DIT SCHOOL OF BUSINESS

PRESENTATION ON
INITIAL PUBLIC OFFERING
IPO

PRESENTED BY :-
SAJU THOMAS
AVINASH
 IPO DEFINITION
• Definition
• Initial Public Offering. The first sale of stock by a
company to the public. Companies offering an IPO
are sometimes new, young companies, or sometimes
companies which have been around for many years
but are finally deciding to go public. IPOs are often
risky investments, but often have the potential for
significant gains. IPOs are often used as a way for a
young company to gain necessary market capital.
 Key Terms used in IPO
• Allocation
• After market
• Broken IPO
• First day close
• Float
• Green shoe
• Hot issue
• Red herring
• Over subscribed
• Under subscribed
 PROCESS OF ISSUE OF IPO
• The Issuer who is planning an offer nominates lead merchant
banker(s) as 'book runners'.
• The Issuer specifies the number of securities to be issued and
the price band for the bids.
• The Issuer also appoints syndicate members with whom orders
are to be placed by the investors.
• The syndicate members input the orders into an 'electronic
book'. This process is called 'bidding' and is similar to open
auction.
• The book normally remains open for a period of 5 days.
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• Bids have to be entered within the specified price band.
• Bids can be revised by the bidders before the book
closes.
• On the close of the book building period, the book
runners evaluate the bids on the basis of the demand at
various price levels.
• The book runners and the Issuer decide the final price
at which the securities shall be issued.
• Generally, the number of shares are fixed, the issue size
gets frozen based on the final price per share.
• Allocation of securities is made to the successful
bidders. The rest get refund orders.
 COAL INDIA IPO
• CIL was incorporated in 1973 and is wholly owned by
the Government of India .
• It is the world’s largest coal company by production as
well as reserves, having total coal production of 431.26
million tons per annum (as of 1 April 2010) and
reserves of 18.86 billion tonnes.
• * Cash & Bank balances = Rs.39,077.76 crores
* Debt = Rs.2086.85 crores
* Net Worth = Rs.25,843.74 crores.
• 80% of worlds coal reserves are held by company. 71%
of power need in India is coal based.
• This is the first IPO in India which has received 5 out
of 5 ratings from all three rating agencies - CARE,
ICRA and other one Crisil .
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• Largest amount IPO in Indian history (earlier was
reliance power IPO with 11, 000 rs)
• Issue Price 225 – 245
• To collect 15,200 Cr from the market .
• Offering more than 63 cr shares via IPO
• The issue was oversubscribed by 15.28 %
• The Govt. stake after dilution will be 89.99%
• The issue was open from 18 th oct to 20 th oct for
QIB and 21st oct for non – QIB .
• Retail & employees were to get 5 % discount
• Demat accounts to increase from current 1.8 crore
which is equal to 1.5 % of the Indian population
 THANK YOU !!!
QUESTIONS WELCOMED