{"id":6063,"date":"2019-08-24T19:25:50","date_gmt":"2019-08-24T13:55:50","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=6063"},"modified":"2020-04-18T15:38:59","modified_gmt":"2020-04-18T10:08:59","slug":"top-10-benefits-of-listing-companies-on-a-stock-exchange","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/","title":{"rendered":"Top 10 Benefits of Listing on Stock Exchange"},"content":{"rendered":"\n<p class=\"has-drop-cap\">We have heard a lot about companies listing on the stock exchange. But a very few of us are aware of the benefits of stock exchange listing. <\/p>\n\n\n\n<p>Listed companies get more exposure as\ncompared to unlisted. Moreover, the shares of a listed company are freely\ntradable, and investors have the choice to sell and purchase them at their\ndiscretion. <\/p>\n\n\n\n<p>Likewise, companies listed on the\nstock exchange have got a plethora of advantages. Generally, there are two\ntypes of companies- listed and unlisted. From listing we mean the company\nlisted on the stock exchange. <\/p>\n\n\n\n<p>Both the listed and unlisted\ncompanies have their own pros and cons and differ from each other on several\ngrounds.<\/p>\n\n\n\n<p>However, both of them are formed with\nthe common objective of profit maximization. Hence, in this piece of article,\nwe have put some light on how listing on the stock exchange will help you take\nyour business to the next level.<\/p>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your IPO or Comapny Takeover or SEBI Advisory Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/mergers-and-acquisitions\"><span>Mergers and Acquisitions<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\"><span>Buyback of Shares<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\"><span>Merger and Amalgamation<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/public-issues\"><span>Public Issues<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/rights-issue\"><span>Rights Issue<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/preferential-allotment\"><span>Preferential Allotment<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/company-takeover\"><span>Company Takeover<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/issue-of-debentures\"><span>Issue of Debentures<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\"><span>Insurance Broker License<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a29e04aace52\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a29e04aace52\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#What_is_a_Stock_Exchange\" title=\"What is a Stock\nExchange?\">What is a Stock\nExchange?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#What_is_Listed_Company\" title=\"What is Listed\nCompany?\">What is Listed\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#List_of_Stock_Exchanges_in_India\" title=\"List of Stock\nExchanges in India\">List of Stock\nExchanges in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Top_Ten_Benefits_of_Stock_Exchange_Listing_in_India\" title=\"Top Ten Benefits of Stock Exchange Listing in India\">Top Ten Benefits of Stock Exchange Listing in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Boosted_Profile\" title=\"Boosted Profile\">Boosted Profile<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Access_to_Capital\" title=\"Access to\nCapital\">Access to\nCapital<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Collateral_Value_of_Securities\" title=\"Collateral Value\nof Securities\">Collateral Value\nof Securities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Capacity_to_Uphold_Control\" title=\"Capacity to\nUphold Control\">Capacity to\nUphold Control<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Liquidity\" title=\"Liquidity\">Liquidity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Transparency_and_efficiency\" title=\"Transparency and\nefficiency \">Transparency and\nefficiency <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Enhanced_Visibility\" title=\"Enhanced\nVisibility\">Enhanced\nVisibility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#High_Returns\" title=\"High Returns\">High Returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Increased_Exposure\" title=\"Increased\nExposure\">Increased\nExposure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/top-10-benefits-of-listing-companies-on-a-stock-exchange\/#Increased_Accountability\" title=\"Increased\nAccountability\">Increased\nAccountability<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Stock_Exchange\"><\/span>What is a Stock\nExchange?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before we discuss the stock exchange,\nlet\u2019s understand what is meant by an exchange. <\/p>\n\n\n\n<p>An exchange is an\nassociation\/organization which hosts a market where stocks, commodities, bonds,\nfutures and options, etc. are traded. Sellers and Buyers come together on an\nexchange to trade financial instruments at specific hours of business days. <\/p>\n\n\n\n<p>Now coming to the stock exchange,\nit\u2019s a facility provided to companies where stocks are traded. Any company\nwilling to trade in the stock exchange must be listed on it. The exchange\nfacilitates the issuance and redemption of securities. <\/p>\n\n\n\n<p>In India, there are two more popular stock exchanges, namely- Bombay Stock Exchange and National Stock Exchange. However, we have a total of six stock exchanges in India.