6. Change in Control of a Company/Utilisation of funds raised from

public

In the event of new promoters taking over listed companies which results in

change in management and/or companies utilising the funds raised through

public issue for the purposes other than those mentioned in the offer

document, such companies shall make additional disclosures (as required by

the Exchange) with regard to change in control of a company and utilisation

of funds raised from public.

71
NOTE:

Where an unlisted company merges with a company listed on other stock exchanges and

the merged entity seeks listing on the NSE, the Exchange may grant listing to the merged

entity only if the listed company (prior to the merger with the unlisted company) meets

all the criteria for listing on its own account or the unlisted company meets the

requirements for listing on the Exchange, except for the market capitalisation condition,

on its own account. In case either of the above conditions are not met then such company

may be considered for listing after a minimum period of 18 months or more or after the

publication of two annual reports whichever is later, provided it satisfies the criteria at

that point of time.

72
BOMBAY STOCK EXCHANGE

73
 ABOUT BSE

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich

heritage. Popularly known as "BSE", it was established as "The Native Share & Stock

Brokers Association" in 1875. It is the first stock exchange in the country to obtain

permanent recognition in 1956 from the Government of India under the Securities

Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the

development of the Indian capital market is widely recognized and its index, SENSEX, is

tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a

demutualised and corporatised entity incorporated under the provisions of the Companies

Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005

notified by the Securities and Exchange Board of India (SEBI).

With demutualisation, the trading rights and ownership rights have been de-linked

effectively addressing concerns regarding perceived and real conflicts of interest. The

Exchange is professionally managed under the overall direction of the Board of

Directors.The Board comprises eminent professionals, representatives of Trading

Members and the Managing Director of the Exchange. The Board is inclusive and is

designed to benefit from theparticipation of market intermediaries.

In terms of organisation structure, the Board formulates larger policy issues and exercises

over-all control. The committees constituted by the Board are broad-based.The day-to-

74
dayoperations of the Exchange are managed by the Managing Director and a

management team of professionals.

The Exchange has a nation-wide reach with a presence in 417 cities and towns of India.

The systems and processes of the Exchange are designed to safeguard market integrity

and enhance transparency in operations. During the year 2004-2005, the trading volumes

on the Exchange showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity, debt

instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietory

system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &

settlement functions of the Exchange are ISO 9001:2000 certified.

75
 HERITAGE

The oldest exchange in Asia and the first exchange in the country to be granted

permanent recognition under the Securities Contract Regulation Act, 1956, Bombay

Stock Exchange Limited (BSE) has had an interesting rise to prominence over the

past 130 years.

While the BSE is now synonymous with Dalal Street, it wasn’t always so. In fact the

first venues of the earliest stock broker meetings in the 1850s were amidst rather

natural environs - under banyan trees - in front of the Town Hall, where Horniman

Circle is now situated. A decade later, the brokers moved their venue to another set of

foliage, this time under banyan trees at the junction of Meadows Street and Mahatma

Gandhi Road. As the number of brokers increased, they had to shift from place to

place, and wherever they went, through sheer habit, they overflowed in to the streets.

At last, in 1874, found a permanent place, and one that they could, quite literally, call

their own. The new place was, aptly, called Dalal Street.

The journey of BSE is as eventful and interesting as the history of India’s

securitiesmarkets. India’s biggest bourse, in terms of listed companies and market

capitalisation, BSE has played a pioneering role in the Indian Securities Market - one

of the oldest in the world. Much before actual legislations were enacted, BSE had

76
formulated comprehensive set of Rules and Regulations for the Indian Capital

Markets. It also laid down best practices adopted by the Indian Capital Markets after

India gained its Independence.

Perhaps, there would not be any leading corporate in India, which has not sourced

BSE’s services in resource mobilization.

BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is

the benchmark equity index that reflects the robustness of the economy and finance.

At par with international standards, BSE has been a pioneer in several areas. It has

several firsts to its credit even in an intensely competitive environment.

