How does Dual Listing of companies work ?

[hemanthg]

Hi,

Many companies like HDFC Bank are listed on the NSE and BSE. I have two doubts pertaining to this:

1. Are the same shares traded on both exchanges or the companies have to allot a particular number of the shares in the company to the respective exchanges.

2. If the share listed on both exchanges are different (i.e. the company allots some amount of unique shares to each exchange to be traded in). How is the market capitalization calculated in this instance ?

Thank you.

 

[bhishek bansal]

Hi,

Many companies like HDFC Bank are listed on the NSE and BSE. I have two doubts pertaining to this:

1. Are the same shares traded on both exchanges or the companies have to allot a particular number of the shares in the company to the respective exchanges.

2. If the share listed on both exchanges are different (i.e. the company allots some amount of unique shares to each exchange to be traded in). How is the market capitalization calculated in this instance ?

Thank you.

heyy Hemanth,
you are right, many companies are listed on NSE and BSE both. regarding your first question, the companies do not allot a particular number of shares in the company to respective exchanges rather they allot the same shares according to their requirements and financial management but shares are traded on the the exchanges according to the demand and supply conditions respectively.
regarding your second question, the market capitalization of a company is different on the exchanges. it is calculated as number of shares*current market price. lets take the example of TCS, tata consultancy service, its price on NSE is 2600 and market cap. is 5.10 Trillion while on BSE the price is 2590.35 while market cap is 5.08 Trillion.

 

[hemanthg]

Thanks for the bhishek. I was just checking out moneycontol.com and etmarkets.com. Both the websites show only one marketcap for companies listed under BSE and NSE. Is this the average of both the marketcaps ?

 

[bhishek bansal]

heyy hemanth,

you will find the same market cap for some companies, the reason being that the price is almost same. for example you can go on google finance and check for TCS market cap for both BSE and NSE

 

[hemanthg]

Got it. Thanks for that bhiskek :thumb: