What is the Process of Listing a Company in the NSE

To list a company on the National Stock Exchange (NSE), you must first meet strict financial and corporate governance criteria, then appoint a merchant banker to manage the Initial Public Offering (IPO) or new listing process. The process involves preparing and filing a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for approval, receiving in-principle approval from the NSE, launching the IPO, and finally getting the shares listed for public trading. Listing on the National Stock Exchange (NSE) is a significant milestone for Indian companies aiming to access public capital. It provides visibility, improves liquidity, and enhances corporate credibility. However, the process is structured and governed by strict regulatory guidelines to ensure transparency and investor protection. This article explains the key stages involved in listing a company on the NSE, covering both the mainboard and the SME platform.

Before initiating the listing process, companies must fulfil eligibility requirements defined by the NSE and SEBI. These differ based on the type of listing:

Mainboard Listing

Companies seeking mainboard listing must meet the following conditions:

• Be incorporated as a public limited company
  

• Have a minimum paid-up capital and net worth as prescribed
  

• Demonstrate profitability in at least two out of the last three years
  

• Ensure a minimum number of shareholders (at least 1,000 public shareholders) at the time of listing
  

NSE EMERGE (SME Platform)

Smaller companies can list through NSE EMERGE. The key criteria include:

• Post-issue paid-up capital not exceeding ₹25 Crore
  

• Track record of business operations for at least three years
  

• Positive net worth as per the latest audited financials
  

• No major regulatory default or litigation history
  

The eligibility stage ensures that only credible, stable businesses can tap into public markets.

The listing process begins with internal planning and appointment of key advisors. Companies must prepare thoroughly before filing with regulators:

• Appoint a SEBI-registered merchant banker
  

• Engage legal and financial advisors for documentation and compliance
  

• Finalise corporate governance structures and audit systems
  

• Complete statutory audits and prepare financial statements
  

During this phase, the merchant banker conducts due diligence to verify company records, legal status, and compliance history.

The next step is drafting and submitting the DRHP to SEBI. This document includes:

• Business overview
  

• Financial statements
  

• Promoter details
  

• Risk factors
  

• Purpose of raising funds
  

Once submitted, SEBI reviews the DRHP and may raise queries or observations. These must be resolved before moving to the next stage.

After SEBI approval, the company applies for listing on the NSE. This involves:

• Submitting the final offer document (RHP) with NSE
  

• Filing all prescribed forms and declarations
  

• Paying the applicable listing fees
  

The NSE verifies whether the company meets its listing requirements and grants in-principle approval.

With approvals in place, the company launches its Initial Public Offering (IPO). This includes:

• Marketing and investor outreach through roadshows
  

• Opening the issue for subscription within the specified price band
  

• Allowing retail, institutional, and non-institutional investors to bid
  

Depending on demand, shares may be allotted on a proportional or lottery basis. Oversubscription may lead to reduced allotments per investor.

Post-subscription, the company undertakes the following:

• Finalises the basis of allotment
  

• Credits shares to investors’ demat accounts
  

• Refunds excess application money, if any
  

• Applies for final listing and trading approval
  

Once NSE grants approval, the shares are listed, and trading begins on the stock exchange.

On the listing day, the company’s shares are:

• Made available for trading on the NSE platform
  

• Priced based on market demand and supply
  

• Monitored closely for price movement and investor response
  

This event marks the formal entry of the company into public capital markets.

Listing is not the end of the journey. Companies must adhere to ongoing compliance:

• Quarterly and annual financial disclosures
  

• Corporate governance requirements
  

• Disclosure of price-sensitive information
  

• Maintenance of minimum public shareholding
  

Failure to comply may result in penalties or delisting.

Listing offers several strategic benefits for companies:

• Access to wider investor base
  

• Improved market visibility and credibility
  

• Enhanced valuation and liquidity
  

• Ability to raise additional capital in the future
  

• Employee retention through ESOPs linked to listed shares
  

However, it also brings accountability and the need for robust compliance mechanisms.

Listing a company on the NSE is a detailed, step-by-step process designed to uphold investor confidence and market integrity. From satisfying eligibility norms and filing regulatory documents to launching the IPO and managing post-listing compliance, each stage plays a vital role. Whether opting for the mainboard or SME route, companies must plan strategically, stay compliant, and build investor trust to succeed in the public market space.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.