Listing a Public Limited Company (PLC) on the stock exchange is a major milestone that allows a company to raise capital from the public, enhance its credibility, and expand its market presence. However, the process involves stringent regulatory requirements, approvals from SEBI (Securities and Exchange Board of India), and compliance with stock exchange norms.

This guide provides a detailed step-by-step process for listing a Public Limited Company on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India.

Why List a Public Limited Company on the Stock Exchange?

✔️ Access to Capital – Raise funds from public investors through an IPO.
✔️ Increased Liquidity – Shares can be traded easily in the secondary market.
✔️ Enhanced Brand Reputation – Increases trust among investors, customers, and financial institutions.
✔️ Better Valuation – Helps in business expansion, acquisitions, and partnerships.
✔️ Employee Stock Options (ESOPs) – Attracts and retains top talent by offering stock-based compensation.

Eligibility Criteria for Listing a Company on the Stock Exchange

Before initiating the listing process, a Public Limited Company must meet the eligibility criteria set by SEBI and stock exchanges:

📌 Minimum Post-Issue Paid-Up Capital
✔️ ₹10 Crore (for listing on NSE and BSE Mainboard)
✔️ ₹3 Crore (for listing on SME Exchange)

📌 Net Tangible Assets
✔️ At least ₹3 Crore for the last 3 years.

📌 Profitability Track Record
✔️ Minimum ₹15 Crore in pre-tax profits in the last 3 years (for NSE/BSE Mainboard).

📌 Shareholding Requirements
✔️ Minimum 25% shares must be offered to the public (as per SEBI rules).

📌 No Regulatory Defaults
✔️ The company must not have any pending legal cases, defaults, or non-compliance issues.

Step-by-Step Process to List a Public Limited Company on the Stock Exchange

The listing process includes multiple approvals, documentation, and regulatory clearances.

1️⃣ Convert to a Public Limited Company (If Not Already Done)

Before listing, a company must be registered as a Public Limited Company under the Companies Act, 2013.

✔️ Minimum 7 shareholders and 3 directors.
✔️ File SPICe+ form with MCA for conversion (if currently a Private Limited Company).

2️⃣ Appoint a Merchant Banker (SEBI-Registered)

A Merchant Banker (also known as Lead Manager) is responsible for managing the Initial Public Offering (IPO) process.

✔️ Prepares Draft Red Herring Prospectus (DRHP).
✔️ Coordinates with SEBI and stock exchanges.
✔️ Determines the issue price of shares.

3️⃣ Conduct a Due Diligence & Financial Audit

The company must undergo due diligence to ensure compliance with SEBI and stock exchange requirements.

✔️ Legal Audit – Verification of business licenses, contracts, and past legal cases.
✔️ Financial Audit – Verification of income statements, balance sheets, tax returns.

4️⃣ File Draft Red Herring Prospectus (DRHP) with SEBI

The Draft Red Herring Prospectus (DRHP) is a document submitted to SEBI for approval before launching an IPO.

✔️ Includes company financials, management details, risk factors, and IPO details.
✔️ SEBI reviews the DRHP and may ask for modifications.

5️⃣ Apply to Stock Exchanges (NSE/BSE)

Once SEBI approves the DRHP, the company must apply for listing approval from the NSE and BSE.

✔️ Submit listing application with required documents.
✔️ Exchanges conduct an inspection and compliance check.

6️⃣ Get Approval from SEBI & Stock Exchange

✔️ SEBI issues Observations Letter after approving the IPO.
✔️ NSE/BSE grants Listing Approval.

7️⃣ Launch IPO (Initial Public Offering)

The company offers shares to the public, institutional investors, and retail investors.

✔️ The IPO Roadshow is conducted to attract investors.
✔️ IPO shares are allotted to investors.

8️⃣ Post-IPO Compliance and Listing on Stock Exchange

✔️ File Post-IPO Reports with SEBI.
✔️ Shares start trading on the stock exchange under a unique ticker symbol.

Documents Required for Listing a Public Limited Company

📌 Company Incorporation Documents
✔️ Certificate of Incorporation
✔️ Memorandum & Articles of Association

📌 Financial Documents
✔️ Audited financial statements (last 3 years)
✔️ Net worth certificate from CA

📌 Legal & Compliance Documents
✔️ Board Resolution approving IPO
✔️ SEBI & Stock Exchange Application Forms

Post-Listing Compliance Requirements

Once listed, a Public Limited Company must comply with continuous regulatory obligations.

📌 Quarterly Financial Results – Submit reports to NSE/BSE.
📌 Annual Shareholding Disclosures – Declare promoter and investor holdings.
📌 Corporate Governance Compliance – Maintain an independent Board of Directors.
📌 Insider Trading Regulations – Restrict trading by company insiders.

Cost of Listing a Public Limited Company

The cost of listing includes SEBI fees, stock exchange fees, legal charges, and merchant banker fees.

Advantages & Challenges of Listing a Public Company

✔️ Advantages

✔️ Access to Large Capital – Raise funds from public investors.
✔️ Market Visibility & Credibility – Enhances brand value.
✔️ Increased Liquidity – Shares can be easily bought/sold.

❌ Challenges

❌ Regulatory Burden – SEBI & Stock Exchange compliance is strict.
❌ High Cost – IPO & listing expenses can be ₹1 Crore – ₹5 Crores.
❌ Loss of Control – Promoters’ stake may dilute.

Conclusion

Listing a Public Limited Company on the stock exchange is a complex but rewarding process. It provides access to large-scale funding, enhances credibility, and offers liquidity to shareholders. However, it requires strict regulatory compliance, financial transparency, and continuous reporting.

To ensure a smooth IPO and stock exchange listing, expert guidance is essential. ASK ASSOCIATES offers complete legal, financial, and regulatory support for Public Limited Company listing in India.

📞 Contact ASK ASSOCIATES today for end-to-end stock exchange listing assistance!