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 -


Organizations raise capital to fund their expansion plans, working capital requirements etc. by issuing securities in the primary market. Merchant Bankers act as intermediaries between the issuers of capital and the ultimate investor, who purchases these securities. Merchant Banking can be broadly defined as financial intermediation that matches the entities that need capital and those that have capital. Merchant bankers facilitate the flow of capital in the market. Merchant banking activities, especially those covering issue and

underwriting 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 (Merchant Banker) 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 financial surplus of the society into productive investment avenues. The merchant banker has a fiduciary role in relation to the investors. He plays the lead role in the issue of a security. He is the leader among the intermediaries associated with the issue. He is required to guide and co-ordinate the activities of the Registrar to the issue, Bankers to the issue, Advertising Agency, Printers, Underwriters, Brokers, etc. The merchant banker has to ensure the compliance of all the laws and regulations governing the securities market from time to time by RBI,

Regulatory Framework Capital Compliance


Market Information









SEBI, Companies Act, Stock Exchanges Listing requirements etc. He may also be called upon to assist the statutory authorities in developing a regulatory framework for orderly growth of capital markets.  Management of Debt and Equity Offerings: This is the

traditional operation for most of the merchant bankers in India. The role of the merchant banker is dynamic as he has to capitalize on the opportunities available in the market. He has to assist his corporate clients in raising funds from the market. He may also be required to counsel them on various issues that affect their finances. The main area of this role includes:     Instrument designing Pricing of the issue Registration of offer document Underwriting support

  

Marketing of the issue Allotment and refund Listing on stock exchanges

 Placement and Distribution: The distribution network of the merchant banker can be classified as institutional and retail. The network of institutional investors consists of Mutual Funds, Foreign Institutional Investors, Banks, Domestic and Multinational Financial Institutions, Private Equity Funds, Pension Funds etc. The size of this network represents the wholesale reach of the merchant banker. The retail distribution reach depends upon the networking with the investors. Many merchant bankers have associate firms which are brokers on the stock exchange. These brokers appoint sub-brokers at various geographical locations to service both the primary market and secondary market needs of the local investors. The distribution network can be used to distribute various financial products like equity shares, debt instruments, mutual fund products, fixed deposits, insurance products, commercial paper etc.  Rights Issues of Shares: If a public company wants to increase its subscribed capital by allotment of further shares, such further shares should be first offered to the existing shareholders, in proportion to the capital paid up on the shares held by them at the date of such offer. The shareholders to whom such an offer is made are not under any legal obligation to accept the offer. On the other hand, they have a right to renounce the offer in favour of any person. Shares so offered by a public company to its existing shareholders are called rights shares. For rights issue by listed companies exceeding Rs. 50 lakhs, the issue should be managed by a SEBI – registered merchant banker.  Corporate Advisory Services: Merchant banker‟s offer customized solutions to the financial problems of their clients. One of the key areas for the advisory role is financial structuring. The process includes determining the appropriate level of gearing and advising the company

whether to leverage, de-leverage or maintain its current debt-equity levels. The company‟s working capital practices are studied and alternative working capital policies suggested. The merchant banker may also explore the possibility of refinancing high cost funds with alternative cheaper funds. Another area of advice is rehabilitation and turnaround management. In case of sick units, they may design a revival package in co-ordination with the banks and financial institutions.  Project Advisory: Merchant bankers are sometimes associated with their clients from the early stage of their project. They assist companies in conceptualizing the project idea when it is in a nebulous stage. Once the project is conceptualized, they carry out the initial feasibility studies to examine its viability. They also help in the preparation of the detailed project report and offer project appraisal services to the clients.  Loan Syndication: Merchant bankers arrange to tie up loans for their clients. The first step involves analyzing the client‟s cash flow patterns so that terms of borrowings can be defined to suit the cash flow requirements. The merchant banker then prepares the loan memorandum. The loan memorandum is then circulated to various banks and financial institutions and they are invited to participate in the syndicate. The banks then indicate the amount of exposure they are willing to take and the interest rates thereon. The terms are further negotiated and fine-tuned to match the requirements of both the parties. The final allocation is done to the various members of the syndicate. The merchant banker also helps the clients in loan documentation procedures.  Venture Capital and Mezzanine Financing: The venture capital business has emerged from a fragmented industry dominated by wealthy individuals/families to an increasing institutionalized sector. The size of the deals has increased and it is possible for even start – up companies to raise huge capital from venture firms. The number of

Venture Capital firms has significantly rise and several industry specific venture funds have been set up. The association of a merchant banker to handle the entire deal flow is becoming increasingly imperative. Merchant bankers play several roles such as preliminary screening of the company, assistance to venture investors in conducting their due diligence exercise, valuation of the company, etc. Mezzanine Financing refers to the late stage financing. At this stage a company is usually profitable and has a business track record. The company needs fresh induction of capital to finance its growth plans. However the conditions in the IPO market may not be favorable to make an offering. The state of the IPO markets affects both, the availability of capital and pricing. In such a scenario, mezzanine financing acts as a viable funding alternative. This round of financing is usually in lieu of going public. Some Venture funds and Private equity funds offer mezzanine finance to potential IPO companies. These funds act as warehouses for investments and later divest their stake through public offering.  Mergers and Acquisitions: Mergers and Acquisitions are

becoming increasingly significant in terms of services offered by merchant bankers in India. The industry is passing through a transition phase of restructuring. Companies are engaged in efforts to consolidate themselves in areas of their core competencies and to divest those businesses where they do not have any competitive advantage. Merchant bankers have been quick to capitalize on these opportunities. The role of a merchant banker is that of a financial engineer rather than that of a business consultant. Most merchant bankers try to identify targets which will help their clients to achieve specified objectives.  Takeover Defense: With the high level of hostile takeover activity in recent years, takeover defense, both pre-emptive and defensive, has become an important product for merchant bankers. It is difficult to prevent a takeover by a determined, well financed bidder who is

prepared to make a cash tender offer for its shares. However, measures can be taken to reduce the likelihood of unfair takeover bids, to slowdown the takeover process (giving the target company more time to negotiate or seek out alternatives).

