In order to trade efficiently, securely, and creditably on the stock exchanges of India, the listed companies are to follow strictly the rules and regulations of The Securities and Exchange Board of India (SEBI),the supreme regulator of the securities market of India. Punctual compliances with the stock exchanges of India by the listed companies are vital part of these rules and regulations of SEBI, which are exclusively contained in its Equity Listing Agreement. Our law firm of international approbation has been helping the listed companies in doing perfect, safe, and lucrative business in India in complete compliance with such all rules, regulations, and mandatory compliances with the stock exchanges located in India and abroad. On this webpage, information regarding the compliances to be performed strictly and punctually by the listed companies of India with the stock exchanges of India, is presented exclusively, to help our site visitors and existing clients of India and abroad. In general, the provisions provided in the following Clauses of the Equity Listing Agreement are to be complied with by the listed companies in India, with the stock exchanges of India, for the main purpose of successful and legally secure trading of securities:
- Clause 35: — Related with providing detailed information to the stock exchange about each class of equity shares/securities before listing, and about any capital
- Clause 49: — This clause is mainly related with corporate governance in the listed
- Clause 41: — Connected with financial results
- Clause 31: — Related with annual reports, balance sheets, profit and loss accounts, proceedings of AGM/EGM
- Clause 32: — Related with disclosures in the annual report
- Clauses 19 & 20: — Connected with the board meeting and its outcomes
- Clause 20A: —- Associated with the declaration of dividend
- Clause 22: — Related with the credit of bonus shares
- Clause 30: — Pertaining to change directors/auditors
- Clause 33: — Regarding amendments in the MOA and AOA of the company
- Clause 36: — Related with disclosure of price-sensitive information
- Clause 38: — It related with the annual listing fees, which are to be paid on or before April 30 every year by the
- Clause 41: Regarding the board meeting in connection with financial results
Prior to an IPO, a company is considered private. As a private company, the business has grown with a relatively small number of shareholders including early investors like the founders, family, and friends along with professional investors such as venture
capitalists or angel investors.
When a company reaches a stage in its growth process where it believes it is mature enough for the rigors of SEC regulations along with the benefits and responsibilities to public shareholders, it will begin to advertise its interest in going public. Typically, this stage of growth will occur when a company has reached a private valuation of approximately $1 billion, also known as unicorn status. However, private companies at various valuations with strong fundamentals and proven profitability potential can also qualify for an IPO, depending on the market competition and their ability to meet listing requirements.
An IPO is a big step for a company. It provides the company with access to raising a lot of money. This gives the company a greater ability to grow and expand. The increased transparency and share listing credibility can also be a factor in helping it obtain better
terms when seeking borrowed funds as well.
IPO shares of a company are priced through underwriting due diligence. When a company goes public, the previously owned private share ownership converts to public ownership and the existing private shareholders’ shares become worth the public trading price. Share underwriting can also include special provisions for private to public share ownership. Generally, the transition from private to public is a key time for private investors to cash in and earn the returns they were expecting. Private shareholders may
hold onto their shares in the public market or sell a portion or all of them for gains.
Meanwhile, the public market opens up a huge opportunity for millions of investors to buy shares in the company and contribute capital to a company’s shareholders equity. The public consists of any individual or institutional investor who is interested in investing in the company. Overall, the number of shares the company sells and the price for which shares sell are the generating factors for the company’s new shareholders equity value. Shareholders equity still represents shares owned by investors when it is
both private and public, but with an IPO the shareholders equity increases significantly with cash from the primary issuance.
STOCK EXCHANGE COMPLIANCES