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Preface

The research report entitled, A study on development of capital market Indices in India
NSE & BSE was really a great interest to do. We really enjoyed working on it. Also, the topic
was so interesting that it aroused my interest to do more and more work regarding it.
The first real insight of an organization for management student comes only during her
preparation of project work because student first interacts with real practical work. This is first
introduction to industry and its working. This project work synthesize the theoretical concept
learn in the class room and its practical orientation in organization.
Research reports are backbone of any management education program. The tools that we
learn in the class room, we apply these tools in project work. I have seen the same problems
which were taught by our respectful teachers. A management master should frequently do
research work during her/her entire course plan.
This research report is divided in five chapters and each chapter has its own importance.
Together they show the entire picture of A study on development of capital market Indices in
India NSE & BSE.
The First chapter deals with the introduction of the topic, introduction of Capital market.
The objective and need of research is also mentioned in section of project work.
The Second chapter deals with research methodology. The process of carrying out the
whole research problem is defined in it. It contains information about the objectives of the
research, methods of data collection, sampling and sample design.
Third chapter is on data analysis and interpretation. This is the most important section of
the project work. This section contains the analysis of all the data collected so far and they are

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interpreted to produce the final conclusion. It contains all the tables and charts which depicts the
result.
Chapter four contains the finding and recommendation of the research. This is based on the
data analyzed and interpreted in the previous chapter. This is the most important section of the
research report for a report is evaluated on the validity ad correctness of findings.
Chapter five depicted conclusion which concludes the whole report, that is, gives a brief
description of the process employed so far. And later chapters contain bibliography. Which
describes the list of sources from where the matter and information is collected? It contains the
list of books, authors, web sites use etc.

Seema Bharti
B.B.A. VI Semester

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Acknowledgement
I sincerely express my deep sense of gratitude to Mr. Vijay Kumar Pandey, Assistant
professor, Department of Business Administration, TERI, Ghazipur, for his extraordinary
cooperation, invaluable guidance and supervision. This thesis is the result of his painstaking and
generous attitude.
I would like to thank the head of department Mr. Rahul Anand Singh, who gives me
chance to work on this topic and valuable suggestions and useful comments throughout this
research work.
I owe and respectfully offer my thanks to my noble parents for their constant moral support
and mellifluous affection which helped me to achieve success in every sphere of life and without
their kind devotion this thesis would have been a sheer dream.
I am also thankful to my siblings for their constructive discussions, perseverance and
encouragement during this research work.
I sincerely acknowledge the efforts of all those who have directly or indirectly helped me in
completing my thesis successfully.
It is the kindness of these acknowledged persons that this thesis sees the light of the day.
I submit this thesis of mine with great humility and utmost regard.

Seema Bharti
BBA 6th Semester
Department of Business Administration
Technical Education & Research Institute
P.G. College, Ghazipur

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About NSEThe National Stock Exchange (NSE) is India's leading stock exchange covering various
cities and towns across the country. NSE was set up by leading institutions to provide a
modern, fully automated screen-based trading system with national reach. The Exchange
has brought about unparalleled transparency, speed & efficiency, safety and market
integrity. It has set up facilities that serve as a model for the securities industry in terms of
systems, practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and
settlement mechanism, and has witnessed several innovations in products & services viz.
demutualization of stock exchange governance, screen based trading, compression of
settlement cycles, dematerialization and electronic transfer of securities, securities
lending and borrowing, professionalization of trading members, fine-tuned risk
management systems, emergence of clearing corporations to assume counterparty risks,
market of debt and derivative instruments and intensive use of information technology.

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About BSE
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share & Stock
Brokers Association" in 1875. It is the first stock exchange in the country to obtain
permanent recognition in 1956 from the Government of India under the Securities
Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the
development of the Indian capital market is widely recognized and its index, SENSEX, is
tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a
demutualised and corporative entity incorporated under the provisions of the Companies
Act, 1956, pursuant to the BSE(Corporatization and Demutualization) Scheme, 2005
notified by the Securities and Exchange Board of India (SEBI).
With demutualization, the trading rights and ownership rights have been de-linked
effectively addressing concerns regarding perceived and real conflicts of interest. The
Exchange is professionally managed under the overall direction of the Board of
Directors. The Board comprises eminent professionals, representatives of Trading
Members and the Managing Director of the Exchange. The Board is inclusive and is
designed to benefit from the participation of market intermediaries.
In terms of organization structure, the Board formulates larger policy issues and exercises
over-all control. The committees constituted by the Board are broad-based. The day-today operations of the Exchange are managed by the Managing Director and a
management team of professionals.

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The Exchange has a nation-wide reach with a presence in 417 cities and towns of India.
The systems and processes of the Exchange are designed to safeguard market integrity
and enhance transparency in operations. During the year 2004-2005, the trading volumes
on the Exchange showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietary
system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &
settlement functions of the Exchange are ISO 9001:2000 certified.

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About NSE
The National Stock Exchange (NSE) is India's leading stock exchange covering various
cities and towns across the country. NSE was set up by leading institutions to provide a
modern, fully automated screen-based trading system with national reach. The Exchange
has brought about unparalleled transparency, speed & efficiency, safety and market
integrity. It has set up facilities that serve as a model for the securities industry in terms of
systems, practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and
settlement mechanism, and has witnessed several innovations in products & services viz.
demutualization of stock exchange governance, screen based trading, compression of
settlement cycles, dematerialisation and electronic transfer of securities, securities
lending and borrowing, professionalization of trading members, fine-tuned risk
management systems, emergence of clearing corporations to assume counterparty risks,
market of debt and derivative instruments and intensive use of information technology.

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NSE Milestones
November 1992

Incorporation

April 1993

Recognition as a stock exchange

May 1993

Formulation of business plan

June 1994

Wholesale Debt Market segment goes live

November 1994

Capital Market (Equities) segment goes live

March 1995

Establishment of Investor Grievance Cell

April 1995

Establishment of NSCCL, the first Clearing Corporation

June 1995

Introduction of centralized insurance cover for all trading


members

July 1995

Establishment of Investor Protection Fund

October 1995

Became largest stock exchange in the country

April 1996

Commencement of clearing and settlement by NSCCL

April 1996

Launch of S&P CNX Nifty

June 1996

Establishment of Settlement Guarantee Fund

November 1996

Setting up of National Securities Depository Limited, first


depository in India, co-promoted by NSE

November 1996

Best IT Usage award by Computer Society of India

December 1996

Commencement of trading/settlement in dematerialized securities

December 1996

Dataquest award for Top IT User

December 1996

Launch of CNX Nifty Junior

February 1997

Regional clearing facility goes live

November 1997

Best IT Usage award by Computer Society of India

May 1998

Promotion of joint venture, India Index Services & Products


Limited (IISL)

May 1998

Launch of NSE's Web-site: www.nse.co.in

July 1998

Launch of NSE's Certification Programme in Financial Market

August 1998

CYBER CORPORATE OF THE YEAR 1998 award

February 1999

Launch of Automated Lending and Borrowing Mechanism


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April 1999

CHIP Web Award by CHIP magazine

October 1999

Setting up of NSE.IT

January 2000

Launch of NSE Research Initiative

February 2000

Commencement of Internet Trading

June 2000

Commencement of Derivatives Trading (Index Futures)

September 2000

Launch of 'Zero Coupon Yield Curve'

November 2000

Launch of Broker Plaza by Dotex International, a joint venture


between NSE.IT Ltd. and i-flex Solutions Ltd.

December 2000

Commencement of WAP trading

June 2001

Commencement of trading in Index Options

July 2001

Commencement of trading in Options on Individual Securities

November 2001

Commencement of trading in Futures on Individual Securities

December 2001

Launch of NSE VaR for Government Securities

January 2002

Launch of Exchange Traded Funds (ETFs)

May 2002

NSE wins the Wharton-Infosys Business Transformation Award


in the Organization-wide Transformation category

October 2002

Launch of NSE Government Securities Index

January 2003

Commencement of trading in Retail Debt Market

June 2003

Launch of Interest Rate Futures

August 2003

Launch of Futures & options in CNXIT Index

June 2004

Launch of STP Interoperability

August 2004

Launch of NSEs electronic interface for listed companies

June 2005

Launch of Futures & options in BANK Nifty Index

The Organization
The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges, which recommended
promotion of a National Stock Exchange by financial institutions (FIs) to provide access
to investors from all across the country on an equal footing. Based on the
recommendations, NSE was promoted by leading Financial Institutions at the behest of
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the Government of India and was incorporated in November 1992 as a tax-paying


company unlike other stock exchanges in the country.
On its recognition as a stock exchange under the Securities Contracts (Regulation) Act,
1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000.