Initially Merchant Bankers were classified into 4 categories with regard to their nature and range of activities and their responsibilities to SEBI, investors and issuers of securities. Since September 1997 only a single category exists. The requirements are as under: Net Worth: minimum net worth of Rs. 5 crore. Registration Fee: registration fees of Rs. 5 lakhs is to be paid at the time of grant of certificate by the board and thereafter a renewal fee of Rs.2.5 lakhs every three years from the fourth year from the date of initial registration. Public Issue/ Rights Issue SEBI Filling Fees:  For a period of one year from the commencement of the Securities and Exchange Board of India (Merchant Bankers) (Second Amendment, dated May 03, 2006) Regulations, 2006 A. Public Issues Size of the Issue Less than or equal to Rs. 2 crores Greater than Rs. 2 crores B. Rights Issues Size of the Issue Less than or equal to Rs. 4 crores Fees Rs. 10,000 Fees Rs. 10,000 0.05 % of the issue size


Greater than Rs. 4 crores but less than Rs.1000 crores Greater than Rs. 1000 crores

0.025 % of the issue size Rs. 25,00,000

 After the expiry of one year from the commencement of the Securities and Exchange Board of India (Merchant Bankers) (Second Amendment dated May 03, 2006) Regulations, 2006 A. Public Issues Size of the Issue Less than or equal to Rs. 1 crore Greater than Rs. 1 crore B. Rights Issues Size of the Issue Less than or equal to Rs. 2 crores Greater than Rs. 2 crores but less than Rs. 500 crores Greater than Rs. 500 crores Rs. 25,00,000 Fees Rs. 10,000 0.05 % of the issue size Fees Rs. 10,000 0.10 % of the issue size

Primarily, issues can be classified as a Public, Rights or Preferential issue (also known as Private Placements). While the public and rights issues involve a detailed procedure, private placements are relatively simpler. The classification of issues is illustrated below:








Initial Public Offering - the issuer makes an offer to new investors to enter into its shareholding family. Rights Issue - a listed company proposes to issue fresh securities to its existing shareholders. Further Public Offering - an already listed company makes either a fresh issue of securities to the public or an offer of sale to the public through an offer document. Preferential Issue - an issue of shares or convertible securities by listed companies to a select group of persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue.


The first public offer of securities by a company after its inception is known as Initial Public Offering (IPO). Going public (or participating in an “Initial Public Offering” or IPO) is a process by which a business owned by one or several individuals is converted in to a business owned by many. It involves the offering of part ownership of the company to the public through the sale of equity securities (stock). IPO dilutes the ownership stake and diffuses corporate control as it provides ownership to investors in the form of equity shares. It can be used as exit strategy and finance strategy. As a financing strategy, its main purpose is to raise funds for the company. When used as an exit strategy, existing investors can offload equity holdings to the public. REASONS FOR GOING PUBLIC  To raise funds for financing capital expenditure needs like

expansion, diversification etc.  To finance increased working capital requirement.  As an exit route for existing investors.  For debt financing. BENEFITS OF GOING PUBLIC
 Access to Capital: The principal motivation for going public is to

have access to larger capital. A company that does not tap the public financial market may find it difficult to grow beyond a certain point for want of capital.
 Stockholder Diversification: As a company grows and becomes

more valuable, its founders often have most of its wealth tied up in the
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company. By selling some of their stock in a public offering, the founders can diversify their holdings and thereby reduce somewhat the risk of their personal portfolios.
 Easier to raise new capital: If a privately held company wants to

raise capital, it must either go to its existing shareholders or look around for other investors. This can often be a difficult and time consuming process. By going public, it becomes easier to find new investors for the business.
 Enhances liquidity: The stock of a closely held firm is not liquid. If

one of the holders wants to sell some of his shares, it is hard to find potential buyers, especially if the sum involved is large. Even if a buyer is located there is no established price at which to complete the transaction. These problems are easily overcome in a publicly owned company.
 Establishes value for the firm: This can be very useful in

attracting key employees with stock options because the underlying stock have a market value and a market for them to be traded that allows for liquidity for them.
 Image: The reputation and visibility of the company increases. It

helps to increase company and personal prestige.
 Signals








information to the managers. Every day, investors render judgment about the prospects of the firm. Although the market may not be perfect, it provides a useful reality check.
 Other Advantages:

Additional incentive for employees in the form of the

companies‟ stocks. This also helps to attract potential employees.    Window of opportunity. It commands better valuation of the company. Better situated for making acquisitions.
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DISADVANTAGES / COSTS OF GOING PUBLIC A public company, of course is not an unmixed blessing. There are several disadvantages of going public.  Disclosure: A public company is required to disclose information to investors and others. Hence, it cannot maintain a strict veil of secrecy over its expansion plans and product market strategies as its non-public counterpart can do. Management may not like the idea of reporting operating data, because such data will then be available to competitors.  Dilution: When a company issues shares to public, existing shareholders suffer dilution of their proportionate ownership in the firm.  Loss of Flexibility: The affairs of a public company are subject to fairly comprehensive regulation. Hence, when a non-public company is transformed into a public company there is some loss of flexibility.  Accountability: Understandably, the degree of accountability of a public company is higher. It has to explain a lot to its investors.  Self-dealings: The owner managers of closely held companies have many opportunities for self-transactions. Although legal they may not want to disclose these to the public.  Inactive market - low price: If a firm is very small and its shares are not traded frequently, then its stock will not really be liquid and the market price may not be truly representative of the stocks value.  Control: Owning less than 50% of the shares could lead to a loss of control in the management.  Costs: Apart from the cost of issuing securities, a public company has to incur recurring costs for providing investors with periodical reports, holding shareholder meetings, communicating with institutional investors and financial analysts, and fulfilling various statutory obligations, like filing quarterly reports with the Securities and Exchange Board of India. These reports can be costly
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especially for small firms  Other Disadvantages:  The profit earned by the company should be shared with its

investors in the form of dividend.  An IPO is a costly affair. Around 15-20% of the amount

realized is spent on raising the same.  A substantial amount of time and effort has to be invested.

Let us have a look at the general development of the primary markets over the years. There have been many changes in the regulation of primary market in order to save investors from fraudulent companies. The most path breaking development in the primary market regulation has been the abolition of CCI (Controller of Capital Issues). The aim was to give the freedom to the companies to decide on the pricing of the issue and this was supposed to bring about a self-managing culture in the financial system. But the move was hopelessly misused in the years of 1994-1995 and many companies came up with issues at sky-high prices and the investors lost heavily. That phase took a heavy toll on the investor‟s sentiment and the result was the reduction in the amount of money raised through IPO route.  1990-2000: With controls over pricing gone, companies rushed to tap the primary market and they did so with remarkable ease, thanks to overly optimistic merchant bankers and gullible investors. Around Rs 20,000 crores were raised during this period. Some of the prominent money mobilizers were the so called „sunrise sectors’ - polyester, textiles, finance, aquaculture. The euphoria spilled over to the secondary market. But reality soon set in. Issuers soon failed to meet projections, many disappeared or sank. Result: the small investor deserted both markets-till the next boom.

