What Are the Criteria for Listing on NSE?

The NSE uses a mix of financial, legal, and governance checks before approving a listing. Companies must meet minimum capital norms, follow public shareholding rules, and submit audited financials. Governance structures and disclosure readiness also matter. The idea is simple; if a company cannot operate transparently today, it may struggle in a public market tomorrow.

What are the Requirements for a Company to be Publicly Listed?

To be publicly listed, a company must be legally incorporated, financially sound, and prepared for continuous disclosures. It must issue shares through approved mechanisms and comply with exchange regulations that include board oversight, audits, and reporting systems as part of the process.

How Much Turnover is Required for Listing a Company?

There is no one-size-fits-all when it comes to the turnover required to list a company on NSE. Exchanges review turnover along with the profits, net worth, and operational consistency. Steady performance of the company often matters more than just one strong year in business.

Which is the Biggest Unlisted Company in India?

India has several large businesses that remain unlisted despite their scale. These companies may generate significant revenue yet stay private by choice. Some of the reasons for these companies to stay private include promoter control, long-term planning freedom, or limited need for public funding.

Why are Some Companies Not Listed on the NSE?

Some companies avoid NSE listing due to high compliance costs, strict disclosure norms, or preference for private funding, prioritising control and flexibility over public participation and transparency.

What are requirements for a company to be listed on NSE

Getting listed on the NSE, India’s largest stock exchange, can open several doors for a company. It helps raise capital, improves share liquidity, widens investor access, and increases overall visibility in the market.

Companies can list on the NSE in 2 ways: through an IPO or via a new listing. An IPO involves offering shares to the public for the first time, while a new listing applies to companies already listed elsewhere. In both cases, meeting NSE eligibility norms and following the prescribed process is mandatory.

Key Takeaways

NSE listing requires meeting eligibility, financial stability, governance standards, and disclosure norms to operate responsibly within a public market environment.

Companies can list via IPO or new listing, but must satisfy audited records, public shareholding rules, and post-listing compliance obligations.

Financial strength, governance structure, grievance handling, and absence of defaults heavily influence NSE approval decisions for listing applications.

Investors should assess rejection reasons carefully, as listing denial often signals governance, financial, or regulatory concerns impacting investment decisions.

The Listing Requirements

Getting listed on the NSE is not only about size or visibility. The exchange mainly checks whether a company is ready to function in a public environment. This includes how the company is incorporated, how shares are issued, and whether records are properly maintained. Audited financial statements are reviewed, and minimum public shareholding norms apply. The exchange also expects companies to commit to regular disclosures after listing. These requirements exist to keep listed companies comparable and to reduce surprises for investors once trading begins.

Financial Requirements for Listing

Before the listing gets approved, the NSE takes a closer look at a company’s financial base, which includes factors such as paid-up capital, net worth, and past profitability, that matter more than short-term spikes in revenue. A company should prove that its business can continue smoothly even after public scrutiny increases. Financial requirements act as a basic stability check, so investors do not rely solely on fragile balance sheets.

Corporate Governance Standards for Listing

Governance plays a major role in the listing decision. Companies need to have existing board structures, independent directors, and internal controls in place. Clear audit practices and transparent communication are expected. These standards reduce the gap between management and shareholders.

Once a company is listed on the NSE, the ‘shield of privacy’ disappears, which makes robust governance systems of utmost importance. This is why exchanges prefer these systems to exist before listing rather than after.

Eligibility criteria for getting listed via IPO on NSE

Below is the list of requirements that a company needs to fulfill to start its process of getting listed on NSE.

Conditions that need to be fulfilled by an applicant in either of the methods

Whether the applicant wants to get itself listed on NSE via IPO or New Listing, in addition to the above-mentioned conditions, they need to fulfill the below criteria as well to be eligible.

Furnish annual reports of 3 preceding financial years to NSE of either of the following:
1. The applicant applying for listing
2. The promoters of the company, incorporated in or outside India
3. A partnership firm that has been converted into a company (for not more than 3 years) and has fulfilled all the conditions laid down by SEBI in this regard
The applicant also needs to satisfy the exchange on the following grounds:
1. Redressal mechanism for grievances
  1. Exchange should be notified if there are any pending grievances against the issuer, its listed subsidiaries, and the top 5 listed group companies by Market Cap
  2. Exchange should be made aware of arrangements or mechanisms put in place for redressal of investor grievances
2. Defaults in payments
  1. If there is any default by an applicant or its promoters/group companies/subsidiary companies in payment of interest and/or principal to debenture/bond/fixed deposit holders, then the company will not get listed until all the obligations related to payment are completed

Understanding Costs of NSE Listing

Listing costs do not stop after the IPO. Companies must plan for one-time listing fees as well as recurring compliance expenses. Annual filings, audits, disclosures, and regulatory charges add to the cost of staying listed. While listing improves access to capital and visibility, it also brings ongoing financial responsibility. Companies that underestimate these costs often struggle post-listing.

