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Listing and Issue of Security, India

Listing and Issue of Security, India

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Published by focusindiagroup
A complete guide to Listing and Issuing Security in India.
A complete guide to Listing and Issuing Security in India.

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Categories:Types, Business/Law
Published by: focusindiagroup on Aug 12, 2011
Copyright:Attribution Non-commercial

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03/10/2014

 
 
F
OCUS
I
NDIA
G
ROUP
|
Deepak Pareek
 
INDIA
 
LISTING AND ISSUE OF SECURITY 
 
 
- 1 -
www.focusindiagroup.in
 
CONTENTS
MERCHANT BANKING ................................................................ - 2 -
An Introduction ........................................................................ - 2 -Categories Of Merchant Bankers ................................................. - 7 -Different Kinds Of Issues ........................................................... - 8 -
Initial Public OFFERING (IPO) ................................................ - 10 -
An Introduction ....................................................................... - 10 -
Trends In IPO‟s
....................................................................... - 13 -Eligibility Norms For An IPO ...................................................... - 17 -SEBI Guidelines ....................................................................... - 20 -Principal Steps In An IPO .......................................................... - 25 -Intermediaries Involved And Their Roles ..................................... - 27 -Cost Of An Issue ...................................................................... - 31 -Pricing Of An Issue................................................................... - 32 -The Process Of Book Building .................................................... - 36 -Marketing And Promotion Of An IPO ........................................... - 39 -Pre Issue Obligations ................................................................ - 43 -Post Issue Obligations .............................................................. - 44 -
Other Issues Related To IPO‟s
................................................... - 45 -
RIGHTS ISSUE ........................................................................ - 47 -
What Is A Rights Issue? ............................................................ - 47 -Legal Aspects .......................................................................... - 47 -Regulatory Framework For Rights Issues .................................... - 48 -Advantages And Disadvantages Of A Rights Issue ........................ - 50 -
INEFFICIENCIES ..................................................................... - 52 -
Inefficiencies/Bottlenecks In The IPO Process .............................. - 52 -Improving Efficiency In The IPO Process ..................................... - 57 -
Appendix 1 ............................................................................. - 61 -
 
 
- 2 -
www.focusindiagroup.in
 
MERCHANT BANKING
A
N
I
NTRODUCTION
 
Organizations raise capital to fund their expansion plans, working capitalrequirements etc. by issuing securities in the primary market. MerchantBankers act as intermediaries between the issuers of capital and theultimate investor, who purchases these securities. Merchant Banking canbe broadly defined as financial intermediation that matches the entitiesthat need capital and those that have capital. Merchant bankers facilitatethe flow of capital in the market.Merchant banking activities, especially those covering issue andunderwriting of shares and debentures are regulated by the
Merchant Bankers Regulations
given by the
Securities and Exchange Board of  India (SEBI)
.The Securities and Exchange Board of India (MerchantBanker) Rules 1992 defines a Merchant Banker as:
 A person who is engaged in the business of issue management either by making arrangements regarding selling, buying, or  subscribing to securities as Manager, Consultant, Advisor or rendering corporate advisory services in relation to such issue
management.” 
 
The merchant banker plays a vital role in channelizing the financialsurplus of the society into productive investment avenues. The merchantbanker has a fiduciary role in relation to the investors. He plays the leadrole in the issue of a security. He is the leader among the intermediariesassociated with the issue. He is required to guide and co-ordinate theactivities of the Registrar to the issue, Bankers to the issue, AdvertisingAgency, Printers, Underwriters, Brokers, etc.The merchant banker has to ensure the compliance of all the laws andregulations governing the securities market from time to time by RBI,

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