 First in India to introduce Equity Derivatives

 First in India to launch a Free Float Index

 First in India to launch US$ version of BSE Sensex

 First in India to launch Exchange Enabled Internet Trading Platform

 First in India to obtain ISO certification for Surveillance, Clearing &

Settlement

 'BSE On-Line Trading System’ (BOLT) has been awarded the globally

recognised the Information Security Management System standard

BS7799-2: 2002.

77
  First to have an exclusive facility for financial training

 Moved from Open Outcry to Electronic Trading within just 50 days

An equally important accomplishment of BSE is the launch of a nationwide investor

awareness campaign - Safe Investing in the Stock Market - under which nationwide

awareness campaigns and dissemination of information through print and electronic

medium was undertaken. BSE also actively promoted the securities market awareness

campaign of the Securities and Exchange Board of India.

In 2002, the name The Stock Exchange, Mumbai, was changed to BSE. BSE, which

had introduced securities trading in India, replaced its open outcry system of trading

in 1995, when the totally automated trading through the BSE Online trading (BOLT)

system was put into practice. The BOLT network was expanded, nationwide, in 1997.

It was at the BSE's International Convention Hall that India’s 1st Bell ringing

ceremony in the history Capital Markets was held on February 18th, 2002. It was the

listing ceremony of Bharti Tele ventures Ltd.

BSE with its long history of capital market development is fully geared to continue its

contributions to further the growth of the securities markets of the country, thus

helping India increase its sphere of influence in international financial markets.

78
For the premier Stock Exchange that pioneered the stock broking activity in India,

125 years of experience seem to be a proud milestone. A lot has changed since 1875

when 318 persons became members of what today is called "Bombay Stock Exchange

Limited" by paying a princely amount of Re1.

Since then, the stock market in the country has passed through both good and bad

periods. The journey in the 20th century has not been an easy one. Till the decade of

eighties, there was no measure or scale that could precisely measure the various ups

and downs in the Indian stock market. Bombay Stock Exchange Limited (BSE) in

1986 came out with a Stock Index that subsequently became the barometer of the

Indian Stock Market.

BSE-SENSEX, first compiled in 1986 is a "Market Capitalization-Weighted" index of

30 component stocks representing a sample of large, well-established and financially

sound companies. The base year of BSE-SENSEX is 1978-79. The index is widely

reported in both domestic and international markets through print as well as electronic

media. BSE-SENSEX is not only scientifically designed but also based on globally

accepted construction and review methodology. The "Market Capitalization-

Weighted" methodology is a widely followed index construction methodology on

which majority of global equity benchmarks are based.

79
The growth of equity markets in India has been phenomenal in the decade gone by.

Right from early nineties the stock market witnessed heightened activity in terms of

various bull and bear runs. More recently, the bourses in India witnessed a similar

frenzy in the 'TMT' sectors. The BSE-SENSEX captured all these happenings in the

most judicial manner. One can identify the booms and bust of the Indian equity

market through BSE-SENSEX.

The launch of BSE-SENSEX in 1986 was later followed up in January 1989 by

introduction of BSE National Index (Base: 1983-84 = 100). It comprised of 100

stocks listed at five major stock exchanges in India at Mumbai, Calcutta, Delhi,

Ahmedabad and Madras. The BSE National Index was renamed as BSE-100 Index

from October 14, 1996 and since then it is calculated taking into consideration only

the prices of stocks listed at BSE.

With a view to provide a better representation of the increased number of companies

listed, increased market capitalisation and the new industry groups, the Exchange

constructed and launched on 27th May, 1994, two new index series viz., the 'BSE-

200' and the 'DOLLEX-200' indices. Since then, BSE has come a long way in

attuning itself to the varied needs of investors and market participants. In order to

fulfill the need of the market participants for still broader, segment-specific and

sector-specific indices, the Exchange has continuously been increasing the range of its

indices. The launch of BSE-200 Index in 1994 was followed by the launch of BSE-

80
500 Index and 5 sectoral indices in 1999. In 2001, BSE launched the BSE-PSU Index,

DOLLEX-30 and the country's first free-float based index - the BSE TECk Index

taking the family of BSE Indices to 13.