Mission
NSE's mission is setting the agenda for change in the securities markets in India. The
NSE was set-up with the main objectives of:

establishing a nation-wide trading facility for equities, debt instruments and


hybrids,

ensuring equal access to investors all over the country through an appropriate
communication network,

providing a fair, efficient and transparent securities market to investors using


electronic trading systems,

enabling shorter settlement cycles and book entry settlements systems, and

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meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become
industry benchmarks and are being emulated by other market participants. NSE is more
than a mere market facilitator. It's that force which is guiding the industry towards new
horizons and greater opportunities.

Logo
The logo of the NSE symbolizes a single nationwide securities trading facility
ensuring equal and fair access to investors, trading members and issuers all over
the country. The initials of the Exchange viz., N, S and E have been etched on the
logo and are distinctly visible. The logo symbolizes use of state of the art
information technology and satellite connectivity to bring about the change within
the securities industry. The logo symbolizes vibrancy and unleashing of creative
energy to constantly bring about change through innovation

Promoters
NSE has been promoted by leading financial institutions, banks, insurance
companies and other financial intermediaries:

1.

Industrial Development Bank of India Limited

2.

Industrial Finance Corporation of India Limited

3.

Life Insurance Corporation of India

4.

State Bank of India

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5.

ICICI Bank Limited

6.

IL & FS Trust Company Limited

7.

Stock Holding Corporation of India Limited

8.

SBI Capital Markets Limited

9.

The Administrator of the Specified Undertaking of Unit Trust of India

10.

Bank of Baroda

11.

Canara Bank

12.

General Insurance Corporation of India

13.

National Insurance Company Limited

14.

The New India Assurance Company Limited

15.

The Oriental Insurance Company Limited

16.

United India Insurance Company Limited

17.

Punjab National Bank

18.

Oriental Bank of Commerce

19.

Corporation Bank

20.

Indian Bank
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21.

Union Bank of India

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Corporate Structure
NSE is one of the first de-metalized stock exchanges in the country, where the ownership and
management of the Exchange is completely divorced from the right to trade on it. Though the
impetus for its establishment came from policy makers in the country, it has been set up as a
public limited company, owned by the leading institutional investors in the country.
From day one, NSE has adopted the form of a demutualised exchange - the ownership,
management and trading is in the hands of three different sets of people. NSE is owned by a set
of leading financial institutions, banks, insurance companies and other financial intermediaries
and is managed by professionals, who do not directly or indirectly trade on the Exchange. This
has completely eliminated any conflict of interest and helped NSE in aggressively pursuing
policies and practices within a public interest framework.
The NSE model however, does not preclude, but in fact accommodates involvement, support and
contribution of trading members in a variety of ways. Its Board comprises of senior executives
from promoter institutions, eminent professionals in the fields of law, economics, accountancy,
finance, taxation, and etc, public representatives, nominees of SEBI and one full time executive
of the Exchange.
While the Board deals with broad policy issues, decisions relating to market operations are
delegated by the Board to various committees constituted by it. Such committees include
representatives from trading members, professionals, the public and the management. The dayto-day management of the Exchange is delegated to the Managing Director who is supported by
a team of professional staff.

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Board of Directors

Chairman

Mr. S. B. Mathur
Administrator of the Specified
Undertaking of
Unit Trust of India

Managing Director

Mr. Ravi Narain


National Stock Exchange of India
Ltd.

Deputy Managing Director

Ms. ChitraRamkrishna
National Stock Exchange of India
Ltd.

Directors
Mr. S. P. Chhajed

Mr. R. P. Chitale

Partner

Managing Partner

M/s. Chhajed&Doshi

M/s. M.P.Chitale& Co.

Chartered Accountants
Mr. S. H. Khan

Chartered Accountants
Prof. (Dr.) K.R.S.Murthy

Chairman

Professor and Former Director

Feedback First Urban Infrastructure

Indian Institute of Management,

Development Comp. Ltd.


Mr. Anand G. Mahindra

Bangalore
Mr. N.S. Kannan

Vice Chairman & Managing Director

Chief Financial Officer & Treasurer

Mahindra & Mahindra Ltd


Mr. Indrajit Gupta

ICICI Bank Ltd


Mr. A. P. Kurian

Managing Director & CEO

Chairman

SBI Capital Markets Ltd.

Association of Mutual Funds in India

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Mr. Justice M.L. Pendse (Retd.)

Mr. Ravi Parthasarathy

Former Chief Justice of Karnataka

Chairman & Managing Director

High Court

Infrastructure Leasing & Financial

and Judge of Bombay High Court


Mr. R. N. Bhardwaj

Services Ltd
Mr. M. Raghavendra

Chairman

Ex-General Manager

Life Insurance Corporation of India

General Insurance Corporation of India


Mr. S.Venkiteswaran

Dr. R. H. Patil

Sr. Advocate &

Chairman

Mr. Y. H. Malegam

The Clearing Corporation of India Ltd.

Chartered Accountant

Committees
The Exchange has constituted various committees to advise it on areas such as good
market practices, settlement procedures, risk containment systems etc. These committees
are manned by industry professionals, trading members, Exchange staff as also
representatives from the market regulator.

Executive Committee

Committee On Trade Related Issues (COTI)

Advisory Committee - Listing of Securities

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Executive Committee
Objective: To manage the day-to-day operations of the Exchange Composition:
1.

Mr. Ravi Narain

Chairman

Managing Director
National Stock Exchange of India Ltd.
2.

Mr. MukeshKansal

Trading Member

Managing Director
M/s. K & A Securities (P) Ltd.
3.

Mr. Hemang Raja

Trading Member

Managing Director
M/s IL&FS Investsmart Ltd.
4.

Mr. ShaileshSaraf

Trading Member

Wholetime Director
M/s. Dynamic Equities Pvt. Ltd.
5.

Mr. C.Parthasarathy

Trading Member

Director
M/s. Karvy Stock Broking Ltd.
6.

Mr. R. P. Chitale

Public Representative

Managing Partner
M/s. M. P. Chitale& Co. Chartered Accountants
7.

Mr. Y. H. Malegam

Public Representative

Chartered Accountant
8.

Mr. S. Venkiteswaran

Public Representative

Sr. Advocate
9.

Ms. ChitraRamkrishna

Other Nominee

Deputy Managing Director


National Stock Exchange of India Ltd.

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10. Mr. P. M. Venkatasubramanian

Other Nominee

Ex-Managing Director, GIC


11.

Mr. N.S.Kannan

Other Nominee

Chief Financial Officer & Treasurer


ICICI Bank Limited

For Futures & Options Segment


1. Mr. Ravi Narain

Chairman

Managing Director
National Stock Exchange of India Ltd.
2. Mr. Shitin D Desai

Trading Member

Executive Vice Chairman


M/s. DSP Merrill Lynch Ltd.
3. Mr. VineetBhatnagar

Trading Member

Managing Director
M/s Refco-Sify Securities India (Pvt.) Ltd.
4. Mr. D.C.Anjaria

Public Representative

Director
International Finance Solutions Pvt. Ltd.
5. Mr. ShaileshHaribhakti

Public Representative

Partner
M/s. Haribhakti& Co.
6. Prof. V. Ravi Anshuman

Public Representative

Indian Institute of Management


Bangalore
7. Mr. M. Raghavendra

Other Nominee

Ex-General Manager
General Insurance Corporation of India

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8. Ms. ChitraRamkrishna

Other Nominee

Deputy Managing Director


National Stock Exchange of India Ltd.
9. Mr. M. L. Soneji
Director (Operations & Surveillance)

Other Nominee

National Stock Exchange of India Ltd.

Committee on Trade Issues (COTI)


Objective: To provide guidance on trade related issues which crop up during the day-today functioning of the Exchange Composition:
Mr. Atul Kumar

Mr. S.Ramasubramanian

Managing Director

Partner

Practical Financial Services Pvt. Ltd.

M/s. Venkatraman& Co

(Chairman of the committee)


. Mr. Dhiraj Single

Mr. Dikul Patel

Head of Market Operations

Executive Director

ASK Raymond James Financial Services JK Securities Pvt. Limited


(I) Ltd.
Mr. ShreekantPhumbhra

Mr. G V NageswaraRao

Proprietor

Managing Director

ShreekantPhumbhra

IDBI Capital Market Services Ltd.

Mr. Ashok Kakkar

Mr. Ketan H. Marwadi

Wholetime Director

Managing Director

Vivek Financial Focus Ltd.

Marwadi Shares & Finance Pvt. Ltd.

Mr.K. RavindraBabu

Mr. Ravindra Kumar Agrawal

Managing Director

Wholetime Director

Zen Securities Ltd.

ShriParashram Holdings P. Ltd.