Eligibility criteria for companies that are already listed on other exchanges to get listed on NSE

If a company wants to get listed on NSE apart from any other exchange it is already listed on, it needs to fulfill the eligibility criteria mentioned below along with the common requirements mentioned above. However, you must note that the below criteria are not valid for companies that are SME listed.

The net worth of the applicant for each of the 3 preceding financial years shall exceed ₹75 crores
The applicant company must have paid dividends in at least 2 out of 3 financial years (immediately preceding the year in which the application is been made)

OR Positive EBITDA in each of the 3 preceding financial years OR The average market capitalization* of the company has to be more than ₹1000 crore for a period of 6 months prior to the date of application *Herein the threshold of market capitalization is calculated as the average daily market capitalization for the 6 months prior to the date of application

The company should disclose all material litigation(s)/dispute(s)/regulatory action(s) to all the stock exchanges where its shares are listed
Other conditions that an applicant company needs to fulfill:
1. Should have been listed on any other recognized stock exchange for at least the last 3 years or on an exchange having nationwide trading terminals for a period of at least 6 months
2. The minimum average daily turnover during the last 6 months should be ₹ 10 lakhs & minimum average daily trades during the last 6 months should be 50 (count)
3. Should have at least 1000 public shareholders on the last day of the preceding quarter from the date of application
4. The listing application should not have been rejected in the last 6 months
5. Should not have any going concern, adverse opinion, or disclaimer of opinion pertaining to the financials
6. Securities of the company should have been trading above the face value for 6 months preceding the date of application
7. Should have completed the cooling period of the 2 months which starts from the date when security has come out of the trade-to-trade category or any other surveillance action (excluding companies under ASM) by other exchanges where the security is actively listed

Reasons NSE may reject the listing application

NSE reserves the right to reject the listing application because of any of the following reasons:

The applicant fails to fulfill the eligibility requirements set by the exchange
The application is not completed in all respects
The application doesn’t contain the required additional information by NSE
The exchange believes the application to be false and/or misleading
Any other reason as NSE may find appropriate

Reasons NSE May Reject The Listing Application

NSE reserves the right to reject the listing application for any of the following reasons:

The applicant fails to fulfil the eligibility requirements set by the exchange

The application is not completed in all respects

The application doesn’t contain the required additional information by NSE

The exchange believes the application to be false and/or misleading

Any other reason that NSE may find appropriate

What Should an Investor Do in Such a Situation?

As an investor, if you are holding shares of a particular company that is listed on BSE or any other stock exchange but gets rejected while listing on NSE, you need to find the reason for rejection. Here are a few reasons why NSE may reject a listing:

Reason 1 - Governance & Legal

Example - Pending litigation against promoters, serious investor grievances, or "fit and proper" person issues.

What to do – This can increase the risk of your holding because it suggests deeper issues with leadership or ethics. Since it can lead to future regulatory crackdowns, you need to reconsider it’s potential as long-term investment.

Reason 2 - Financial & Eligibility

Example - Discrepancies in ITR, failure to meet the ₹75 crore net worth criteria, or negative cash flow history.

What to do – This points to the financial standing of the company. It may not be financially stable to be on the NSE mainboard but may still be listed on the BSE or SME board until it meets the NSE mainboard requirement.

Reason 3 - Disclosure & Transparency

Example - Providing misleading information or failing to disclose material disputes in the application.

What to do – This is a serious concern as it is a breach of trust. Generally, there’s a "cooling-off" period where the company cannot reapply for 6 months.

Once you know the reason, here’s what to do:

Verify the Official Reason: Check the NSE’s "Circulars" or "Latest Announcements" section. Often, the exchange will cite non-fulfillment of specific eligibility criteria.

Evaluate the "Cooling-Off" Impact: If a company is rejected, it usually cannot reapply to the NSE for at least 6 months. Determine if you are willing to hold your capital in a less liquid (BSE-only) stock for that duration.

Monitor Price Action on Other Exchanges: Rejection by a major exchange like the NSE often leads to a knee-jerk price drop on the BSE. Assess if the drop is an overreaction to a technicality or a justified correction based on a governance flaw.

Conclusion

NSE is one of the leading stock exchanges in India. A company can enjoy a bundle of benefits such as a comprehensive marketplace, large-scale trading, ease of settlement, and more after getting itself listed on the NSE. However, to get a company listed on the exchange, an applicant first needs to make sure it fulfils the requirements laid down by the exchange. Once the company has fulfilled the eligibility criteria, here are the next steps that it needs to take to get listed via IPO.