The Exchange also disseminates the Price-Earnings Ratio, the Price to Book Value

Ratio and the Dividend Yield Percentage on day-to-day basis of all its major indices.

The values of all BSE indices (except the Dollar version of indices) are updated every

15 seconds during the market hours and displayed through the BOLT system, BSE

website and news wire agencies.

All BSE-Indices are reviewed periodically by the "Index Committee" of the

Exchange. The committee frames the broad policy guidelines for the development and

maintenance of all BSE indices. The Index Cell of the Exchange carries out the day to

day maintenance of all indices and conducts research on development of new indices.

81
 BOARD OF DIRECTORS

Non-Executive Chairman Mr. Jagdish Capoor

Chairman, HDFC Bank

MD & CEO Mr. Rajnikant Patel

Directors

Mr. P. K. Banerji Mr.S.Jambunathan

IAS (Retd.) IAS (Retd.)

Ex-Chairman-cum-Managing Director
Prof. N. Ravichandran
Export Credit and Gurantee
Professor, IIM Ahmedabad
Corporation, Govt. of India

Mr. Jitesh Khosla Mr. Vijay Mukhi

Joint Secretary, Dept. of Company Affairs, Managing Director, Vijay Mukhi's

Govt. of India Computer Institute

Mr. Pradip P. Shah Mr. P. P. Vora

Chairman, IndAsia Fund Advisors Private Ex-Chairman, Industrial Development

Limited Bank of India and National Stock

Exchange of India Limited

82
Trading Member Representatives Mr. Prakash R. Kacholia

Mr. Balkishan Mohta

Mr. Siddharth J. Shah

83
 MANAGEMENT TEAM

Sr. No. Name Designation Department

1 Mr. Rajnikant MD & CEO

Patel
2 Mr. A. A. Chief - Investor Services Department of Investor

Tirodkar Services
3 Mr. S.B. Chief Technology Officer Dept. of Information

Patankar Technology
4 Mr. Kevin Chief General Manager Dept. of Administration &

Desouza Personnel Mgt.

5 Mr. P.S. Reddy Chief General Manager HR (Policies & Procedures),

DCS and DOSS

6 Mr. S. S. Vyas Chief - Internal Control Internal Control Functions
7 Dr. Bandi Ram Chief Knowledge Officer Knowledge Management

Prasad
8 Mr. Suniel Senior General Manager Member Services &
Vichare Development
9 Mr. P. P. Senior General Manager Dept. of Operations & Trading
Kaladharan (DOT)
10 Mr. T. V. Senior General Manager Strategy, Planning & Policies
Rangaswami
11 Mr. V. G. Company Secretary Secretarial & Compliance
Bhagat
12 Mr. Sanjiv General Manager Dept. of Surveillance &
Kapur Supervision (DOSS)

84
13 Mrs. Devika S. General Manager Clearing & Settlement,
Shah Derivatives & Debt
14 Mr. S. S. Bolar General Manager Investments & Accounts
15 Mr. Sanjay M. General Manager Dept. of Corporate Services
Golecha (DCS)
16 Mr. Lalit General Manager Dept. of Information
Ranpuria Technology (DIT)
17 Mr. C. General Manager Knowledge Management
Vasudevan
18 Mr. Rahul General Manager Dept. of Operations & Trading
Sharma (DOT)
19 Mr. Saji General Manager Strategy, Planning & Policies

Cherian

LISTING OF SECURITIES

Listing means admission of the securities to dealings on a recognised stock exchange.

The securities may be of any public limited company, Central or State Government,

quasi-governmental and other financial institutions/corporations, municipalities, etc.

The objectives of listing are mainly to :

 provide liquidity to securities;

 mobilize savings for economic development;

85
  protect interest of investors by ensuring full disclosures.

The Exchange has a separate Listing Department to grant approval for listing of securities

of companies in accordance with the provisions of the Securities Contracts (Regulation)

Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956,

Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the Exchange.