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As the great Indian software story played itself out, software stocks led a bull charge on the bourses. The primary market caught up, and issues from the software markets flooded the market. With big IPO‟s from companies in the ICE (Information Technology, Communication and Entertainment) sectors, the average issue size shot up from Rs.5 crore in 1994-96 to Rs.30 crore. But gradually, hype took over and valuations reached absurd levels. Both markets tanked.  Beyond 2000: There were hardly any IPO‟s and those who

ventured got a lukewarm response. A depressed secondary market had ensured that the doors for the primary market remained closed for the entire FY 2001-2002.There were hardly any IPO‟s in FY 2001-2002. In 2002 the primary market boom promised to be different. To start with, the cream of corporate India was queuing up, which ensured quality. In this fragile market, issue pricing remains conservative, which potentially meant listing gains. This rekindled the interest of small investors in stocks and drew them back into the capital market. Even as the secondary market moved into top gear in 2003 the primary market too scripted its own revival story, buoyed largely by the Maruti IPO which was oversubscribed six and a half times. In 2003 almost all primary issues did well on domestic bourses after listing, prompting retail investors to flock to IPO‟s. All IPO‟s, including Indraprastha Gas and TV Today Network which was oversubscribed 51 times showed the growing appetite for primary issues. After the phenomenal approval. SEBI has taken enough care to force companies to make relevant disclosures for the investor to judge the quality of new issues. Besides, the companies themselves have been careful not to over-price the shares. On the contrary, some of the companies have deliberately under-priced them to let the issue get over-subscribed and to let the investor share some of the capital gains after listing.
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of Maruti






approached the capital market and a lot more are waiting for SEBI

PERFORMANCE ANALYSIS OF RECENT IPO’S: IPO‟s in India dried up all of a sudden. Adding to the woes of promoters is poor Industrial Production numbers which led to a massive sell-off on the exchanges. Out of the approximately 95 companies that raised money from Retail Investors in India by IPO, 60% are quoting below their issue price. Remember, these are the same issues where retailers flocked by looking at FII subscription. However, FIIs have also turned speculators in the primary market and have sold aggressively.  Edelweiss IPO subscribed 109 times: The initial public offer of brokerage firm Edelweiss Capital got subscribed over 109 times on the final day of its public issue. The issue received bids for 92.08 crore shares as against 83.86 lakh shares on offer, according to the latest data available with the bourses. The portion reserved for Qualified Institutional Buyers (QIBs) was subscribed by over 20 times with bids for 10.21 crore shares, majority of which came from FIIs, the data reveals. The domestic financial institutions, such as banks, mutual funds and insurance companies who also belong to the QIB category, submitted bids for 1.51 lakh. The portion for retail investors has received bids for about 1.43 times, while the shares reserved for employees have been oversubscribed 5.5 times. The other non-institutional investors, which includes corporates and non-retail individual has also been oversubscribed with bids for 10.82 times of the total shares reserved for them. The price band for the issue has been fixed between Rs 725-825 per share. The book building process began on November 15. Kotak Mahindra Capital, Citigroup and Lehman Brothers were the book running lead managers to the issue.  Rural Electrification Corporation (REC) IPO subscribed 1.62 times: The initial public offering (IPO) of Rural Electrification Corporation (REC) of 156.12 million shares in the price band of Rs 90105 per share has been subscribed 1.62 times. According to data available with NSE, as of 1200 hrs, the company has received bids for

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253.16 million shares with the maximum bids - 162.22 million shares at the lower end of the price band at Rs 90 per share. The company has received bids for 90.94 million shares at the upper end of the price band at Rs 105 per share. The IPO of V-Guard Industries of eight million shares in the price band of Rs 80-85 per share has been subscribed 98% as of the second day of the issue. The company has received bids for 7.87 million shares with the maximum bids being made at Rs 85 per share.  Reliance Power IPO subscribed 72 times: Investors bid for as many as 72 times the number of shares that Reliance Power offered for subscription under its initial public offering (IPO). They have put in bids for over 1,654.8 crore shares as against the 22.8 crore shares on offer. The issue has already pulled in roughly Rs 60,000 crore by way of application money. The IPO received maximum response on the last day compared to the first three days, with the subscription count racing from 24 times on day three to over 72 times by on last day. In terms of number of applications Reliance Power IPO has set a new record. It received ever nearly 31 lakh applications by the end of day three, the highest ever, according to the sources in the merchant banking industry handling the IPO. Among mega issues the Reliance Power IPO has thus set a new benchmark in fund mobilization.  DLF IPO subscribed two times: The DLF IPO, raised Rs 9,188 crore in 2007, received subscriptions only about three times the 17.5 crore shares on offer and the retail portion of the issue barely managed to get full subscription. Cairn India, which raised Rs 5,260 crore through the IPO in 2006 by offering 32.88 crore shares, again barely managed to get subscribed by 1.3 times under volatile market conditions. Reliance Petroleum IPO received a similar response with the Rs 2,700crore issue getting subscribed 52 times for the 45 crore shares on offer and received a commitment of Rs 1,45,080 crore. The DLF initial public offer (IPO) received subscription of 1.96 times at the close of the third day. It received total bids for 34.34 crore equity
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shares against the offer of 17.5 crore shares. The realty giant hopes to raise up to Rs 9,625 crore from the issue. According to the information available with stock exchanges, the QIB portion was subscribed 3.17 times, mostly due to response from foreign institutional investors (FIIs). FIIs have submitted bids for over 30 crore shares out of the total bids for 33 crore shares received in this segment. The bids from domestic financial institutions were for just 2.4 crore shares, while those from mutual funds were for about 51 lakh shares. The IPO has about 5.2 crore shares reserved for retail individuals. Market experts believe that the retail bids usually pick up on the last day of the book building process. The non-institutional investors segment, which includes corporates and non-retail individual investors, was subscribed 0.04 times.

SEBI has laid down eligibility norms for entities accessing the primary market through public issues. The main entry norms for companies making a public issue (IPO or FPO) are summarized as under:  Entry Norm I (EN I): An unlisted company may make an initial public offering (IPO) of equity shares or any other security which may be converted into or exchanged with equity shares at a later date, only if it meets all the following conditions: a) Net Tangible Assets of at least Rs. 3 crores for 3 full years. b) Distributable profits in at least three years c) Net worth of at least Rs. 1 crore in three years d) If change in name, at least 50% revenue for preceding 1 year should be from the new activity e) The aggregate of the proposed issue and all previous issues made in the same financial year in terms of size (i.e., offer
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contribution through the offer document), does not exceed five times its pre-issue net worth as per the audited balance sheet of the last financial year. A listed company shall be eligible to make a public issue of equity shares or any other security which may be converted into or exchanged with equity shares at a later date, only if it meets all the following conditions: a) If change in name, at least 50% revenue for preceding 1 year should be from the new activity b) The aggregate of the proposed issue and all previous issues made in the same financial year in terms of size (i.e., offer through offer document + firm allotment + promoters‟ contribution through the offer document), does not exceed five times its pre-issue net worth as per the audited balance sheet of the last financial year. To provide sufficient flexibility and also to ensure that genuine companies do not suffer on account of rigidity of the parameters, SEBI has provided two other alternative routes to company not satisfying any of the above conditions, for accessing the primary Market, as under:  Entry Norm II (EN II): a) Issue shall be through book building route, with at least 50% to be mandatory allotted to the Qualified Institutional Buyers (QIBs). b) The minimum post-issue face value capital shall be Rs.10 crore or there shall be a compulsory market-making for at least 2 years. QIBs mean public financial institutions as defined under section 4A of the Companies Act, scheduled commercial banks, mutual funds, foreign institutional investors registered with SEBI, multilateral and bilateral development financial institutions, venture capital funds and foreign
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venture capital funds registered with SEBI, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds and pension funds with a minimum amount of Rs 25 crore and State Industrial Development Corporations. OR  Entry Norm III (EN III): a) The “project” is appraised and participated to the extent of 15% by Financial Institutions/ Scheduled Commercial Banks of which at least 10% comes from the appraisers. b) The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a compulsory market-making for at least 2 years. In addition to satisfying the aforesaid eligibility norms, the company shall also satisfy the criteria of having at least 1000 prospective allotees in its issue.  Exemption from Eligibility Norms The provisions shall not be applicable in case of: a) A banking company including a Local Area Bank (set up under sub-section (c) of Section 5 of the Banking Regulation Act, 1949 and which has received license from the Reserve Bank of India. b) A corresponding new bank set up under the Banking

