What Is IPO-less Listing?

By Roshni Agarwal
Subscribe to GoodReturns
For Quick Alerts
Subscribe Now  
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    IPO-less listing or listing of a company on stock exchanges without an IPO issue is what is referred as IPO-less listing is common parlance. Though the phenomena is quite rare in the Indian context, nonetheless guidelines by the capital market regulator SEBI in this direction came as a big relief for start ups and SMEs who wish to take the direct listing route.

    What Is IPO-less Listing?

    Conditions to be met for direct listing by companies

    SEBI guidelines state that a small and medium enterprise which intends to go public without an IPO issue has to be less than 10 years old.

    Revenues in any of the financial year should not exceed Rs. 100 crore mark.

    Before the listing, there has to be a minimum public shareholding of 25%.

    The concerned company with listing plans upon listing has to issue its shares to the shareholders of a listed company as per the amalgamation or reconstruction arrangement.
    Example of a company listing on exchanges without an IPO issue or IPO-less listing
    Recently, Aditya Birla Capital which met the eligibility criteria to list on the bourses without an IPO issue with 25.6% public shareholding in the company went public on September 1.

    The IPO-less listing of the financial services arm of the Aditya Birla group was part of the composite scheme of arrangement in which Aditya Birla Nuvo and Grasim Industries merged whereas the financial services business of the company was spun off into a new entity named Aditya Birla Capital.

    So, in the arrangement, Grasim issued its 3 shares for 10 shares of Aditya Birla Nuvo. And, investors in Grasim for every equity share held were given 7 shares of Aditya Birla Capital.

    Thus, in a case of IPO-less listing, the company begins to trade on the bourses without an IPO issue and the existing shareholders can freely sell their shares while public investors can invest in them.

    Goodreturns.in

    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more