Advisory Committee - Listing of Securities


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Objective: To advise NSE on

The suitability of the Companies for listing on the Exchange within the
parameters set out by the listing agreement

To ensure that the applicant company has complied with all the conditions set out
in the listing agreement as well as other formalities, SEBI regulations, etc.

Systems and procedures to be adopted for listing of securities

Composition:
1

Mr. N Ganga Ram


Former Executive Director, Industrial Development Bank of India

Mr. UdayKotak
Executive Vice Chairman and Managing Director,
Kotak Mahindra Bank Ltd.

Mr. M R Mondkar
Chairman, Mondkar Computers Pvt. Ltd.

Mr. S Ramadorai
Chief Executive Officer, Tata Consultancy Services

Mr. PrithviHaldea
Managing Director, Prime Database
Praxis Cons. & Information Services Pvt. Ltd.

Mr. PrakashKarnik
Director-Asia, Electrapartners Asia Pvt. Ltd.

Mr. S.V. Prasad


Chief Executive Officer, Birla Sunlife Mutual Fund

Mr. Pradip P. Shah


Chairman, Indasia Fund Advisors Pvt. Ltd.

Mr. VimalBhandari
Executive Director, Infrastructure Leasing & Financial Services Ltd.
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10

Mr. J. Ravichandran
Company Secretary &Sr.Vice President
National Stock Exchange of India Ltd.

11.

Mrs. ChitraRamkrishna
Deputy Managing Director, Head of Listing
National Stock Exchange of India Ltd.

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Management Team (Personal Staff)


Mr. Ravi Narain

MANAGING

DIRECTOR

&

CHIEF

EXECUTIVE

OFFICER
Ms. ChitraRamkrishna

Deputy Managing Director

Mr. J Ravichandran

Director
Legal & Secretarial , Inspection, Finance & Accounts

Mr. M L Soneji

Director
Capital Market (Trade & Surveillance), F&O (Trade &
Surveillance), WDM (Trade & Surveillance), IPO and
Investigation

Mr. R Sundararaman

Vice President
NSCCL - F&O Clearing, Risk Management & Collaterals

Mr. Yatrik R Vin

Vice President
Finance & Accounts

Mr. A Sebastin

Asst. Vice President


Risk Management

Mr. Arup Mukherjee

Asst. Vice President


NCFM & Economic Analysis & policy

Mr. C. N. Upadhyay

Asst. Vice President


Inspection

Mr. D Satish Kumar

Asst. Vice President


Legal

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Mr. DhruvkumarPatil

Asst. Vice President


Arbitration, Defaulters Section & Investor Grievances

Mr. Mahesh Haldipur

Asst. Vice President


Premises

Mr. Narendra Kumar Ahlawat

Asst. Vice President


NSCCL - Development

Mr. Nayan Mehta

Asst. Vice President


Finance & Accounts

Mr. Suresh Narayan

Asst. Vice President


India Index Services & Products Ltd.

Mr. R Jayakumar

Asst. Vice President


Secretarial

Mr. R Nanda Kumar

Asst. Vice President


Development

Mr. Ravi Varanasi

Asst. Vice President


Investigation & Surveillance

Ms. T S Jagadharini

Asst. Vice President


Listing & Membership

NSE Group

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NSCCL

IISL

NSE.IT

NSE

DotEx Intl. Ltd.

NSDL

National Securities Clearing Corporation Ltd. (NSCCL)


The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary
of NSE, was incorporated in August 1995. It was set up to bring and sustain confidence in
clearing and settlement of securities; to promote and maintain, short and consistent
settlement cycles; to provide counter-party risk guarantee, and to operate a tight risk
containment system. NSCCL commenced clearing operations in April 1996.
NSCCL carries out the clearing and settlement of the trades executed in the Equities and
Derivatives segments and operates Subsidiary General Ledger (SGL) for settlement of
trades in government securities. It assumes the counter-party risk of each member and
guarantees financial settlement. It also undertakes settlement of transactions on other
stock exchanges like, the Over the Counter Exchange of India.

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NSCCL has successfully brought about an up-gradation of the clearing and settlement
procedures and has brought Indian financial markets in line with international markets.

NSE.IT Ltd.
NSE.IT, a 100% subsidiary of National Stock Exchange of India Limited (NSE), is the
information technology arm of the largest stock exchange of the country. A leading edge
technology user, NSE houses state-of-the-art infrastructure and skills. NSE.IT possesses
the wealth of expertise acquired in the last six years by running the trading and clearing
infrastructure of largest stock exchange of the country. NSE.IT is uniquely positioned to
provide products, services and solutions for the securities industry. There has been a long
felt need for top-of-the-line products, services and solutions in the area of trading, broker
front-end and back-office, clearing and settlement, web-based trading, risk management,
treasury management, asset liability management, banking, insurance etc. NSE.IT's
expertise in these areas is the primary focus. The company also plans to provide
consultancy and implementation services in the areas of Data Warehousing, Business
Continuity Plans, Stratus Mainframe Facility Management, Site Maintenance and
Backups, Real Time Market Analysis & Financial News over NSE-Net, etc.
NSE.IT is an Export Oriented Unit with STP and plans to go global for various IT
services in due course. In the near future the company plans to release new products for
Broker Back-office Operations and enhance NeatXS / Neat iXS to support Straight
Through Processing on the net.

India Index Services & Products Ltd. (IISL)


India Index Services and Products Limited (IISL), a joint venture between NSE and
CRISIL Ltd. (formerly the Credit Rating Information Services of India Limited), was set
up in May 1998 to provide a variety of indices and index related services and products for
the Indian capital markets. It has a consulting and licensing agreement with Standard and
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Poor's (S&P), the world's leading provider of investible equity indices, for co-branding
equity indices.
IISL provides a broad range of services, products and professional index services. It
maintains over 80 equity indices comprising broad-based benchmark indices, sectoral
indices and customized indices. Many investment and risk management products based
on IISL indices have been developed in the recent past, within India and abroad. These
include index based derivatives traded on NSE and Singapore Exchange (SIMEX) and a
number of index funds.

National Securities Depository Ltd. (NSDL)


In order to solve the myriad problems associated with trading in physical securities, NSE
joined hands with the Industrial Development Bank of India (IDBI) and the Unit Trust of
India (UTI) to promote dematerialization of securities. Together they set up National
Securities Depository Limited (NSDL), the first depository in India.
NSDL commenced operations in November 1996 and has since established a national
infrastructure of international standard to handle trading and settlement in dematerialized
form and thus completely eliminated the risks to investors associated with fake/bad/stolen
paper.

DotEx International Limited


DotEx was formed to provide world-class internet trading platforms which allow
members of NSE to offer online trading facilities to their customers. Members of NSE
can service a larger clientele by using the automated risk management features and thus
increase volumes. Investors get comprehensive and updated information necessary to
trade, along with a single-click convenience to fulfil their obligations. The initial offering
of DotEx is DotExPlaza where multiple market participants such as members of NSE,
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depository participants and banks can offer web-based services to their customers. As a
neutral aggregator and infrastructure provider, DotEx offers choice and convenience to
investors.
DotEx was a joint venture between i-flex Solutions Ltd. and NSE.IT Ltd. Recently NSE
has taken over the shareholding and management of DotEx.
DotEx products may be classified under the following broad categories:

Equity Trading Module

F&O Trading Module.

NSE Technology
Across the globe, developments in information, communication and network
technologies have created paradigm shifts in the securities market operations. Technology
has enabled organizations to build new sources of competitive advantage, bring about
innovations in products and services, and to provide for new business opportunities.
Stock exchanges all over the world have realised the potential of IT and have moved over
to electronic trading systems, which are cheaper, have wider reach and provide a better
mechanism for trade and post trade execution.
NSE believes that technology will continue to provide the necessary impetus for the
organisation to retain its competitive edge and ensure timeliness and satisfaction in
customer service. In recognition of the fact that technology will continue to redefine the
shape of the securities industry, NSE stresses on innovation and sustained investment in
technology to remain ahead of competition. NSE's IT set-up is the largest by any
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company in India. It uses satellite communication technology to energise participation


from around 400 cities spread all over the country. In the recent past, capacity
enhancement measures were taken up in regard to the trading systems so as to effectively
meet the requirements of increased users and associated trading loads. With upgradation
of trading hardware, NSE can handle up to 1 million trades per day. NSE has also put in
place NIBIS (NSE's Internet Based Information System) for on-line real-time
dissemination of trading information over the internet. In order to capitalize on in-house
expertise in technology, NSE set up a separate company, NSE.IT, in October 1999. This
is expected to provide a platform for taking up new IT assignments both within and
outside India and attaining global exposure.
NEAT is a state-of-the-art client server based application. At the server end, all trading
information is stored in an in-memory database to achieve minimum response time and
maximum system availability for users. The trading server software runs on a fault
tolerant STRATUS main frame computer while the client software runs under Windows
on PCs.
The telecommunications network uses X.25 protocol and is the backbone of the
automated trading system. Each trading member trades on the NSE with other members
through a PC located in the trading member's office, anywhere in India. The trading
members on the Wholesale Debt Market segment are linked to the central computer at the
NSE through dedicated 64Kbps leased lines and VSAT terminals. These leased lines are
multiplexed using dedicated 2 Mbps, optical-fibre links. The WDM participants connect
to the trading system through dial-up links.

