What is listing, its Importance and Benefits of listing. Listing in business language means allowing the securities of a company to trade on the stock exchanges. In order to trade its securities over stock exchanges and to raise the funds companies will go for listing. The primary objective of listing is to provide liquidity and marketability with free flow of trade to be happened on the stock exchange
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Benefits of listing :
(1) Distinct Advertising value :
When the company go for listing then the name of the company will be heard by the public through the print , electronic media as a new initial public offer. It brings a kind of publicity to the company. If the founding promoters are of great reputation and value then the company will definitely Penetration into the stock market’s stakeholders.It helps the company to gain national importance and wide spread recognition.
(2) Access to foreign investment :
Listing is an indication that the company is ready to comply with the rules and regulations imposed by the stock exchanges, which encourages the Institutional investors especially foreign investors. This makes the company to grab the attention nation wide.
(3) Flexible fund raising :
The company can can raise the funds from the public when ever required. There’s a significant difference in demand for the securities of listed and non listed company. Listing adds value to a company which may help it for easy further fund raising.
(4) Liquidity :
Listing makes the securities of a company highly liquid, so that it can be traded on the stock exchange freely without any exchange obstacles.
(5)Additional value :
Now a days banks and financial institutions consider the listed securities as collateral security against any loans to be granted. Hence no need for searching alternative collateral like gold , land documents, property documents etc.