A company intending to have its securities listed on the Exchange has to comply with the

listing requirements prescribed by the Exchange. Some of the requirements are as under:

86
1. Minimum Listing Requirements for new companies

2. Minimum Requirements for companies delisted by this Exchange seeking

relisting of this Exchange

3. Minimum Requirements for companies delisted by this Exchange seeking

relisting of this Exchange

4. Permission to use the name of the Exchange in an Issuer Company's

prospectus

5. Submission of Letter of Application

6. Allotment of Securities

7. Trading Permission

8. Requirement of 1% Security

9. Payment of Listing Fees

10. Compliance with Listing Agreement

11. "Z" Group

12. Cash Management Services (CMS) - Collection of Listing Fees

87
88
[I] MINIMUM LISTING REQUIREMENTS FOR NEW COMPANIES

(A) Minimum Capital:

1. New companies can be listed on the Exchange, if their issued & subscribed equity

capital after the public issue is Rs.10 crores. In addition to this the issuer company

should have a post issue networth (equity capital + free reserves excluding

revaluation reserve) of Rs.20 crores.

2. For new companies in high technology ( i.e. information technology, internet, e-

commerce, telecommunication, media including advertisement, entertainment

etc.) the following criteria will be applicable regarding threshold limit:

i. The total income/sales from the main activity, which should be in the field

of information technology, internet, e-commerce, telecommunication,

media including advertisement, entertainment etc. should not be less than

75% of the total income during the two immediately preceding years as

certified by the Auditors of the company.

ii. The minimum post-issue paid-up equity capital should be Rs.5 Crores.

89
 iii. The minimum market capitalisation should be Rs.50 Crores. (The

capitalisation will be calculated by multiplying the post issue subscribed

number of equity shares with the Issue price).

iv. Post issue networth ( equity capital + free reserves excluding revaluation

reserve) of Rs.20 Crores.

(B) MINIMUM PUBLIC OFFER:

As per Rule 19(2) (b) of the Securities Contracts (Regulation) Rules, 1957, securities of a

company can be listed on a Stock Exchange only when at least 25% of each class or kind

of securities is offered to the public for subscription.

In case of IPOs by unlisted companies in the IT & entertainment sector, at least 10% of

the securities issued by the company may be offered to the public subject to the

following:

 Minimum 20 lac securities are offered to the public (excluding reservation, firm

allotment and promoters contribution)

 The size of the offer to the public is minimum 50 crores.

90
For this purpose, the term "offered to the public" means only the portion offered to the

public and does not include reservations of securities on firm or competitive basis.

SEBI may, however, relax this condition on the basis of recommendations of stock

exchange(s), only in respect of a Government company defined under Section 617 of the

Companies Act, 1956.

91
[II] MINIMUM LISTING REQUIREMENTS FOR COMPANIES

LISTED ON OTHER STOCK EXCHANGES

The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended

the direct listing norms for companies listed on other Stock Exchange(s) and seeking

listing at BSE. These norms are applicable with immediate effect.

1. The company should have minimum issued and paid up equity capital of Rs. 3

crores.

2. The Company should have profit making track record for last three years. The

revenues/profits arising out of extra ordinary items or income from any source of

non-recurring nature should be excluded while calculating distributable profits.

3. Minimum networth of Rs. 20 crores (networth includes Equity capital and free

reserves excluding revaluation reserves).

4. Minimum market capitalisation of the listed capital should be at least two times of

the paid up capital.

5. The company should have a dividend paying track record for the last 3

consecutive years and the minimum dividend should be at least 10%.

6. Minimum 25% of the company's issued capital should be with Non-Promoters

shareholders as per Clause 35 of the Listing Agreement. Out of above Non

Promoter holding no single shareholder should hold more than 0.5% of the paid-

up capital of the company individually or jointly with others except in case of

Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate

Bodies and Non-Resident Indians.

92
7. The company should have at least two years listing record with any of the

Regional Stock Exchange.

8. The company should sign an agreement with CDSL & NSDL for demat trading.

93
[III] Minimum Requirements for companies delisted by this Exchange

seeking relisting of this Exchange

The companies delisted by this Exchange and seeking relisting are required to make a

fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding

initial public offerings.