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The Exchange uses powerful RISC -based UNIX servers, procured from Digital and HP
for the back office processing. The latest software platforms like ORACLE 7 RDBMS,
GUPTA - SQL/ORACLE FORMS 4.5 Front - Ends, etc. have been used for the Exchange
applications. The Exchange currently manages its data centre operations, system and
database administration, design and development of in-house systems and design and
implementation of telecommunication solutions.
NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it
supports more than 3000 VSATs and is expected to grow to more than 4000 VSATs in the
next year. The NSE- network is the largest private wide area network in the country and
the first extended C- Band VSAT network in the world. Currently more than 9000 users
are trading on the real time-online NSE application. There are over 15 large computer
systems which include non-stop fault-tolerant computers and high end UNIX servers,
operational under one roof to support the NSE applications. This coupled with the nation
wide VSAT network makes NSE the country's largest Information Technology user.

In an ongoing effort to improve NSE's infrastructure, a corporate network has been


implemented, connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This
corporate network enables speedy inter-office communications and data and voice
connectivity between offices.
In keeping with the current trend, NSE has gone online on the Internet. Apart from
having a 2mbps link to VSNL and our own domain for internal browsing and e-mail

Page | 29

purposes, we have also set up our own Web site. Currently, NSE is displaying its live
stock quotes on the web site (www.nseindia.com) which are updated online.

Equities
NSE started trading in the equities segment (Capital Market segment) on November 3,
1994 and within a short span of 1 year became the largest exchange in India in terms of
volumes transacted.
Trading volumes in the equity segment have grown rapidly with average daily turnover
increasing from Rs.17 crores during 1994-95 to Rs.4, 328 crores during 2003-04. During
the year 2003-04, NSE reported a turnover of Rs.1, 099,535 crores in the equities
segment accounting for 68.60% of the total Indian securities market.
The Equities section provides you with an insight into the equities segment of NSE and
also provides real-time quotes and statistics of the equities market. In-depth information
regarding listing of securities, trading systems & processes, clearing and settlement, risk
management, trading statistics etc are available here.

Listing

Page | 30

Listing means admission of securities of an issuer to trading privileges on a stock exchange


through a formal agreement. The prime objective of admission to dealings on the Exchange is to
provide liquidity and marketability to securities, as also to provide a mechanism for effective
management of trading.
Listing on NSE provides qualifying companies with the broadest access to investors, the greatest
market depth and liquidity, cost-effective access to capital, the highest visibility, the fairest
pricing, and investor benefits. NSE trading terminals are now situated in various cities and towns
across the length and breath of India.
Securities listed on the Exchange are required to fulfill the eligibility criteria for listing. Various
types of securities of a company are traded under a unique symbol and different series.
NSE plays an important role in helping an Indian companys access equity capital, by providing
a liquid and well-regulated market. NSE has about 800 companies listed representing the length,
breadth and diversity of the Indian economy which includes from hi-tech to heavy industry,
software, refinery, public sector units, infrastructure, and financial services. Listing on NSE
raises a companys profile among investors in India and abroad. Trade data is distributed
worldwide through various news-vending agencies. More importantly, each and every NSE listed
company is required to satisfy stringent financial, public distribution and management
requirements. High listing standards foster investor confidence and also bring credibility into the
markets.
NSE lists securities in its Capital Market (Equities) segment and its Wholesale Debt Market
segment

Page | 31

Listing Procedure
An Issuer has to take various steps prior to making an application for listing its securities on the
NSE. These steps are essential to ensure the compliance of certain requirements by the Issuer
before listing its securities on the NSE. The various steps to be taken include:
1. Initial Discussions
2. Approval of Memorandum and Articles of Association
3. Approval of draft prospectus
4. Submission of Application
5. Listing conditions and requirement

Listing Procedure
Initial Discussions
Authorized persons of the concerned Issuer should hold discussions with NSE personnel
regarding various requirements to be fulfilled by the Issuer for listing its securities. The
discussions should particularly cover the qualifications of the Issuer which are required
for an Issuer to be admitted for listing on the NSE and to understand all the conditions
that are precedent to listing on the NSE. The proposed Memorandum & Articles of
Association and the draft prospectus may be presented to the NSE for examination before
finalizing them.

Listing Procedure
Page | 32

Approval of Memorandum and Articles of Association


Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that the
Articles of Association of the Issuer wanting to list its securities must contain provisions
as given hereunder.
The Articles of Association of an Issuer shall contain the following provisions
namely:
a. That there shall be no forfeiture of unclaimed dividends before the claim becomes
barred by law;
b. That a common form of transfer shall be used;
c. That fully paid shares shall be free from all lien and that in the case of partly paid
shares the Issuer's lien shall be restricted to moneys called or payable at a fixed
time in respect of such shares;
d. that registration of transfer shall not be refused on the ground of the transferor
being either alone or jointly with any other person or persons indebted to the
Issuer on any account whatsoever;
e. that any amount paid up in advance of calls on any share may carry interest but
shall not in respect thereof confer a right to dividend or to participate in profits;
f. That option or right to call of shares shall not be given to any person except with
the sanction of the Issuer in general meetings.
g. Permission for Sub-Division/Consolidation of Share Certificate.
Page | 33

Note: The Relevant Authority may take exception to any provision contained in the
Articles of Association of an Issuer which may be deemed undesirable or
unreasonable in the case of a public company and may require inclusion of specific
provisions deemed to be desirable and necessary.
If the Issuer's Articles of Association is not in conformity with the provisions as stated
above, the Issuer has to make amendments to the Articles of Association. However,
the securities of an Issuer may be admitted for listing on the NSE on an undertaking
by the Issuer that the amendments necessary in the Articles of Association to bring
Articles of Association in conformity with Rule 19(2)(a) of the Securities Contract
(Regulation) Rules, 1957 shall be made in the next annual general meeting and in the
meantime the Issuer shall act strictly in accordance with prevalent provisions of
Securities Contract (Regulation) Act, 1957 and other statutes.
It is to be noted that any provision in the Articles of Association, which is not in tune
with sound corporate practice, has to be removed by amending the Articles of
Association.

Page | 34

Listing Procedure
Approval of draft prospectusThe Issuer shall file the draft prospectus and application forms with NSE. In case NSE is
not the Regional Stock Exchange then the draft prospectus and application forms have to
be filed simultaneously with the NSE when the same is filed with the Regional Stock
Exchange pertaining to the issue, for the perusal of NSE. The draft prospectus should
have been prepared in accordance with the statutes, notifications, circulars, guidelines,
etc. governing preparation and issue of prospectus prevailing at the relevant time. The
Issuers may particularly bear in mind the provisions of Companies Act, Securities
Contracts (Regulation) Act, the SEBI Act and the relevant subordinate legislations
thereto. NSE will peruse the draft prospectus only from the point of view of checking
whether the draft prospectus is in accordance with the listing requirements, and therefore
any approval given by NSE in respect of the draft prospectus should not be construed as
approval under any laws, rules, notifications, circulars, guidelines etc. The Issuers shall
file a copy of the draft prospectus given by the respective Regional Stock Exchange with
NSE. The Issuer should also submit the SEBI acknowledgment card or letter indicating
observations on draft prospectus or letter of offer by SEBI

Listing Procedure

Page | 35

Submission of Application

For Issuers listing on NSE for the first time

Listing of further Issues by Issuers already listed on NSE

Listing Fees

Security deposit (for new & fresh issues and when NSE is the Regional Stock
Exchange)

Supporting documents.