Companies (Acquisition and Transfer of Undertaking) Act, 1970 Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980, State Bank of India Act 1955 and State Bank of India (Subsidiary Banks) Act. c) An infrastructure company whose project has been appraised by a Public Financial Finance Institution (PFI) (IDFC) or or Infrastructure Infrastructure Development Corporation

Leasing and Financing Services Ltd. (IL&FS) or a bank which was earlier a PFI not less than 5% of the project cost is financed by a
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PFI / IDFC / IL&FS or severally, irrespective of whether they appraise the project or not, by way of loan or subscription to equity or a combination of both. d) Rights issue by a listed company.

SEBI has come up with Investor Protection and Disclosure Norms for companies raising funds through IPO. These rules are amended from time to time to meet with the requirement of changing market conditions. DISCLOSURE NORMS  Risk Factor: The Company/Merchant Banker must specify the major risk factor in the front page of the offer document.  Issuers Responsibility: It is the absolute responsibility of the issuer company about the true and correct information in the prospectus. Merchant Banker is also responsible for giving true and correct information regarding all the documents such as material contracts, capital structure, appointment of intermediaries and other matters.  Listing Arrangement: It must clearly state that once the issue is subscribed where the shares will be listed for trading.  Disclosure Clause: It is compulsory to mention this clause to

distinctly inform the investors that though the prospectus is submitted and approved by SEBI it is not responsible for the financial soundness of the IPO.  Merchant Bankers Responsibility-Disclaimer Clause: The Lead Manager has to certify that disclosures made in the prospectus are generally adequate and are in conformity with the SEBI Guidelines.  Capital Structure: The Company must give complete information about the Authorized capital, Subscribed Capital with top ten shareholders holding pattern, Promoters interest and their subscription
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pattern etc. Also about the reservation in the present issue for Promoters, Foreign Institutional Investor‟s (FII‟s), Collaborators, NRI‟s etc. Then the net public offer must be stated very clearly.  Auditors Report: The Auditors have to clearly mention about the past performances, Cost of Project, Means of Finance, Receipt of Funds and its usage prior to the IPO. Auditor must also give the tax-benefit note for the company and investors. INVESTOR PROTECTION NORMS  Pricing of Issue: The pricing of all the allocations for the present issue must follow the bid system. The reservation must be disclosed for different categories of investors and their pricing must be specified clearly.  Minimum Subscription: If the company does not receive

minimum subscription of 90% of subscription in each category of offer and if the issue is not underwritten or the underwriters are unable to meet their obligation, then fund so collected must be refunded back to all applicants.  Basis of Allotment: In case of full subscription of the issue, the allotment must be made with the full consultation of the concerned stock exchange and the company must be impartial in allotting the shares.  Allotment/Refund: Once the allotment is finalized, the refund of the excess money must be made within the specified time limits otherwise the company must pay interest on delayed refund orders.  Dematerialization of Shares: form only.  Listing of Shares: It is mandatory on the part of the promoters that once the IPO is fully subscribed, and then the underlying shares must be listed on the stock exchange. This provides market and exit routes to the investors.
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As per the provisions of the

Depositories Act, 1996, and SEBI Rules, now all IPO will be in Demat

OTHER SEBI GUIDELINES  Promoters Contribution and Lock - in: 1. The promoters‟ contribution in case of public issues by

unlisted companies should not be less than 20 percent of the postissue capital. 2. In case of public issues by listed companies, promoters should

contribute to the extent of 20 percent of the proposed issue or should ensure post issue holding to an extent of 20 percent of the post issue capital. 3.
In case of composite issues of a listed company, the promoters‟

contribution shall at the option of the promoter(s) be either 20% of the proposed public issue or 20% of the post-issue capital. Rights issue component of the composite issue shall be excluded while calculating the post-issue capital.


For any issue of capital to the public the minimum promoter‟s

contribution is locked in for a period of 3 years. If the promoters contribution exceeds the required minimum contribution, such excess is locked in for a period of 1 year.  Securities Contribution: 1. Where the promoters of any company making an issue of Ineligible for Computation of Promoter’s

securities have acquired equity during the preceding three years, before filing the offer documents with SEBI, such equity shall not be considered for computation of promoters contribution if it is; a) acquired for consideration other than cash and

revaluation of assets or capitalization of intangible assets is involved in such transactions; or b) resulting from a bonus issue, out of revaluation

reserves or reserves without accrual of cash resources.
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In case of public issue by unlisted companies, securities

which have been issued to the promoters during the preceding one year, at a price lower than the price at which equity is being offered to public shall not be eligible for computation of promoters‟ contribution. 3. No securities forming part of promoters‟ contribution shall

consist of any private placement made by solicitation of subscription from unrelated persons either directly or through any intermediary. 4. The securities for which a specific written consent has not

been obtained from the respective shareholders for inclusion of their subscription in the minimum promoters‟ contribution subject to lock-in shall not be eligible for promoters‟ contribution.  Collection Centers for Receiving Applications: The minimum number of collection centers for an issue of capital shall be: 1. The four metropolitan centers situated at Mumbai, Delhi,

Calcutta and Chennai 2. All such centers where the stock exchanges are located in the

region in which the registered office of the company is situated. The issuer company shall be free to appoint as many collection centres as it may deem fit in addition to the above minimum requirement.  Underwriting: The issuers have the option to have a public issue underwritten by the underwriter. 1. In respect of every underwritten issue, the lead merchant

bankers shall accept a minimum underwriting obligation of 5% of the total underwriting commitment or Rs.25 lakhs whichever is less. 2. The outstanding underwriting commitments of a merchant

banker shall not exceed 20 times its net worth at any point of time.  Timeframes for Issue and Post-Issue Formalities:

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The minimum period for which the public issue is to be kept

open is 3 working days and the maximum for which it can be kept open is 10 working days. 2. A public issue is affected if the issue is able to procure 90% of

the total issue size within 60 days from the date of the earliest closure of the public issue. 3. In case of oversubscription the company may have the right

to retain the excess application money and allot shares more than the proposed issue, which is referred to as “green-shoe option”. 4. Allotment has to be made within 30 days of the closure of the

Public issue and 42 days in case of Rights issue. 5. All the listing formalities of a Public Issue have to be

completed within 7 days from the date of finalization of the basis for allotment.  Dispatch of Refund Order: 1. Refund orders have to be dispatched within 30 days of the

closure of the issue. 2. Refunds of excess application money i.e. non-allotted shares

have to be made within 30 days of the closure of the issue.  Other Regulations: 1. Underwriting is not mandatory but 90% subscription is for each issue of capital to public unless it is


disinvestment where it is not applicable. 2. If the issue is undersubscribed then the collected amount

should be returned back. 3. If the issue size is more than Rs 500 crores, voluntary monitoring mechanism put in place to ensure

disclosures should be made regarding the deployment of funds and an adequate compliance.