[IV] Permission to use the name of the Exchange in an Issuer Company's prospectus

The Exchange follows a procedure in terms of which companies desiring to list their

securities offered through public issues are required to obtain its prior permission to use

the name of the Exchange in their prospectus or offer for sale documents before filing the

same with the concerned office of the Registrar of Companies. The Exchange has since

last three years formed a "Listing Committee" to analyse draft prospectus/offer

documents of the companies in respect of their forthcoming public issues of securities

and decide upon the matter of granting them permission to use the name of "Bombay

Stock Exchange Limited" in their prospectus/offer documents. The committee evaluates

the promoters, company, project and several other factors before taking decision in this

regard.

94
[V] SUBMISSION OF LETTER OF APPLICATION

As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities

on the Exchange is required to submit a Letter of Application to all the Stock Exchanges

where it proposes to have its securities listed before filing the prospectus with the

Registrar of Companies.

[VI] ALLOTMENT OF SECURITIES

As per Listing Agreement, a company is required to complete allotment of securities

offered to the public within 30 days of the date of closure of the subscription list and

approach the Regional Stock Exchange, i.e. Stock Exchange nearest to its Registered

Office for approval of the basis of allotment.

In case of Book Building issue, Allotment shall be made not later than 15 days from the

closure of the issue failing which interest at the rate of 15% shall be paid to the investors.

95
[VII] TRADING PERMISSION

As per Securities and Exchange Board of India Guidelines, the issuer company should

complete the formalities for trading at all the Stock Exchanges where the securities are to

be listed within 7 working days of finalisation of Basis of Allotment.

A company should scrupulously adhere to the time limit for allotment of all securities and

dispatch of Allotment Letters/Share Certificates and Refund Orders and for obtaining the

listing permissions of all the Exchanges whose names are stated in its prospectus or offer

documents. In the event of listing permission to a company being denied by any Stock

Exchange where it had applied for listing of its securities, it cannot proceed with the

allotment of shares. However, the company may file an appeal before the Securities and

Exchange Board of India under Section 22 of the Securities Contracts (Regulation) Act,

1956.

[VIII] REQUIREMENT OF 1% SECURITY

The companies making public/rights issues are required to deposit 1% of issue amount

with the Regional Stock Exchange before the issue opens. This amount is liable to be

forfeited in the event of the company not resolving the complaints of investors regarding

delay in sending refund orders/share certificates, non-payment of commission to

underwriters, brokers, etc.

96
[IX] PAYMENT OF LISTING FEES

All companies listed on the Exchange have to pay Annual Listing Fees by the 30th April

of every financial year to the Exchange as per the Schedule of Listing Fees prescribed

from time to time.

The schedule of listing fees for the year 2004-2005, prescribed by the Governing Board

of the Exchange and approved by the Securities and Exchange Board of India is given

hereunder:

97
 SCHEDULE OF LISTING FEES FOR THE YEAR 2005-2006

Sr. Amount
Particulars
No. (Rs.)
1 Initial Listing Fees 20,000
2
Annual Listing Fees

(i) Companies with paid-up capital* upto Rs. 5 crores

10,000

(ii) Above Rs. 5 crores and upto Rs. 10 crores

15,000

(iii) Above Rs. 10 crores and upto Rs. 20 crores

30,000

3 Companies which have a paid-up capital* of more than Rs. 20 crores

will pay additional fee of Rs. 750/- for every increase of Rs. 1 crores or

part thereof.
4 In case of debenture capital (not convertible into equity shares) of

companies, the fees will be charged @ 25% of the fees payable as per

the above mentioned scales.

*Includes equity shares, preference shares, fully convertible debentures, partly convertible

debenture capital and any other security which will be converted into equity shares.