Listing Procedure
Submission of Application (For Issuers listing on NSE for the first time)
Issuers desiring to list existing/new securities on the NSE shall make application for
admission of their securities to dealings on the NSE in the forms prescribed in this regard
as per details given hereunder or in such other form or forms as the Relevant Authority
may from time to time prescribe in addition thereto or in modification or substitution
thereof.
Appendix 'A' - Clauses of Articles of Association.
Appendix 'B'- Application Letter for Listing.
Appendix 'C-1' - Listing Application providing pre-issue details of securities.
Appendix 'C-2' - Listing Application providing post-issue details of securities.
Appendix 'D'- Checklist for supporting documents ( as applicable to the issuer)
Page | 36

Appendix 'E' - Schedule of Distribution


Appendix 'F'- Listing Agreement

Listing Procedure
Submission of Application (Listing of further Issues by Issuers already listed
on NSE)
Issuers whose securities are already listed on the NSE shall apply for admission to listing
on the NSE of any further issue of securities made by them. The application for
admission shall be made in the forms prescribed in this regard or in such other form or
forms as the Relevant Authority may from time to time prescribe in addition thereto or in
modification or substitution thereof.
Appendix 'E' - Schedule of Distribution
Appendix 'G'- Application Letter for Listing of further issues.
Appendix 'H' - Listing Application providing details of securities.
Appendix 'I' - Checklist for supporting documents submitted (as applicable)

Listing Fees
The listing fees depend on the paid up share capital of your Company:

Particulars
Initial Listing Fees

Amount (Rs.)
7,500

Page | 37

Annual Listing Fees


Companies with paid up share and/or debenture capital:
Of Rs.1 crore

4,200

Above Rs.1 crore and up to Rs.5 crores

8,400

Above Rs.5 crores and up to Rs.10 crores

14,000

Above Rs.10 crores and up to Rs.20 crores

28,000

Above Rs.20 crores and up to Rs.50 crores

42,000

Above Rs.50 crores

70,000

Companies which have a paid up capital of more than Rs. 50 crores will pay additional
listing fees of Rs. 1400 for every increase of Rs. 5 crores or part thereof in the paid up
share/debenture capital.
Kindly draw your Cheques/Demand Drafts favouring National Stock Exchange of India
Limited, payable in Mumbai.

Listing Procedure
Submission of Application (Security Deposit)
(Payable only for new and fresh issues and only when NSE is the Regional Stock Exchange)

The Relevant Authority shall not grant admission to dealings of securities of an Issuer
which is not listed or of any new (original or further) issue of securities of an Issuer
excepting Mutual Funds, which is listed on the NSE unless the Issuer deposits and keeps
deposited with the NSE (in cases where the securities are offered for subscription,
whether through the issue of a prospectus, letter of offer or otherwise, and NSE is the
Page | 38

Regional Stock Exchange for the Issuer) an amount calculated at 1% of the amount of
securities offered for subscription to the public and or to the holders of existing securities
of the Issuer, as the case may be for ensuring compliance by the Issuer within the
prescribed or stipulated period of all requirements and conditions hereinafter mentioned
and shall be refundable or forfeitable in the manner hereinafter stated:
1. The Issuer shall comply with all prevailing requirements of law including all
requirements of and under any notifications, directives and guidelines issued by the
Central Government, SEBI or any statutory body or local authority or any body or
authority acting under the authority or direction of the Central Government and all
prevailing listing requirements and conditions of the NSE and of each recognized
Stock Exchange where the Issuer has applied for permission for admission to dealings
of the securities, within the prescribed or stipulated period;
2. If the Issuer has complied with all the aforesaid requirements and conditions
including, wherever applicable, its obligation under Section 73 (or any statutory
modification or re-enactment thereof) of the Companies Act, 1956 and obligations
arising therefrom, within the prescribed or stipulated period, and on obtaining a No
Objection Certificate from SEBI and submitting it to NSE , NSE shall refund to the
Issuer the said deposit without interest within fifteen days from the expiry of the
prescribed or stipulated period;
3. If on expiry of the prescribed or stipulated period or the extended period referred to
hereafter, the Issuer has not complied with all the aforesaid requirements and
conditions, the said deposit shall be forfeited by the NSE, at its discretion, and
Page | 39

thereupon the same shall vest in the NSE. Provided the forfeiture shall not release the
Issuer of its obligation to comply with the aforesaid requirements and conditions;
4. If the Issuer is unable to complete compliance of the aforesaid requirements and
conditions within the prescribed or stipulated period, the NSE, at its discretion and if
the Issuer has shown sufficient cause, but without prejudice to the obligations of the
Issuer under the laws in force to comply with any such requirements and conditions
within the prescribed or stipulated period, may not forfeit the said deposit but may
allow such further time to the Issuer as the NSE may deem fit; provided that
a. the Issuer has at least ten days prior to expiry of the prescribed or stipulated
period applied in writing for extension of time to the NSE stating the reasons
for non-compliance, and
b. the Issuer, having been allowed further time by the NSE, has before expiry of
the prescribed or stipulated period, published in a manner required by the
NSE, the fact of such extension having been allowed; provided further that
where the NSE has not allowed extension in writing before expiry of the
prescribed or stipulated period, the request for extension shall be deemed to
have been refused; provided also that any such extension shall not release the
Issuer of its obligations to comply with the aforesaid requirements and
conditions.
c. 50% of the above mentioned security deposit should be paid to the NSE in
cash. The balance amount can be provided by way of a bank guarantee, in the

Page | 40

format prescribed by or acceptable to NSE. The amount to be paid in cash is


limited to Rs.3 crores.

Eligibility Criteria for Listing


An applicant who desires listing of its securities with NSE must fulfill the following prerequisites:
A. For Initial Public Offerings (IPOs)
B. For Securities of Existing Companies
NSE staff welcomes the opportunity to discuss a companys eligibility to list before a formal
application is made. On fulfillment of the eligibility criteria, the company is required to fill in
the listing application form.

Eligibility Criteria for Listing


IPOs by Companies
Qualifications for listing Initial Public Offerings (IPO) are as below:
1. Paid up Capital

Page | 41

The paid up equity capital of the applicant shall not be less than Rs. 10 crores * and the
capitalization of the applicants equity shall not be less than Rs. 25 crores**
In respect of the requirement of paid-up capital and market capitalization, the issuers
shall be required to include, in the disclaimer clause forming a part of the offer document
that in the event of the market capitalization (Product of issue price and the post issue
number of shares) requirement of the Exchange not being met, the securities of the issuer
would not be listed on the Exchange.
* For this purpose, the post issue paid up equity capital for which listing is sought shall
be taken into account.
*For this purpose, capitalization will be the product of the issue price and the post issue
number of equity shares.
2. Conditions Precedent to Listing:

The Issuer shall have adhered to conditions precedent to listing as emerging from interalia from Securities Contracts (Regulations) Act 1956, Companies Act 1956, Securities
and Exchange Board of India Act 1992, any rules and/or regulations framed under
foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate
authority under foregoing statutes.
3. At least three years track record of either:
a. The applicant seeking listing; or
b. The promoters*/promoting company, incorporated in or outside India
Page | 42

For this purpose, the applicant or the promoting company shall submit annual reports of
three preceding financial years to NSE and also provide a certificate to the Exchange in
respect of the following:
The Company has not been referred to the Board for Industrial and Financial
Reconstruction (BIFR).
The networth of the company has not been wiped out by the accumulated losses
resulting in a negative networth.
The company has not received any winding up petition accepted by a court.
* Promoters mean one or more persons with minimum 3 years of experience of each of
them in the same line of business and shall be holding at least 20% of the post issue
equity share capital individually or severally
4. The Project/ Activity plan of the applicant must have been appraised by a financial
institution u/s 4 A of the Companies Act, 1956 or a state finance corporation or a
scheduled commercial bank with a paid up capital exceeding Rs.50 crores or a category I
Merchant Banker with a net worth of atleast Rs.10 crores or a venture capital fund with a
net worth of atleastRs. 50 crores.
5. The applicant should have working capital arrangements with a bank having a Networth
of not less than Rs.50 crores.
Provided that this Clause 4 shall not be applicable for listing of:
a) Equity shares and securities convertible into equity issued by
i.

a banking company including a local area bank (i.e. Private Sector Banks) set up
under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and which
has received license from the Reserve Bank of India or

Page | 43

ii.

a corresponding new bank set up under the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980, State Bank of India Act, 1955 and the State
Bank of India (Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks) or

iii.

an infrastructure company (a) whose project has been appraised by a Public


Financial Institution or Infrastructure Development Finance Corporation (IDFC)
or Infrastructure Leasing and Financial Services Limited (IL&FS) and (b) not less
than 5% of the project cost is financed by any of the institutions referred to in
clause (a) above, jointly or severally, irrespective of whether they appraise the
project or not, by way of loan or subscription to equity or a combination of both.

iv.

Securities other than equity shares or securities convertible into equity shares at a
later date issued by Government Companies, Public Sector Undertakings,
Financial Institutions, Nationalized Banks, Statutory Corporations, Banking
Companies and subsidiaries of Scheduled Commercial Banks.

5) The applicant desirous of listing its securities should satisfy the exchange on the
following:
a.

No disciplinary action by other stock exchanges and regulatory authorities in


past three years
The applicant, promoters/promoting company(ies), group companies, companies
promoted by the promoters/promoting company(ies) have not been in default in
payment of listing fees to any stock exchange in the last three years or has not
been delisted or suspended in the past, and has not been proceeded against by
Page | 44

SEBI or other regulatory authorities in connection with investor related issues or


otherwise.

b.

