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📚 Learn/ / Prospectus and Allotment of Securities
Microlesson · 5-min read

Definition of Listed Company and Exceptions

# Listed Company — Definition and Exceptions

## What is a Listed Company?

A listed company is one that has its securities listed on a recognized stock exchange. The Companies Act, 2013 (read with the SCRA, 1956) treats listing as a qualifier for several disclosure and governance obligations.

## Exceptions — Companies NOT treated as Listed

Even though their securities appear on a stock exchange, the following are not considered listed companies:

### (a) Public Companies

Public companies that have not listed their equity shares, but have only listed:

  • Non-convertible debt securities issued on private placement basis (under SEBI regulations); or
  • Non-convertible redeemable preference shares issued on private placement basis; or
  • Both of the above.

### (b) Private Companies

Private companies that have listed only non-convertible debt securities on private placement basis on a recognized stock exchange (under SEBI regulations).

### (c) Foreign Listings

Public companies that have not listed equity shares on Indian stock exchanges but whose equity shares are listed in foreign jurisdictions as specified under Section 23(3).

## Note on Securities

Securities do not include instruments providing combined insurance + investment benefits (e.g., unit-linked insurance policies / ULIPs).

## Quick Memory Aid (3-Bucket Rule)

ExceptionEquity Listed?What is Listed?
Public Co. (a)NoOnly NCDs / NCRPS (private placement)
Private Co. (b)N/AOnly NCDs (private placement)
Public Co. (c)Not in IndiaEquity listed abroad u/s 23(3)

Worked example

### Example 1

Example 1: ABC Ltd., a public company, has not issued equity to the public but has issued non-convertible debentures on a private placement basis listed on BSE. Is ABC a listed company?

Answer: No. Under the exception in (a), a public company that has listed only NCDs on private placement basis is NOT a listed company.

### Example 2

Example 2: XYZ Pvt. Ltd. has listed its NCDs (privately placed) on a recognized stock exchange. State its status.

Answer: As per exception (b), XYZ Pvt. Ltd. is NOT a listed company despite the NCDs being listed.

⚠️ Common exam mistakes

  • Treating every company whose any security is listed as a 'listed company'.
  • Forgetting that ULIPs are NOT securities for the purposes of the Companies Act.
  • Confusing public-placement listings with private-placement listings — the exception applies only to private placement.
  • Missing the foreign listing exception (u/s 23(3)).
Bare-Act text Section 2(52) · Companies Act, 2013 · click to expand
Section 2(52): 'listed company' means a company which has any of its securities listed on any recognised stock exchange. Provided that such class of companies, which have listed or intend to list such class of securities, as may be prescribed in consultation with SEBI, shall not be considered as listed companies.
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