Sifting the wheat from the chaff
BSE’s new guidelines for companies listed on other stock exchanges
The recent history of the Indian capital markets clearly reveals the fact that over 20 regional stock exchanges are losing their business in favour of the country’s leading bourses, BSE (the Bombay Stock Exchange) and the NSE(National Stock Exchange). As a result. many regional companies are listing their securities on these two bourses.
And in this rush, many unscrupulous players also want to list their stocks for a host of vested interests. To prevent this and to ensure that only companies with a good reputation list their stocks on BSE, the BSE recently came out with guidelines (with effect from 1 Dec. 2000) for companies listed on other stock exchange and which are seeking listing on the BSE. Such companies should have a minimum paid-up equity capital of Rs 3.00 cr and should meet the following criteria :
The company should have a profit-making track record for at least three years
The minimum networth should be Rs 20 cr (networth includes equity capital and free reserves excluding revaluation reserves).
Minimum market capitalisation of the listed company should be Rs 20 cr based on the average price of the last six months.
The number of trading days during the last six months should be a minimum 50% of the total trading days during the same six months on any stock exchange
The minimum average volume traded per day during the last three months should be 1000 shares with a minimum of five trades per day.
A minimum 25% of a company’s issued capital should be with the public (inclusive of corporate bodies ) and there should be a minimum of 15 shareholders per lakh of capital in the public category.
The company should agree to sign an agreement with CDSL and NSDL for demat trading, etc.