Listing means the formal admission of securities of a company to the trading platform of the Exchange. It is a significant occasion for a company in the journey of its growth and development. It enables a company to raise capital while strengthening its structure and reputation. It provides liquidity to investors and ensures effective monitoring of compliance of the issuer and trading of the securities in the interest of investors.
Most companies reach a level wherein additional capital is required to be infused to fund the company's growth / expansion plans. Going public is thereby a method of overcoming these constraints. By listing on a Stock Exchange, the company increases shareholder base and enhances credibility.
Going public improves company’s visibility and credibility among institutions and the investing public due to complying with various regulatory norms and ensuring transparency while conducting operations.
Listing stimulates liquidity, giving shareholders the opportunity to realize the value of their investments. It allows shareholders to transact in the shares of the company, sharing risks as well as benefitting from any increase in the organizational value.
Going public increases visibility and improves public perception of the organization, thereby increasing employee value and morale. It may also lead to hiring of new staff and may facilitate stock-based payments such as ESOPs etc.
Listing brings transparency and efficiency in the overall operations of the company. The board and management team of a listed company has accountability towards it shareholders. Further, listed companies also need to ensure timely compliance by providing information / disclosure to the Exchange / shareholders as laid down in the Listing Agreement or applicable guidelines.