<\/p>\n\n\n\n<p><strong><em>Note:<\/em><\/strong><em> Stock exchange does not own\nthe stocks. It only lets companies\/entities to trade the stocks. It is similar\nto a vegetable market where buyers purchase vegetable from the sellers at a\nparticular location but the market doesn\u2019t own the vegetables.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Listed_Company\"><\/span>What is Listed\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A listed company is the one whose\nshares are traded\/quoted\/listed on an official stock exchange for public\ntrading. Such companies have to adhere to the listing requirements of that\nexchange strictly. Besides, this may also consist of a minimum earning level\nand number of shares listed on the stock exchange. <\/p>\n\n\n\n<p>Usually, such companies take out an\nIPO (Initial Public Offering) through which they sell their shares to the\npublic. In turn, they receive capital. After that, the stock exchange lists\nsuch companies and let them trade their shares. <\/p>\n\n\n\n<p>The price of the shares is decided on\nthe basis of the supply-demand of the share. The BSE (Bombay Stock Exchange) in\nIndia lists over 600 companies. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"List_of_Stock_Exchanges_in_India\"><\/span>List of Stock\nExchanges in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As\nper <a href=\"https:\/\/www.sebi.gov.in\/stock-exchanges.html\">SEBI<\/a>, there are\na total of six stock exchanges in India out of which three are permanent. The\nlist of the same is given below:<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>S.No.<\/strong>\n  <\/td><td>\n  <strong>Name<\/strong>\n  <\/td><td>\n  <strong>Valid Upto<\/strong>\n  <\/td><\/tr><tr><td>\n  1.\n  <\/td><td>\n  BSE\n  (Bombay Stock Exchange) Ltd.\n  <\/td><td>\n  Permanent\n  <\/td><\/tr><tr><td>\n  2.\n  <\/td><td>\n  Calcutta\n  Stock Exchange Ltd.\n  <\/td><td>\n  Permanent\n  <\/td><\/tr><tr><td>\n  3.\n  <\/td><td>\n  India\n  International Exchange (India INX)\n  <\/td><td>\n  Dec\n  28, 2019\n  <\/td><\/tr><tr><td>\n  4.\n  <\/td><td>\n  Metropolitan\n  Stock Exchange of India Ltd.\n  <\/td><td>\n  Sep\n  15, 2019\n  <\/td><\/tr><tr><td>\n  5.\n  <\/td><td>\n  National\n  Stock Exchange of India Ltd.\n  <\/td><td>\n  Permanent\n  <\/td><\/tr><tr><td>\n  6.\n  <\/td><td>\n  NSE\n  IFSC Ltd.\n  <\/td><td>\n  May\n  28, 2020\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Top_Ten_Benefits_of_Stock_Exchange_Listing_in_India\"><\/span>Top Ten Benefits of Stock Exchange Listing in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Companies listed on the stock exchange get exposure, capacity to uphold control, increased accountability, etc. Apart from this, there are several benefits of stock exchange. We have brought to you ten topmost advantages of the same as given below:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Boosted_Profile\"><\/span>Boosted Profile<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One of the most significant benefits\nof listing companies on the stock exchange is that listed companies have a\nbetter profile.<\/p>\n\n\n\n<p>Furthermore, they are more visible\nand recognizable when compared to their privately-held counterparts. In turn,\nthis helps the company to allure new customers and clients towards it. <\/p>\n\n\n\n<p>Besides, it also aids in drawing the\nattention of media, which might be daunting and expensive for unlisted\ncompanies. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Access_to_Capital\"><\/span>Access to\nCapital<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>According to studies, one of the\nmajor impairments to business growth is the lack of affordable capital. <\/p>\n\n\n\n<p>However, companies listed on stock\nexchanges can easily raise affordable capital by dispensing more shares to\ninvestors for the buying purpose. <\/p>\n\n\n\n<p>Additionally, the capital raised\ncould be utilized for the company\u2019s growth and paying for different costs. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Collateral_Value_of_Securities\"><\/span>Collateral Value\nof Securities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Lenders accept the listed securities\nas collateral for credit facilities. Moreover, a listed company is eligible to\nborrow from the financial institutions easily since it is rated favourably by\nthe lenders of capital. <\/p>\n\n\n\n<p>Furthermore, the company can opt for\nraising extra funds from the public through the new issue market with high\nassurance. Hence, listing a company on a stock exchange would surely be\nbeneficial. