Change of Definition of Listed Company and Companies not to be considered as Listed Companies

Change of Definition of Listed Company and Companies not to be considered as Listed Companies

Kind Attn. Stakeholders,

In consultation with the Securities and Exchange Board of India, the Ministry of Corporate Affairs has amended the Companies (Specification of Definitions Details) Rules, 2014 and notified the Companies (Specification of Definitions Details) Second Amendment Rules, 2021 which shall come into force with effect from 1^st April 2021 with respect to change of definition of “LISTED COMPANY” under Section 2 (52) of Companies Act, 2013.

The Ministry has inserted a new provision or Rule 2A (Companies not to be considered as Listed Companies) after Rule 2 of the Companies (Specification of Definitions Details) Rules, 2014. According to these provisions following classes of Companies shall not be considered as Listed Companies:

1.   Public Companies which have not listed their equity shares on a recognized Stock Exchange but have listed their-

a)Non-Convertible Debt (NCD) securities issued on a private placement basis in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008 or,

b)Non-Convertible Redeemable Preference Shares (NCRPS) issued on a private placement basis in terms of SEBI (Issue and Listing of Non-Convertible Redeemable preference shares) regulations, 2013

c)Both categories of (i) and (ii) above.

2. Private Companies which have listed their non-convertible debt securities on a private placement basis on a recognized stock exchange in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008,

3. Public Companies which have not listed their equity shares on a recognized stock exchange but whose equity shares are listed on a stock exchange in the jurisdiction as specified in section 23(3) of the Companies Act, 2013.

After this amendment, the definition of Listed Company will mainly comprise of Public Companies offering securities to the public i.e. Listed equity in India (with or without ADR/GDR listed overseas), Listed Debt Securities pursuant to a public issue, or Listed NCRPS pursuant to the public issue.