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There should not be any outstanding warrants for financial

instruments of any other nature, at the time of the IPO. 5. In the event of the initial public offer being at a premium and

if the rights under warrants or other instruments have been exercised within 12 months prior to such offer, the resultant shares will be not taken into account for reckoning the minimum promoters contribution further, the same will also be subject to lock-in. 6. to. 7. Draft prospectus submitted to SEBI should also be submitted Code of advertisement as specified by SEBI should be adhered

simultaneously to all stock exchanges where it is proposed to be listed. 8. No company shall make any further issue of capital in any

manner whether by way of issue of bonus shares, preferential allotment, rights issue or public issue or otherwise, during the period commencing from the submission of offer document to the Board on behalf of the company for public or rights issues, till the securities referred to in the said offer document have been listed or application moneys refunded on account of non-listing or under subscription, etc. unless full disclosures regarding the total capital to be raised from such further issues are made in the draft offer document.

The issue of securities to members of the public through a prospectus involves a fairly elaborate process, the principal steps of which are as follows.  The board of directors approves the proposal to raise capital from the public and authorizes the managing director (or a board committee) to do all the tasks relating to the public issue.

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The company convenes a meeting to seek the approval of shareholders and the shareholders pass a special resolution under section 81(1A) of the Companies Act authorizing the company to make the public issue.

The company appoints a merchant banker as the lead manager (LM) to the issue.

The LM carries out due diligence to check all relevant information, documents, and certificates for the issue.

The company, advised by the LM, appoints various intermediaries such as the registrar to the issue, the bankers to the issue, the printers, and advertiser.

The LM draws up the issue budget, keeping in mind the guidelines issued by the Ministry of Finance on issue expenses, and the company approves the same (The main components of the issue expenses are fees for LM, underwriters, registrar and bankers, brokerage, postage, stationery, issue marketing expenses, etc.)

The LM prepares the Draft Red Herring Prospectus (DRHP) in consultation with management and seeks the approval of the Board.

The LM files the DRHP approved by the board, with SEBI for its observation along with a soft copy. SEBI places the same on its website for comments from the public.

The company makes listing application to all the stock exchanges where the shares are proposed to be listed along with copies of the draft red herring prospectus. The DRHP is also hosted on the websites of the LM and the underwriters.

The company enters into a tripartite agreement with the registrar and all the depositories for providing the facility of offering the shares in a dematerialized mode.

If the issue is proposed to be underwritten (it is optional in a retail issue and mandatory in a book built issue to the extent of the net public offer), the LM makes underwriting arrangements.

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Within 21 days, SEBI makes its observations on the DRHP. The stock exchanges also suggest changes, if any. The company carries out the modifications to the satisfaction of these authorities.

The company files the prospectus with the Registrar of Companies (ROC).

The LM and the company market the issue using a combination of press meetings, brokers' meetings, investors' meeting and so on.

The company releases a mandatory advertisement, called the 'announcement advertisement' 10 days prior to the opening of the issue. This has to conform to Form 2A, also called the abridged prospectus.

The LM and the printer dispatch the application forms to all stock exchanges, SEBI; collection centers brokers, underwriters, and investor associations. Every application form is accompanied by the abridged prospectus.

The issue is kept open for a minimum of 3 days and a maximum of 10 days.

After the issue is closed, the basis of allotment is finalized by the stock exchange, LM, and the registrar, in conformity with certain SEBIprescribed rules.

The LM ensures that the demat credit or dispatch of share certificates and refund orders to the allotees is completed within two working days after the basis of allotment is finalized and the shares are listed within 7 days of the finalization of the basis of allotment.

The process of IPO is highly complex and its success is extremely important for the company. In this process it is important that all the intermediaries should work cohesively and within a framework of law. Any serious error by any intermediary can affect the IPO.
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The following are the important intermediaries involved in the process:  MERCHANT BANKERS Eligibility criteria: SEBI issues an authorization letter to the finance companies, which are eligible to work as merchant bankers. The eligibility criteria depend on network and infrastructure of the company. The company should not be engaged in activities that are banned for merchant bankers by SEBI. SEBI issues authorization letter valid for 3 years and the company has to pay necessary fees. Such merchant banker can be appointed as lead manager for IPO. Functions: Merchant banker can work as lead manager, co-lead manager, investment banker, underwriter etc. Responsibility: Lead managers are fully responsible for the content and correctness of the prospectus. They must ensure the commencement to the completion of the IPO. Certain guidelines are laid down in section 30 of the SEBI act 1992 on the maximum limits of the intermediaries associated with the issue.

Size of the Issue
50 cr. 50-100 cr. 100-200 cr. 200-400 cr. Above 400 cr.

No of Lead Managers
2 3 4 5 5 or more as agreed by SEBI

The number of co-managers should not exceed the number of lead managers. There can be only 1 adviser to the issue. There is no limit on the number of underwriters.  BROKERS

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All the recognized stock exchange members are called brokers and thus any member of a recognized stock exchange can become a broker to the issue. The brokers can work as broker and underwriter or both. In India usually a broker not only does his normal broking business buying and selling securities for brokerage but also works as an underwriter. They can give underwriting commitment in accordance with their net worth. A broker offer marketing support, underwriting support, disseminates information to investors about the issue and distributes issues stationary at retail investor level. The brokers are governed by rules of SEBI and the respective stock exchange. The brokers are important for the success of the issue. The brokers appoint sub brokers who are in direct contact with the investors.  UNDERWRITERS The underwriter is the principle player in the IPO providing the firm withReputation: As the underwriter is legally liable and because he has on going dealing with the customers to whom he sells shares. The underwriter puts his reputation on the line. Finding investors: The underwriter first puts together a syndicate of other underwriters to distribute the shares. The syndicate finds investors willing to put their money into the company. This has serious implications. Experience: The underwriter knows the detail of the process better than any other participant since issuing shares is one of their primary business functions. Underwriters are the ones who provide proper guidance. After market support: The underwriter protects investors and thus makes the offering more attractive. It is important for the firm to have a clear understanding with the underwriter exactly how much support