98
[X] COMPLIANCE WITH LISTING AGREEMENT

The companies desirous of getting their securities listed are required to enter into an

agreement with the Exchange called the Listing Agreement and they are required to make

certain disclosures and perform certain acts. As such, the agreement is of great

importance and is executed under the common seal of a company. Under the Listing

Agreement, a company undertakes, amongst other things, to provide facilities for prompt

transfer, registration, sub-division and consolidation of securities; to give proper notice of

closure of transfer books and record dates, to forward copies of unabridged Annual

Reports and Balance Sheets to the shareholders, to file Distribution Schedule with the

Exchange annually; to furnish financial results on a quarterly basis; intimate promptly to

the Exchange the happenings which are likely to materially affect the financial

performance of the Company and its stock prices, to comply with the conditions of

Corporate Governance, etc.

The Listing Department of the Exchange monitors the compliance of the companies with

the provisions of the Listing Agreement, especially with regard to timely payment of

annual listing fees, submission of quarterly results, requirement of minimum number of

shareholders, etc. and takes penal action against the defaulting companies.

99
[XI] "Z" Group

The Exchange has introduced a new category called "Z Group" from July 1999 for

companies who have not complied with and are in breach of provisions of the Listing

Agreement. The number of companies placed under this group as at the end of May, 2001

was 1,475.

The number of companies listed at the Exchange as at the end of May 2001 was 5,874.

This is the highest number among the Stock Exchanges in the country and in the world.

New Direct Listing norms

The Governing Board of the Exchange at its meeting held on 6th August, 2002 amended

the direct listing norms for companies listed on other Stock Exchange(s) and seeking

listing at BSE. These norms are applicable with immediate effect.

1. The company should have minimum issued and paid up equity capital of Rs. 3

crores.

2. The Company should have profit making track record for last three years. The

revenues/profits arising out of extra ordinary items or income from any source of

non-recurring nature should be excluded while calculating distributable profits.

3. Minimum networth of Rs. 20 crores (networth includes Equity capital and free

reserves excluding revaluation reserves).

4. Minimum market capitalisation of the listed capital should be at least two times of

the paid up capital.

100
5. The company should have a dividend paying track record for the last 3

consecutive years and the minimum dividend should be at least 10%.

6. Minimum 25% of the company's issued capital should be with Non-Promoters

shareholders as per Clause 35 of the Listing Agreement. Out of above Non

Promoter holding no single shareholder should hold more than 0.5% of the paid-

up capital of the company individually or jointly with others except in case of

Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate

Bodies and Non-Resident Indians.

7. The company should have at least two years listing record with any of the

Regional Stock Exchange.

8. The company should sign an agreement with CDSL & NSDL for demat trading.

101
[XII] CASH MANAGEMENT SERVICES (CMS) - COLLECTION OF

LISTING FEES

As a further step towards simplifying the system of payment of listing fees, the Exchange

has entered into an arrangement with HDFC Bank for collection of listing fees, from 141

locations, situated all over India. Details of the HDFC Bank branches, are available on

our website site www.bseindia.com as well as on the HDFC Bank website

www.hdfcbank.com The above facility is being provided free of cost to the Companies.

Companies intending to utilise the above facility for payment of listing fee would be

required to furnish the information, (mentioned below) in the Cash Management Cash

Deposit Slip. These slips would be available at all the HDFC Bank centres.

S.No HEAD INFORMATION TO BE PROVIDED

Client
1. Bombay Stock Exchange Limited
Name
Client
2. BSELIST
Code
Cheque
3. mention the cheque No & date
No.
4. Date date on which payment is being deposited with the bank.
state the name of the company and the company code No.The last digits

mentioned in the Ref. No. on the Bill is the company code No.e.g If the
5. Drawer
Ref. No in the Bill is mentioned as : Listing/Alf-Bill/2004-2005/4488,

then the code No of that company is 4488

Drawee
6. state the bank on which cheque is drawn
Bank
7. Drawn on Mention the location of the drawee bank.

102
 Location
Pickup
8. Not applicable
Location
No. of
9. Not applicable
Insts

The Cheque should be drawn in favour of Bombay Stock Exchange Limited , and should

be payable, locally .Companies are requested to mention in the deposit slip, the financial

year(s) for which listing fee is being paid. Payment made through any other slips would

not be considered. The above slips will have to be filled in quadruplicate. One

acknowledged copy would be provided to the depositor by the HDFC Bank.