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capacity_to_Uphold_Control\"><\/span>Capacity to\nUphold Control<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Usually, listed companies do not\ndepend on the capital provided by venture investors. In return for acquiring\nshares of a confidentially-held company, venture capitalists have to regularly uphold\non possessing some degree of the company\u2019s regulation. <\/p>\n\n\n\n<p>Stock exchanges let companies maintain more control and sovereignty, for the reason that people who get the shares of a publicly-traded corporation only hold the limited rights accessible to all stakeholders.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Liquidity\"><\/span>Liquidity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The listing of the company reinforces liquidity by providing shareholders the opportunity to realize their investment value. Besides, it lets shareholders negotiate in the shares of the company, sharing risks and benefitting from any increase in the organizational value. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transparency_and_efficiency\"><\/span>Transparency and\nefficiency <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Transparency and efficiency are two such aspects that are crucial for the company\u2019s operation and growth. Listing brings both efficiency and transparency to the company. Besides, the management team and board of the listed company hold accountability towards its shareholders.<\/p>\n\n\n\n<p>Furthermore, the listed companies also require following the timely compliance by providing disclosure to the Exchange\/Information\/shareholders as per the applicable guidelines or as setting up in the listing agreement. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Enhanced_Visibility\"><\/span>Enhanced\nVisibility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When the company goes public, it\nenhances its credibility as well as visibility among institutions and the\ninvesting public. The same is due to the reason that such companies have to\ncomply with several regulatory norms. Furthermore, at the time of conducting\noperations, it ensures complete transparency.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"High_Returns\"><\/span>High Returns<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Achieving a higher return on investment is something every company or business in the world requires. Stocks are uncertain assets that imply that they don\u2019t have any assured return and have the risk of losing money. <\/p>\n\n\n\n<p>Nevertheless, the stock market\u2019s long-run trend has been rising indisputably. Stocks have the uppermost return of any venture asset over the long term. Hence, it is again one of the most important benefits of stock exchange and listing. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increased_Exposure\"><\/span>Increased\nExposure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A company listed on the stock exchange often gets more exposure than others. IPOs are mostly advertised and could be covered in investment journals, financial magazines, and news stories. <\/p>\n\n\n\n<p>Investors are more interested to\ninvest in listed companies. In turn, the company grows even more when more\ninvestor invests more capital in the same. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increased_Accountability\"><\/span>Increased\nAccountability<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Companies listed on the stock exchange have greater financial accountability. Furthermore, every listed company needs to follow the exchange rules strictly. <\/p>\n\n\n\n<p>Besides, it must be transparent in every business dealing and financial data reporting. In turn, it lets listed companies to promote accountability for the actions of all company managers, leaders, and insiders.<\/p>\n\n\n\n<p>In addition, a company that needs to be transparent and financially accountable might savor greater success than that privately-held.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/how-to-register-a-mutual-fund-with-sebi\/\" target=\"_blank\" rel=\"noopener noreferrer\">How to Register a Mutual Fund with SEBI<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>We have heard a lot about companies listing on the stock exchange. But a very few of us are aware of the benefits of stock exchange listing. Listed companies get more exposure as compared to unlisted. Moreover, the shares of a listed company are freely tradable, and investors have the choice to sell and purchase [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":6064,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[546],"tags":[449,489],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6063"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=6063"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6063\/revisions"}],"predecessor-version":[{"id":10116,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6063\/revisions\/10116"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/6064"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=6063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=6063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=6063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}