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he plans to provide if the IPO is not fully subscribed and accordingly his underwriting commission is fixed. Future services: A good relationship with an underwriter can save time and money in future dealings. Pre offering assistance: The underwriter will conduct road shows with the company‟s management distribute the prospectus and marketing of the underwriters directly generates talk to potential investors about appropriate pricing. Some part of the value that the potential shareholders attach to shares. Underwriting involves a commitment from the underwriter to subscribe to the shares of a particular company to the extent it is under subscribed by the public or existing shareholders of the corporate. The fees for underwriter and broker are decided by the company within the maximum possible limit as fixed by the SEBI.  BANKERS TO THE ISSUE Any scheduled bank registered with SEBI can be appointed as the banker to the issue. Several commercial banks are working as bankers to the issue. They get fees on amount collected by them. There are no restrictions on the number of bankers to the issue. The main function of banker involves collection of duly filed application forms with money (cheque/drafts) maintains a daily report, transferring the proceeds to the share application money collected with the application forms to the registrar. The bank provides application forms to the investors. They accept duly filled forms with cheque/drafts. They prepare collection reports and transfer funds and applications to the company/registrar.  REGISTRAR AND SHARE TRANSFER AGENTS Registration with SEBI is mandatory to take on responsibilities as a registrar or share transfer agent. The registrar provides administrative support to the issue process. Each agent is registered with SEBI. Hey have to maintain net worth and infrastructure criteria. They have to renew their License periodically. He collects all application from the
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bank and ensures reconciliation of funds and of application amount and participates in process of basis of allotment. If the IPO is oversubscribed they provide computerized program for allotment. They manage refund orders and allotment letters. They provide the final list of allotees to Lead Manager ROC and stock exchange. If the company wants they also manage post issue IPO functions relating to shareholders register for the company.  DEPOSITORIES Since the year 2000, it has been made compulsory that all fresh issue of shares must be made only in the dematerialized format (DEMAT). The Depository institute issues unique number of every IPO or company, when shares are allotted to the company/registrar provides shareholders register to depository in electronic form. Thus automatically all shareholders get allotment in their DEMAT account.  LEGAL ADVISOR Normally the company for the purpose of IPO does this appointment. He is responsible legal compliance of IPO process. There are other intermediaries like Advertising Agents etc. but the company governs their role.

The cost of public issue is normally between 8 and 12 percent depending on the size of the issue and on the level of marketing efforts. The important expenses incurred for a public issue are as follows:  Underwriting expenses: The underwriting commission is fixed at 2.5 % of the nominal value (including premium, if any) of the equity capital being issued to public.  Brokerage: Brokerage applicable to all types of public issues of industrial securities are fixed at 1.5% whether the issue is underwritten or not. The managing brokers (if any) can be paid a
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maximum remuneration of 0.5% of the nominal value of the capital being issued to public.  Fees to the Managers to the Issues: The aggregate amount payable as fees to the managers to the issue was previously subject to certain limits. Presently, however, there is no restriction on the fee payable to the managers of the issue.  Fees for Registrars to the Issue: The compensation to he registrars, typically based on a piece rate system, depends on the number of applications received, number of allotters, and the number of unsuccessful applicants.  Printing Expenses: These relate to the printing of the prospectus, application forms, brochures, share certificate, allotment/refund letters, envelopes, etc.  Postage Expenses: These pertain to the mailing of application forms, brochures, and prospectus to investors by ordinary post and the mailing of the allotment/refund letters and share certificates by register posts.  Advertising and Publicity Expenses: These are incurred

primarily towards statutory announcements, other advertisements, press conferences, and investor‟s conferences.  Listing Fees: This is the concerned fee payable to concerned stock exchange where the securities are listed. It consists of two components: initial listing fees and annual listing fees.  Stamp Duty: This is the duty payable on share certificates issued by the company. As this is the state subject, it tends to vary from state to state.

 Controller of Capital Issue: During the Controller of Capital Issue (CCI) regime the issues were priced by the company and approved by
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CCI. Generally the CCI was very conservative and hardly allowed premium issues.  Arrival of SEBI: After the Arrival of SEBI free market policy is followed for pricing of issue. Merchant Bankers are responsible for justifying the premium. The company was allowed to give future profit projections. A company can issue shares to applicants in the firm allotment category at higher price than the price at which securities are offered to public. Further, an eligible company is free to make public/rights issue in any denomination determined by it in accordance with the Companies Act, 1956 and SEBI norms. An unlisted company eligible to make a public issue and desirous of getting its securities listed on a recognized stock exchange pursuant to a public issue, or listed company making a public issue may freely price its equity shares or any securities convertible at a later date into equity shares. BASIS FOR ISSUE PRICE 1. The following information shall be disclosed: a) Earnings per share (EPS) i.e. pre-issue for the last three

years(as adjusted for changes in capital); b) P/E Ratio pre-issue and comparison thereof with the industry

P/E where available. c) d) Average return on net worth (RONW) in the last three years. Minimum return on increased net worth required for

maintaining pre-issue EPS. e) f) Net Asset value per share on last Balance Sheet. Net Asset Value per share after the issue and comparison

thereof with the issue price. g) Comparison of all the accounting ratios of the issuer company

as mentioned above with the industry average and with the accounting ratios of the peer group.
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Projected earnings shall not be used as a justification for the issue price in the offer document. 2. The issuer company and the lead merchant banker shall provide the accounting ratios as mentioned above to justify the issue price. 3. In case of book built issues, the offer document shall state that the final price has been determined on the basis of the demand from the investors. Pricing is the most important and difficult aspect of an IPO. However in the present the success of an IPO. The following are the two types of issues:  FIXED PRICE ISSUE In the fixed price issue, an issuer company is allowed to freely price the issue. The basis of issue price is disclosed in the offer document where the issuer discloses in detail about the qualitative and quantitative factors justifying the issue price. Suppose a company would like to come up with a fixed price public issue, the issuer company just needs to file the prospectus stating the number of shares, the price per share and the total issue size. Then the public bids at the price already determined by the issuer company and gets the allocation according to the quantity of bids and the availability of shares. Both the price of the shares and the number of shares to be issued remains fixed.  BOOK BUILDING ISSUE SEBI guidelines defines Book Building as “a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document”.
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scenario most of the issues are priced

by the book building method. Accurate pricing is essential for

Book building is basically a process used in IPO for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date. As per SEBI guidelines, an issuer company can issue securities to the public through prospectus in the following manner:  100 % of the net offer to the public through book building

process.  75 % of the net offer through the book building process and

25 % through the price determined by the book building process. PRICE BAND  Issuer company can mention a price band of 20% (cap in the

price band should not be more than 20% of the floor price) in the offer documents filed with SEBI and actual price can be determined at a later date before filing of the offer document with the Registrar of Companies(ROC).  If the Board of Directors of the issuer company has been

authorized to determine the offer price within a specified price band such price shall be determined by a Resolution to be passed by the Board of Directors.  The Lead Merchant Bankers shall ensure that in case of the

listed companies, a 48 hours notice of the meeting of the Board of Directors for passing resolution for determination of price is given to the designated stock exchange.  In case of public issue by listed company, issue price or price

band may not be disclosed in the draft prospectus filed with SEBI.  In case of a rights issue, issue price or price band may not be

disclosed in the draft letter of offer filed with SEBI. The issue

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price may be determined anytime before fixation of the record date, in consultation with the designated stock exchange.  The final offer document shall contain only one price and one

set of financial projections, if applicable.