Redressal mechanism of Investor grievance


The points of consideration are:
The

applicant,

promoters/promoting

company(ies),

group

companies,

companies promoted by the promoters/promoting company(ies) track record in


redressal of investor grievances

The applicants arrangements envisaged are in place for servicing its investor.

The

applicant,

promoters/promoting

company(ies),

group

companies,

companies promoted by the promoters/promoting company(ies) general


approach and philosophy to the issue of investor service and protection
defaults in respect of payment of interest and/or principal to the

debenture/bond/fixed deposit holders by the applicant, promoters/promoting


company(ies),

group

companies,

companies

promoted

by

the

promoters/promoting company(ies) shall also be considered while evaluating a


companys application for listing. The auditors certificate shall also be obtained
in this regard. In case of defaults in such payments the securities of the applicant
company may not be listed till such time it has cleared all pending obligations
relating to the payment of interest and/or principal.

c.

Distribution of shareholding

Page | 45

The applicants/promoting company(ies) shareholding pattern on March 31 of


last three calendar years separately showing promoters and other groups
shareholding pattern should be as per the regulatory requirements.

d.

Details of Litigation
The applicant, promoters/promoting company (ies), group companies,
companies promoted by the promoters/promoting company(ies) litigation
record, the nature of litigation, status of litigation during the preceding three
years period need to be clarified to the exchange.

e.

Track Record of Director(s) of the Company


In respect of the track record of the directors, relevant disclosures may be
insisted upon in the offer document regarding the status of criminal cases filed
or nature of the investigation being undertaken with regard to alleged
commission of any offence by any of its directors and its effect on the business
of the company, where all or any of the directors of issuer have or has been
charge-sheeted with serious crimes.

Note:
In case a company approaches the Exchange for listing within six months of an IPO,
the securities may be considered as eligible for listing if they were otherwise eligible
for listing at the time of the IPO. If the company approaches the Exchange for listing
after six months of an IPO, the norms for existing listed companies may be applied

Page | 46

and market capitalization be computed based on the period from the IPO to the time
of listing.

Eligibility Criteria for Listing


Securities of Existing Companies
Existing Companies listed on other stock exchanges
1. Paid up Capital & Market Capitalization
a. The paid-up equity capital of the applicant shall not be less than Rs. 10 crores *
and the market capitalization of the applicants equity shall not be less than Rs. 25
crores**
Provided that the requirement of Rs. 25 crores market capitalization under this clause
1(a) shall not be applicable to listing of securities issued by Government Companies,
Public Sector Undertakings, Financial Institutions, Nationalized Banks, Statutory
Corporations and Banking Companies who are otherwise bound to adhere to all the
relevant statutes, guidelines, circulars, clarifications etc. that may be issued by
various regulatory authorities from time to time.
b. The paid-up equity capital of the applicant shall not be less than Rs. 25 crores *
(In case the market capitalization is less than Rs. 25 crores, the securities of the
company should be traded for at least 25% of the trading days during the last
twelve months preceding the date of submission of application by the company on
at least one of the stock exchanges where it is traded.)
c. The market capitalisation of the applicants equity shall not be less than Rs. 50
crores. **

Page | 47

* Explanation 1 For this purpose the existing paid up equity capital as well as the paid
up equity capital after the proposed issue for which listing is sought shall be taken
into account.
** Explanation 2 The market capitalization shall be calculated by using a 12 month
moving average of the market capitalisation over a period of six months immediately
preceding the date of application. For the purpose of calculating the market capitalisation
over a 12 month period, the average of the weekly high and low of the closing prices of
the shares as quoted on the National Stock Exchange during the last twelve months and if
the shares are not traded on the National Stock Exchange such average price on any of
the recognised Stock Exchanges where those shares are frequently traded shall be taken
into account while determining market capitalisation after making necessary adjustments
for Corporate Action such as Rights / Bonus Issue.
2

Conditions precedent to Listing:


The applicant shall have adhered to conditions precedent to listing as emerging from
inter-alia, Securities Contracts (Regulations) Act 1956, Companies Act 1956, Securities
and Exchange Board of India Act 1992, any rules and/or regulations framed under
foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate
authority under foregoing statutes.

At least three years track record of either:


a. the applicant seeking listing; or
b. the promoters*/promoting company, incorporated in or outside India

Page | 48

For this purpose, the applicant or the promoting company shall submit annual reports of
three preceding financial years to NSE and also provide a certificate to the Exchange in
respect of the following:
o The company has not been referred to the Board for Industrial and Financial
Reconstruction (BIFR).
o The net worth of the company has not been wiped out by the accumulated losses
resulting in a negative net worth.
o The company has not received any winding up petition accepted by a court
* Promoters mean one or more persons with minimum 3 years of experience of each of
them in the same line of business and shall be holding at least 20% of the post issue
equity share capital individually or severally.
2

The applicant should have been listed on any other recognized stock exchange for at least
last three years
The project/activity plan must have been appraised by a financial institution u/s 4A of the
Companies Act, 1956, or a state finance corporation, or a scheduled commercial bank
with a paid up capital exceeding Rs. 50 crores, or a category I Merchant Banker with a
net worth of at least Rs.10 crores or a venture capital fund with a net worth of at least Rs.
50 crores
The applicant should have working capital arrangements with a bank having a net worth
of at least Rs.50 crores.
Page | 49

The applicant has paid dividend in at least 2 out of the last 3 financial years immediately
preceding the year in which listing application has been made.
The applicant has distributable profits in at least two out of the last three financial years
(an auditors certificate must be provided in this regard).
The net worth of the applicant is at least Rs. 50 crores***
While considering the profitability / ability to distribute dividend, the non recurring
income/extraordinary income shall be excluded from the total income. Further in case of
companies where net worth criteria is satisfied on account of shares being issued at a
premium for consideration other than cash, such cases be referred to the Listing Advisory
Committee (LAC).
Net worth means: Paid up equity capital plus Reserves excluding revaluation reserve
minus Miscellaneous Expenses not written off minus balance in profit and loss account to
the extent not set off
"Provided that Clause 4 and Clause 5 shall not be applicable for listing of:
a)

Equity

shares

and

securities

convertible

into

equity

issued

by

i. a banking company including a local area bank (i.e. Private Sector Banks) set up under
sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and which has received
license

from

the

Reserve

Bank

of

India

or

ii. a corresponding new bank set up under the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and Transfer of

Page | 50

Undertakings) Act, 1980, State Bank of India Act, 1955 and the State Bank of India
(Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks)
iii. an infrastructure company (a) whose project has been appraised by a Public Financial
Institution or Infrastructure Development Finance Corporation (IDFC) or Infrastructure
Leasing and Financial Services Limited (IL&FS) and (b) not less than 5% of the project cost
is financed by any of the institutions referred to in clause (a) above, jointly or severally,
irrespective of whether they appraise the project or not, by way of loan or subscription to
equity or a combination of both.
b) Securities other than equity shares or securities convertible into equity shares at a later
date issued by Government Companies, Public Sector Undertakings, Financial Institutions,
Nationalized Banks, Statutory Corporations, Banking Companies and subsidiaries of
Scheduled Commercial Banks."
The applicant desirous of listing its securities should also satisfy the exchange on the
following:
a. No Disciplinary action has been taken by other stock exchanges and regulatory
authorities in the past three years.
The applicant, promoters/promoting company (ies), group companies, companies promoted
by the promoters/promoting company (ies) have not been in default in payment of listing
fees to any stock exchange in the last three years or has not been delisted or suspended in
the past and has not been proceeded against by SEBI or other regulatory authorities in
connection with investor related issues or otherwise.
Page | 51

b. Redressed mechanism of Investor grievance


The points of consideration are:
The applicant, promoters/promoting company(ies), group companies,

companies promoted by the promoters/promoting company(ies) track record in


redressal of investor grievances

The applicants arrangements envisaged are in place for servicing its investor

The applicant, promoters/promoting company(ies), group companies, companies


promoted by the promoters/promoting company(ies) general approach and
philosophy to the issue of investor service and protection

Defaults

in

respect

of

payment

of

interest

and/or

principal

to

the

debenture/bond/fixed deposit holders by the applicant, promoters/promoting


company (ies), group companies, companies promoted by the promoters/promoting
company (ies) shall also be considered while evaluating a companys application for
listing. The auditors certificate shall also be obtained in this regard. In case of
defaults in such payments, the securities of the applicant company may not be listed
till such time it has cleared all pending obligations relating to the payment of
interest and/or principal.
c. Distribution of shareholding

Page | 52

The applicant company/promoting company(ies) shareholding pattern on March 31 of


preceding three years separately showing promoters and other groups shareholding
pattern should be as per the regulatory requirements.
d. Details of Litigation
The applicant, promoters/promoting company(ies), group companies, companies
promoted by the promoters/promoting company(ies) litigation record, the nature of
litigation, status of litigation during the preceding three years need to be clarified to
the exchange.
e. Track Record of Director(s) of the Company
In respect of the track record of the directors, relevant disclosures may be insisted
upon in the offer document regarding the status of criminal cases filed or nature of the
investigation being undertaken with regard to alleged commission of any offence by
any of its directors and its effect on the business of the company, where all or any of
the directors of issuer have or has been charge-sheeted with serious crimes.
f. Change in Control of a Company/Utilisation of funds raised from public
In the event of new promoters taking over listed companies which results in change in
management and/or companies utilising the funds raised through public issue for the
purposes other than those mentioned in the offer document, such companies shall
make additional disclosures (as required by the Exchange) with regard to change in
control of a company and utilisation of funds raised from public.