103
 ANALYSIS

TABLE NO. 1, COMPARATIVE SUMMARY OF CAPITAL

REQUIREMENT.

Serial
Criteria BSE NSE
No.

104
 Capital Required MINIMUM 10
1 MINIMUM 10 CRORES
(Paid-Up) CRORES

Market MINIMUM 2 TIMES OF PAID-UP MINIMUM 25

2
Capitalization CAPITAL CRORES

Profit Making
3 At-least last 3 years N.A.
Record
The net worth of the

company has not been

Net Worth wiped out by the

4 Minimum 20 cr.
Required accumulated losses

resulting in a negative

net worth

105
 Comparison when company/ies is/are already listed on other stock exchange/s

Capital Required MINIMUM 10

5 MINIMUM 3CRORES
(Paid-Up) CRORES

Market MINIMUM 2 TIMES OF PAID-UP MINIMUM 25

6
Capitalization CAPITAL CRORES
At-least two out of the
Profit Making
7 At-least last 3 years last three financial
Record
years
Net Worth
8 Minimum 20 cr. Minimum 50 cr.
Required
Minimum 2 out of the

Dividend paying last 3 immediately

9 Minimum 3 years
track record preceding financial

years
At-least three years

At-least two years listing record listing record with any

10 Listing Record
with any Regional Stock Exchange. Regional Stock

Exchange.

INTERPRETATION
106
As per the Table No.1 (Comparative summary of capital requirement.)

Capital Required: -

On NSE for new companies minimum paid up capital requirement is 10

crores, while on BSE the requirement is also 10 crores & for new companies in high technology

the minimum post-issue paid-up equity capital should be Rs.5 Crores.

Market Capitalization: -

On NSE the market capitalization should be 25 crores, while on BSE

the minimum market capitalisation should be Rs.50 Crores (in case of new companies in high

technology).

Profit Making Record: -

On NSE the company must have distributable profits in at least two

out of the last three financial years (an auditors certificate must be provided in this regard), while

for listing company on BSE Company should have profit making track record for last three years

Net Worth Required: -

On NSE the net worth of the company has not been wiped out by the

accumulated losses resulting in a negative net worth, while on BSE the issuer company should

have a post issue net worth (equity capital + free reserves excluding revaluation reserve) of Rs.20

crores.

Dividend paying track record: -

107
 On NSE the applicant has paid dividend in at least 2 out

of the last 3 financial years immediately preceding the year in which listing application has been

made(in case),while on BSE the company should have a dividend paying track record for the last

3 consecutive years and the minimum dividend should be at least 10%. (when company/ies is/are

already listed on other stock exchange/s).

Listing Record: -

On NSE the applicant should have been listed on any other recognised stock

exchange for at least last three years, while on BSE the company should have at least two years

listing record with any of the Regional Stock Exchange.

108
 COMPARISON OF LISTING FEES

BSE NSE

Initial Listing Fees

Rs.20, 000 Rs.7, 500

Annual Listing Fees

Companies with paid up share and/or debenture capital:

Of Rs.1 crore 4,200

Up to Rs. 5 crores
10,000
Above Rs.1 crore and up
8,400
to Rs.5 crores
Above Rs. 5 crores
Above Rs.5 crores and up
and up to Rs. 10 15,000 14,000
to Rs.10 crores
crores
Above Rs. 10 crores
Above Rs.10 crores and
and up to Rs. 20 30,000 28,000
up to Rs.20 crores
crores
Additional fee of Rs. Above Rs.20 crores and
42,000
750/- for every increase up to Rs.50 crores
Above 20 crores
of Rs. 1 crores or part
Above Rs.50 crores 70,000
thereof.

The comparison of INITIAL LISTING FEES is shown in the chart:-1

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 NSE BSE

NSE

BSE

Initial Listing Fees (In Rs.)

NSE BSE

7,500 20,000

With the help of these charts we can simplify the comparison of listing fees. These charts

depict that listing fees on NSE is much lower than on BSE.