 The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.  The Issuer specifies the number of securities to be issued and the price band for orders.  The Issuer also appoints syndicate members with whom orders can be placed by the investors.  Investors place their order with a syndicate member who inputs the orders into the 'electronic book'. This process is called 'bidding' and is similar to open auction.  A Book should remain open for a minimum of 5 days.  Bids cannot be entered less than the floor price.  Bids can be revised by the bidder before the issue closes.  On the close of the book building period the 'book runner evaluates the bids on the basis of the evaluation criteria which may include –    Price Aggression Investor quality Earliness of bids, etc.

 The book runner and the company conclude the final price at which it is willing to issue the stock and allocation of securities.  Generally, the number of shares is fixed. The issue size gets frozen based on the price per share discovered through the book building process.

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 Allocation of securities is made to the successful bidders.  Book Building is a good concept and represents a capital market which is in the process of maturing. PERSONS INVOLVED IN THE BOOK-BUILDING PROCESS The principal intermediaries involved in the Book Building process are the company; Book Running Lead Managers (BRLM) and syndicate members who are intermediaries registered with SEBI and are eligible to act as underwriters. Syndicate members are appointed by the BRLM. HOW IS THE BOOK BUILT? A company that is planning an initial public offer appoints a Merchant Banker as a book runner. Initially, the company issues a draft prospectus which does not mention the price, but gives other details about the company with regards to issue size, past history and future plans among other mandatory disclosures. After the draft prospectus is filed with the SEBI, a particular period is fixed as the bid period and the details of the issue are advertised. The book runner builds an order book, that is, collates the bids from various investors, which shows the demand for the shares of the company at various prices. Prospective investors can revise their bids at any time during the bid period that is, the quantity of shares or the bid price or any of the bid options. BASIS OF DECIDING THE FINAL PRICE On closure of the book, the quantum of shares ordered and the respective prices offered are known. The price discovery is a function of demand at various prices, and involves negotiations between those involved in the issue. The book runner and the company conclude the pricing and decide the allocation to each syndicate member. PAYMENT FOR THE SHARES The bidder has to pay the maximum bid price at the time of bidding based on the highest bidding option of the bidder. The bidder has the option to make different bids like quoting a lower price for higher number of shares or a higher price for lower number of shares. The syndicate member may
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waive the payment of bid price at the time of bidding. In such cases, the issue price may be paid later to the syndicate member within four days of confirmation of allocation. Where a bidder has been allocated lesser number of shares than he or she had bid for, the excess amount paid on bidding, if any will be refunded to such bidder. ADVANTAGE OF THE BOOK BUILDING PROCESS VERSUS THE NORMAL IPO PROCESS Unlike in Book Building, IPO‟s are usually marketed at a fixed price. Here the demand cannot be anticipated by the merchant banker and only after the issue is over the response is known. In book building, the demand for the share is known before the issue closes. The issue may be deferred if the demand is less. This process allows for price and demand discovery. Also, the cost of the public issue is reduced and so is the time taken to complete the entire process. Book Building Process v/s Fixed Price Process Features Pricing Fixed Price Process Book Building Process at which the

Price at which the Security Price is offered/ allotted

is Security will be offered/ advance to the investor. Only an indicative price range is known.

known in advance to the allotted is not known in investor.


Demand securities known only

for offered after

the Demand



is securities offered can be the known everyday as the book is built.

closure of the issue.

ALLOTMENT PROCEDURE IN CASE OF 100% BOOK BUILDING In case an issuer company makes an issue of 100% of the net offer to public through 100% book building process:
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a) Not less than 35% of the net offer to the public shall be available for allocation to retail individual investors; b) Not less than 15% of the net offer to the public shall be available for allocation to non-institutional investors i.e. investors other than retail individual investors and Qualified Institutional Buyers; c) Not more than 50% of the net offer to the public shall be available for allocation to Qualified Institutional Buyers. ALLOTMENT PROCEDURE IN CASE OF 75% BOOK BUILDING In case an issuer company makes an issue of 75% of the net offer to public through book building process and 25% at the price determined through book building – a) In the book built portion, not less than 25% of the net offer to the public, shall be available for allocation to non-Qualified Institutional Buyers and not more than 50% of the net offer to the public shall be available for allocation to Qualified Institutional Buyers. b) The balance 25% of the net offer to the public, offered at a price determined through book building, shall be available only to retail individual investors who have either not participated or have not received any allocation, in the book built portion.

The role of marketing, and particularly promotion, in the pricing and trading of Securities is fairly limited. PRELIMINARY REQUIREMENTS The company has to complete all legal requirements, appoint all intermediaries and once they get SEBI card (approval), the process of marketing of IPO can commence. TIMING OF IPO

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This the most important factor for the success of IPO. If secondary market is depressed, if there is political unrest, if serious international problems are prevailing then it is considered to be negative factors for timing of IPO‟s. If these factors are favorable then the Company must find out about the timing of other prestigious IPO‟s. Normally in good times many companies are crowding at the same time.  A Question of Timing: Timing the issue is critical as it determines the success or failure of an issue to a great extent. During 1995-96, Primary Market boom, there was a period during which there were two to three issues in a day. This is a dangerous situation. The ideal time for marketing an issue is a boom in the Secondary Market, peaceful socio-political-economic environment and at least two days gap between two issues.  The Effects of Marketing on IPO’s: A merchant banker‟s marketing campaign for an IPO is critical. This campaign, as much as anything that precedes or follows it, will determine the success or failure of the IPO. The key is to stimulate investor demand for the stock so that, the demand will exceed the supply. Through the marketing effort, the underwriter attempts to create an imbalance in the supply/demand equation for the issue, so that there are more buyers than sellers when the stock is finally released for sale to the public. To understand the sense of these statements one must understand the relationship between the marketing of an IPO and its initial returns, and how different parties benefit from this relationship. A security‟s value is an increasing function of the number of investors who know about the security. Investor knowledge leads to greater value consequently; the efforts taken by a merchant banker to promote awareness in a firm can affect the valuation of its stock by expanding the investor base. The reputation of a merchant banker could expand a firm‟s investor base at a lower cost than the firm can, since the promotional efforts of
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a merchant banker on behalf of the firm would be more creditable. The efforts of a merchant banker to promote an IPO through increased media coverage will increase retail interest in that stock. GENERAL PROCEDURE FOR MARKETING OF IPO  Press Conference Promoters and Lead Managers call for press conference in each major investment center. Reporters are briefed about the issue. They carry it as news-item in their papers.  Investors Conference The prospective investors are called by invitation. The Promoters and Lead Managers give presentations. They reply to the questions of the investors to boost their confidence.  Road Shows This is like the investors conference but normally is done abroad for marketing ADR/GDR issues. It is an expensive process and requires a lot of legal compliances. The company has to observe the rules of the concerned country. However, road shows are becoming more and more popular in India.  Newspaper Advertisements The company releases statutory advertisements in leading

newspapers. The company has to publish abridges prospectus in leading newspapers. It is the responsibility of the promoters to ensure that the issuing company and their group companies should not release any commercial advertisement, which may influence the investor‟s decision for investment.  Printing - Prospectus The company has to print approved prospectus and provide enough copies to all intermediaries. If any investor asks for a copy of prospectus it must be provided to him without any fees. Sufficient