Page | 53

Note:
Where an unlisted company merges with a company listed on other stock exchanges
and the merged entity seeks listing on the NSE, the Exchange may grant listing to the
merged entity only if the listed company (prior to the merger with the unlisted
company) meets all the criteria for listing on its own account or the unlisted company
meets the requirements for listing on the Exchange, except for the market
capitalisation condition, on its own account. In case either of the above conditions are
not met then such company may be considered for listing after a minimum period of
18 months or more or after the publication of two annual reports whichever is later,
provided it satisfies the criteria at that point of time.

Page | 54

About BSE
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich
heritage. Popularly known as "BSE", it was established as "The Native Share & Stock
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Brokers Association" in 1875. It is the first stock exchange in the country to obtain
permanent recognition in 1956 from the Government of India under the Securities
Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the
development of the Indian capital market is widely recognized and its index, SENSEX, is
tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a
demutualised and corporatised entity incorporated under the provisions of the Companies
Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005
notified by the Securities and Exchange Board of India (SEBI).
With demutualisation, the trading rights and ownership rights have been de-linked
effectively addressing concerns regarding perceived and real conflicts of interest. The
Exchange is professionally managed under the overall direction of the Board of
Directors.The Board comprises eminent professionals, representatives of Trading
Members and the Managing Director of the Exchange. The Board is inclusive and is
designed to benefit from theparticipation of market intermediaries.
In terms of organisation structure, the Board formulates larger policy issues and exercises
over-all control. The committees constituted by the Board are broad-based.The day-todayoperations of the Exchange are managed by the Managing Director and a
management team of professionals.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of India.
The systems and processes of the Exchange are designed to safeguard market integrity
and enhance transparency in operations. During the year 2004-2005, the trading volumes
on the Exchange showed robust growth.
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The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietory
system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &
settlement functions of the Exchange are ISO 9001:2000 certified.

Heritage
The oldest exchange in Asia and the first exchange in the country to be granted
permanent recognition under the Securities Contract Regulation Act, 1956, Bombay
Stock Exchange Limited (BSE) have had an interesting rise to prominence over the past
130 years.
While the BSE is now synonymous with Dalal Street, it wasnt always so. In fact the first
venues of the earliest stock broker meetings in the 1850s were amidst rather natural
environs - under banyan trees - in front of the Town Hall, where Horniman Circle is now
situated. A decade later, the brokers moved their venue to another set of foliage, this time
under banyan trees at the junction of Meadows Street and Mahatma Gandhi Road. As the
number of brokers increased, they had to shift from place to place, and wherever they
went, through sheer habit, they overflowed in to the streets. At last, in 1874, found a
permanent place, and one that they could, quite literally, call their own. The new place
was, aptly, called Dalal Street.
The journey of BSE is as eventful and interesting as the history of Indias securities
markets. Indias biggest bourse, in terms of listed companies and market capitalization,
BSE has played a pioneering role in the Indian Securities Market - one of the oldest in the

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world. Much before actual legislations were enacted, BSE had formulated comprehensive
set of Rules and Regulations for the Indian Capital Markets. It also laid down best
practices adopted by the Indian Capital Markets after India gained its Independence.
Perhaps, there would not be any leading corporate in India, which has not sourced BSEs
services in resource mobilization.
BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the
benchmark equity index that reflects the robustness of the economy and finance. At par
with international standards, BSE has been a pioneer in several areas. It has several firsts
to its credit even in an intensely competitive environment.

First in India to introduce Equity Derivatives

First in India to launch a Free Float Index

First in India to launch US$ version of BSE Sensex

First in India to launch Exchange Enabled Internet Trading Platform

First in India to obtain ISO certification for Surveillance, Clearing & Settlement

'BSE On-Line Trading System (BOLT) has been awarded the globally
recognised

the

Information

Security

Management

System

standard

BS7799-2: 2002.

First to have an exclusive facility for financial training

Moved from Open Outcry to Electronic Trading within just 50 days

An equally important accomplishment of BSE is the launch of a nationwide investor


awareness campaign - Safe Investing in the Stock Market - under which nationwide

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awareness campaigns and dissemination of information through print and electronic


medium was undertaken. BSE also actively promoted the securities market awareness
campaign of the Securities and Exchange Board of India.
In 2002, the name The Stock Exchange, Mumbai, was changed to BSE. BSE, which had
introduced securities trading in India, replaced its open outcry system of trading in 1995,
when the totally automated trading through the BSE Online trading (BOLT) system was
put into practice. The BOLT network was expanded, nationwide, in 1997. It was at the
BSE's International Convention Hall that Indias 1st Bell ringing ceremony in the history
Capital Markets was held on February 18th, 2002. It was the listing ceremony of Bharti
Tele ventures Ltd.
BSE with its long history of capital market development is fully geared to continue its
contributions to further the growth of the securities markets of the country, thus helping
India increase its sphere of influence in international financial markets.
For the premier Stock Exchange that pioneered the stock broking activity in India, 125
years of experience seem to be a proud milestone. A lot has changed since 1875 when
318 persons became members of what today is called "Bombay Stock Exchange Limited"
by paying a princely amount of Re1.
Since then, the stock market in the country has passed through both good and bad
periods. The journey in the 20th century has not been an easy one. Till the decade of
eighties, there was no measure or scale that could precisely measure the various ups and
downs in the Indian stock market. Bombay Stock Exchange Limited (BSE) in 1986 came

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out with a Stock Index that subsequently became the barometer of the Indian Stock
Market.
BSE-SENSEX, first compiled in 1986 is a "Market Capitalization-Weighted" index of 30
component stocks representing a sample of large, well-established and financially sound
companies. The base year of BSE-SENSEX is 1978-79. The index is widely reported in
both domestic and international markets through print as well as electronic media. BSESENSEX is not only scientifically designed but also based on globally accepted
construction

and

review

methodology.

The

"Market

Capitalization-Weighted"

methodology is a widely followed index construction methodology on which majority of


global equity benchmarks are based.
The growth of equity markets in India has been phenomenal in the decade gone by. Right
from early nineties the stock market witnessed heightened activity in terms of various
bull and bear runs. More recently, the bourses in India witnessed a similar frenzy in the
'TMT' sectors. The BSE-SENSEX captured all these happenings in the most judicial
manner. One can identify the booms and bust of the Indian equity market through BSESENSEX.
The launch of BSE-SENSEX in 1986 was later followed up in January 1989 by
introduction of BSE National Index (Base: 1983-84 = 100). It comprised of 100 stocks
listed at five major stock exchanges in India at Mumbai, Calcutta, Delhi, Ahmedabad and
Madras. The BSE National Index was renamed as BSE-100 Index from October 14, 1996
and since then it is calculated taking into consideration only the prices of stocks listed at
BSE.
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With a view to provide a better representation of the increased number of companies


listed, increased market capitalisation and the new industry groups, the Exchange
constructed and launched on 27th May, 1994, two new index series viz., the 'BSE-200'
and the 'DOLLEX-200' indices. Since then, BSE has come a long way in attuning itself to
the varied needs of investors and market participants. In order to fulfill the need of the
market participants for still broader, segment-specific and sector-specific indices, the
Exchange has continuously been increasing the range of its indices. The launch of BSE200 Index in 1994 was followed by the launch of BSE-500 Index and 5 sectoral indices in
1999. In 2001, BSE launched the BSE-PSU Index, DOLLEX-30 and the country's first
free-float based index - the BSE TECk Index taking the family of BSE Indices to 13.
The Exchange also disseminates the Price-Earnings Ratio, the Price to Book Value Ratio
and the Dividend Yield Percentage on day-to-day basis of all its major indices.
The values of all BSE indices (except the Dollar version of indices) are updated every 15
seconds during the market hours and displayed through the BOLT system, BSE website
and news wire agencies.
All BSE-Indices are reviewed periodically by the "Index Committee" of the Exchange.
The committee frames the broad policy guidelines for the development and maintenance
of all BSE indices. The Index Cell of the Exchange carries out the day to day
maintenance of all indices and conducts research on development of new indices.