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The FURTHER LISTING FEES on NSE is shown in the chart: -2

NSE

4,200 8,400
14,000

70,000
28,000

42,000

Of Rs.1 crore Rs.1 cr to Rs.5 cr Rs.5 cr to Rs. 10cr

Rs.10 cr to Rs.20 cr Rs.20 cr to Rs.50 cr Above Rs.50 crores

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The FURTHER LISTING FEES on BSE is shown in the chart: -3

BSE

750 10,000

30,000
15,000

Up to Rs. 5 cr Rs.5 cr to Rs. 10cr

Rs.10 cr to Rs.20 cr Above 20 crores*

If we take the initial listing fees so we see that NSE charges less amount when BSE

charges a huge amount & as we travel further the charges charged by NSE for listing on it

is lower than the on BSE.

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 BENEFITS

1. A premier market place

2. Visibility

3. Largest exchange

4. Unprecedented reach

5. Modern infrastructure

6. Transaction speed

7. Short settlement cycles

8. Broadcast of corporate announcements

9. Trade statistics for listed companies

10. Investor service centers

11. Nominal listing fees

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1. A premier marketplace

The sheer volume of trading activity ensure that the impact cost is lower on NSE 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.

2. Visibility

The trading system in NSE provides unparallel level of trade and post-trade information.

The best 5 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.

3. Largest Exchange

NSE is the largest exchange in the county in terms of trading volumes. During the year

2003-2004, NSE reported a turnover of Rs. 1,099,535 crores in the equities segment.

4. Unprecedented reach

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NSE provides a trading platform that extends across the length and breadth of the

country. Investors from 360 centres can avail of trading facilities on the NSE Trading

Network. The Exchange uses the latest in communication technology to give instant

access from every location.

5. Modern infrastructure

NSE introduced for the first time in India, fully automated screen based trading. The

Exchange uses a sophisticated telecommunication network with over 9000 trading

terminals connected through VSATs (Very Small Aperture Terminals).

6. Transaction speed

The speed at which NSE processes orders, results in liquidity and better available prices.

NSE's trading system on an average processes 8000 orders per minute. The highest

number of trades in a day of 28,49,987 was recorded on January 05, 2005.

7. Short settlement cycles

NSE has successfully completed more than 1250 settlements without any delays.

8. Broadcast facility for corporate announcements

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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 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.

9. Trade statistics for listed companies

Listed companies are provided with monthly trade statistics for all the securities of the

company listed on NSE.

10. Investor service centers

Six investor-service centers opened by NSE across the country cater to the needs of

investors.

11. Nominal listing fees

The listing fee charged by NSE is much lower compared to the listing fees charged BSE.

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 CONCLUSION

On the basis of above stated study it has been assorted that with respect to technology,

listing fees, listing procedure, eligibility criteria of listing & listing requirements the

National Stock Exchange has the edge.

Despite the fact that Bombay Stock Exchange is older & has high level of trading

volume.

However, Many market Players, Brokers, sub-brokers, trading firms etc. deal through the

Bombay Stock Exchange.

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 FINDINGS

When I complete the assign project research then I finds some important points in this

report these are given as follows;

 There are capital require (paid up) must be minimum 10 crore for listing in NSE

or BSE for a particular company.

 Initial listing fees for a particular company in national stock exchange are much

lower then on Bombay stock exchange.

 Market capitalization of the Bombay stock exchange is more then national stock

exchange.

The daily turnover of national stock exchange is more then Bombay stock exchange on

daily basis.

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 LIMITATION

There are many limitations of this research report which are given as follows-

 Short period of time.

 There are some changes in stock market in daily basis.

 This project merely tells about the listing procedure of equities on NSE and BSE.

This project report not tells about the listing procedure of corporate bonds and mutual

funds etc

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 BIBLIOGRAPHY

AUTHORS

 PRASANNA CHANDRA

 PUNITHARVATHY PANDIAN

 FISCHER JORDAN

WEBSITES

 google.com

 nseindia.com

 bse.com

 myiris.com

 indiabulls.com

MAGAZINES / NEWSPAPERS

 The Business World

 The Business Today

 The Financial Express

 The Global Business

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