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Objectives
1. To know about the capital market in India.
2. To know about the growth of index of capital market.
3. To know the effect of capital market in the development of companies.
4. To know about the growth of NSE and BSE.
5. To know about the role of NSE and BSE in development of Indian economy.

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Scope
1. The study will help the companies in collection of finance.
2. It will help in economic development of country.
3. It will help in growth of NSE and BSE.
4. It will help the stock market to promote the investor.
5. It will help the stock market in India to motivate the foreign investor.

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Importance
1. It will help the investor in getting information about the customers.
2. It will help the organization in plan expansion.
3. It will help the investor to know about the fluctuation in capital market.
4. It will help the country in their economic development.

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RESEARCH METHODOLOGY

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1. Comparative Summary Of Capital Requirement.

Serial
No.

Criteria

Capital Required
(Paid-Up)

BSE

MINIMUM 10 CRORES

NSE

MINIMUM 10
CRORES

Market

MINIMUM 2 TIMES OF PAID-UP

MINIMUM 25

Capitalization

CAPITAL

CRORES

At-least last 3 years

N.A.

Profit Making
Record

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The net worth of the


company has not been
4

Net Worth
Required

Minimum 20 cr.

wiped out by the


accumulated losses
resulting in a negative
net worth

Comparison when company/ies is/are already listed on other stock exchange/s

Capital Required
(Paid-Up)

MINIMUM 3CRORES

MINIMUM 10
CRORES

Market

MINIMUM 2 TIMES OF PAID-UP

MINIMUM 25

Capitalization

CAPITAL

CRORES

Profit Making
Record
Net Worth
Required

At-least two out of the


At-least last 3 years

last three financial


years

Minimum 20 cr.

Minimum 50 cr.
Minimum 2 out of the

Dividend paying
track record

Minimum 3 years

last 3 immediately
preceding financial
years
At-least three years

10

Listing Record

At-least two years listing record

listing record with any

with any Regional Stock Exchange.

Regional Stock
Exchange.

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INTERPRETATION
As per the Table No.1 (Comparative summary of capital requirement.)
Capital Required: On NSE for new companies minimum paid up capital requirement is 10 crores, while on BSE the
requirement is also 10 crores& for new companies in high technology the minimum post-issue
paid-up equity capital should be Rs.5 Crores.

Market Capitalization: On NSE the market capitalization should be 25 crores, while on BSE the minimum market
capitalisation should be Rs.50 Crores (in case of new companies in high technology).

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Profit Making Record: On NSE the company must have distributable profits in at least two out of the last three financial
years (an auditors certificate must be provided in this regard), while for listing company on BSE
Company should have profit making track record for last three years

Net Worth Required: On NSE the net worth of the company has not been wiped out by the accumulated losses
resulting in a negative net worth, while on BSE the issuer company should have a post issue net
worth (equity capital + free reserves excluding revaluation reserve) of Rs.20 crores.

Dividend paying track record: On NSE the applicant has paid dividend in at least 2 out of the last 3 financial years immediately
preceding the year in which listing application has been made(in case),while on BSE the
company should have a dividend paying track record for the last 3 consecutive years and the
minimum dividend should be at least 10%. (when company/ies is/are already listed on other
stock exchange/s).

Listing Record: On NSE the applicant should have been listed on any other recognised stock
exchange for at least last three years, while on BSE the company should have at least two years
listing record with any of the Regional Stock Exchange.

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COMPARISON OF LISTING FEES

BSE

NSE
Initial Listing Fees

Rs.20, 000

Rs.7, 500

Annual Listing Fees


Companies with paid up share and/or debenture capital:
Of Rs.1 crore
Up to Rs. 5 crores

10,000
Above Rs.1 crore and up
to Rs.5 crores

Above Rs. 5 crores


and up to Rs. 10
crores

4,200

15,000

Above Rs.5 crores and up


to Rs.10 crores

8,400

14,000

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Above Rs. 10 crores


and up to Rs. 20

30,000

crores
Additional fee of Rs.
Above 20 crores

750/- for every increase

Above Rs.10 crores and


up to Rs.20 crores
Above Rs.20 crores and
up to Rs.50 crores

28,000

42,000

of Rs. 1 crores or part


thereof.

Above Rs.50 crores

70,000

The comparison of INITIAL LISTING FEES is shown in the chart:-1

NSE

NSE

BSE

BSE

Initial Listing Fees (In Rs.)


NSE

BSE

7,500

20,000

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With the help of these charts we can simplify the comparison of listing fees. These charts depict
that listing fees on NSE is much lower than on BSE.

The FURTHER LISTING FEES on NSE is shown in the chart: -2

NSE
4,200

8,400
14,000

Of Rs.1 crore

Rs.1 cr to Rs.5 cr

Rs.5 cr to Rs. 10cr

Rs.10 cr to Rs.20 cr

70,000
28,000

Rs.20 cr to Rs.50 cr

Above Rs.50 crores

42,000

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The FURTHER LISTING FEES on BSE is shown in the chart: -3

BSE

750
10,000

30,000
15,000

Up to Rs. 5 cr
Rs.10 cr to Rs.20 cr

Rs.5 cr to Rs. 10cr


Above 20 crores*

If we take the initial listing fees so we see that NSE charges less amount when BSE charges a
huge amount & as we travel further the charges charged by NSE for listing on it is lower than the
on BSE.
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Listing Benefit
1. A premier market place
2. Visibility
3. Largest exchange
4. Unprecedented reach
5. Modern infrastructure
6. Transaction speed
7. Short settlement cycles
8. Broadcast of corporate announcements
9. Trade statistics for listed companies
10. Investor service centers
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11. Nominal listing fees`

1. A premier marketplace
The sheer volume of trading activity ensure that the impact cost is lower on NSE which in turn
reduces the cost of trading to the investor. NSEs automated trading system ensures consistency
and transparency in the trade matching which enhances investors confidence and visibility of
our market.
2. Visibility
The trading system in NSE provides unparallel level of trade and post-trade information. The
best 5 buy and sell orders are displayed on the trading system and the total number of securities
available for buying and selling is also displayed. This helps the investor to know the depth of
the market. Further, corporate announcements, results, corporate actions etc are also available on
the trading system.
3. Largest Exchange

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NSE is the largest exchange in the county in terms of trading volumes. During the year 20032004, NSE reported a turnover of Rs. 1,099,535 crores in the equities segment.
4. Unprecedented reach
NSE provides a trading platform that extends across the length and breadth of the country.
Investors from 360 centres can avail of trading facilities on the NSE Trading Network. The
Exchange uses the latest in communication technology to give instant access from every
location.
5. Modern infrastructure
NSE introduced for the first time in India, fully automated screen based trading. The Exchange
uses a sophisticated telecommunication network with over 9000 trading terminals connected
through VSATs (Very Small Aperture Terminals).

6. Transaction speed
The speed at which NSE processes orders, results in liquidity and better available prices. NSE's
trading system on an average processes 8000 orders per minute. The highest number of trades in
a day of 28,49,987 was recorded on January 05, 2005.
7. Short settlement cycles
NSE has successfully completed more than 1250 settlements without any delays.
8. Broadcast facility for corporate announcements
The NSE network is used to disseminate information and company announcements across the
country. Important information regarding the company is announced to the market through the
Broadcast Mode on the NEAT System as well as disseminated through the NSE website.
Corporate developments such as financial results, book closure, announcements of bonus, rights,

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takeover, mergers etc. are disseminated across the country thus minimizing scope for price
manipulation or misuse.
9. Trade statistics for listed companies
Listed companies are provided with monthly trade statistics for all the securities of the company
listed on NSE.
10. Investor service centers
Six investor-service centers opened by NSE across the country cater to the needs of investors.
11. Nominal listing fees
The listing fee charged by NSE is much lower compared to the listing fees charged BSE.

LIMITATIONS
The limitations of this project arise from the time period assigned to me in this project. Since I
had to work only for two months.
This project merely tells about the listing procedure of equities on NSE & BSE.

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Conclusion
On the basis of above stated study it has been assorted that with respect to technology, listing
fees, listing procedure, eligibility criteria of listing & listing requirements the National Stock
Exchange has the edge.
Despite the fact that Bombay Stock Exchange is older & has high level of trading volume.

However, Many market Players, Brokers, sub-brokers, trading firms etc. deal through the
Bombay Stock Exchange.

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Bibliography
google.com
nseindia.com
bse.com
myiris.com
indiabulls.com

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