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quantities should be maintained at the registered office of the company and with the Lead Managers.  Printing Application Forms Sufficient number of application forms must be printed much before the opening of the issue. Each form must contain abridged prospectus in SEBI approved format. Sometimes different coloured forms are issued to FI, FII, NRI and general public. It is compulsory to provide stationery to all underwriters and brokers. They clients. will arrange distribution to their sub-brokers and other Sometimes,

company makes direct dispatch of forms to prospective investors GUIDELINES FOR ADVERTISEMENT OF IPO’s  An issue advertisement shall be truthful, fair and clear and shall not contain any statement which is untrue or misleading.  Any advertisement reproducing or purporting to reproduce any information contained in an offer document shall reproduce such information in full and disclose all relevant facts and not be restricted to select extracts relating to that item.  An advertisement shall be set forth in a clear, concise and understandable language. Extensive use of technical, legal terminology or complex language and the inclusion of excessive details which may distract the investor shall be avoided.  An issue advertisement shall not contain statements which promise or guarantee rapid increase in profits.  An issue advertisement shall not contain any information that is not contained in the offer document.  No models, celebrities, fictional characters, landmarks or caricatures or the likes shall be displayed on or form part of the offer documents or issue advertisements.

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 No advertisement shall include any issue slogans or brand names for the issue except the normal commercial name of the company or commercial brand names of its products already in use.  If any advertisement carries any financial data, it shall also contain data for the past three years and shall include particulars relating to sales, gross profit, net profit, share capital, reserves, earnings per share, dividends and the book values.  No issue advertisement shall be released without giving “Risk Factors” in respect of the concerned issue.  No corporate advertisement of Issuer Company shall be issued after 21 days of the filing of the offer document with the Board till the closure of the issue unless the risk factors as are required to be mentioned in the offer document, are mentioned in such advertisement.  No advertisement shall be issued stating that the issue has been fully subscribed or oversubscribed during the period the issue is open for subscription, except to the effect that the issue is open or closed.

The following are the pre-issue obligations of the Merchant Bankers to an issue:  Exercising of due diligence by Lead manager.  Payment of requisite fees  Documents to be submitted with the offer document by the lead manager   Memorandum of Understanding(MOU) Inter-se allocation of responsibilities(in case there is more

than one lead manager)  Due Diligence certificate
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Certificate signed by the Chartered Accountant(CA)

 Submit a list of promoters group and other details  Appointment of Intermediaries  Signing of Underwriting Agreement  Drafting of draft prospectus in consultation with the merchant bankers and submitting the same to SEBI along with the requisite fees and other requirements and submitting the same to the Stock exchange as per guidelines.  File red herring prospectus with SEBI/stock exchanges/ROC after receiving clearance from SEBI and stock exchanges.  Dispatch of issue material to the stock exchanges, brokers, underwriters, bankers to the issue, investor associations etc.  No Complaints Certificate  Ensuring mandatory and other collection centers for the issue.  Appoint Authorized Collecting Agents  Appointment of Compliance officer by the issuer company  Distribution of Application forms and Abridged prospectus  Agreement with depositories for receiving issues in DEMAT form  Overseeing the bidding process  Maintaining the escrow account  Provisions for electronic registration of bids

 Post issue monitoring Reports to be submitted by Lead managers. These reports shall be submitted within 3 working days from the due dates.  Processing of Applications

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 Deciding the basis for allotment  Distribution of allotted shares to successful bidders  Refund of money to unsuccessful bidders  Establishment of Underwriters liability, if any  Post issue advertisements  File final prospectus with SEBI/ stock exchanges/ ROC after incorporating the basis of allotment, price discovery etc.  Listing of the issue on the designated stock exchanges  Redress Investor Grievances

 REVISION OF PRICE BAND OR BIDDING/ISSUE PERIOD: In case the price band of the issue is revised, the revised price band and the bidding/issue period will be widely disseminated by informing the stock exchanges by publishing the details in 2 national newspapers (one each in English and Hindi) and in a regional newspaper; and also by indicating the change on the website of the Book Running lead Managers (BRLM‟s) and at the terminals of the members of the Syndicate. In case the price band is revised, the bidding period shall be extended for a further period of three days, subject to the total bidding period not exceeding ten working days. As per SEBI guidelines, the cap on the price band should not be more than 120% of the floor of the price band. Therefore, in case of a revision in the price band, the floor of the price band can move up or down to the extent of 20% of the floor price band disclosed in the Red Herring Prospectus.  PROSPECTUS IS APPROVED BY SEBI BUT THE COMPANY DOES NOT COME OUT WITH THE PROPOSED ISSUE:

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An issue shall open within 3 months from the date of issuance of the observation letter by the Board, if any or within 3 months from the 22nd day from the date of filing of the draft offer document with the Board, if no observation letter is issued. If the company fails to come out with the issue within 3 months, then it is barred from making an issue in the market for the next 6 months. Once the 6 months period lapses the company has to file a new prospectus with SEBI if it wants to come out with an issue.

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According to Section 81 of the Companies Act, 1956, if a public company wants to increase its subscribed capital by allotment of further shares after two years from the date of its incorporation or from the date of first allotment, whichever is earlier, such further shares should be first offered to the existing equity shareholders, in proportion to the capital paid–up on the shares held by them at the date of such offer. The shareholders to whom the offer is made are not under any legal obligation to accept the offer. On the other hand, they have a right to renounce the offer in favour of any person. Shares so offered by a public company to its existing equity shareholders, are called right shares because they are offered to the shareholder as a matter of legal right. Rights shares are usually offered on terms advantageous to the shareholders. For example, shares of the face value of Rs. 10 maybe offered at par value, while the market price of the shares at the time of announcing the offer maybe more than Rs. 10 per share.

According to Section 81 of the Companies Act, the following conditions have to be satisfied by a public company issuing rights shares: 1. Such shares must be offered to holders of equity shares in proportion, as nearly as circumstances admit, to the capital paid up on the share. 2. The offer must be made giving a notice specifying the number of shares offered. 3. The offeree must be made to accept the shares within a period specified in the notice which shall not be less than 15 days. A
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renouncement form in favour of someone else is also given in the application form. 4. Unless the articles of association of the company provide otherwise, the notice must also state that the shareholders have a right to renounce all or any of the shares offered to them in favour of one or more of the nominees. 5. After the expiry of the time specified in the notice or on receipt of intimation earlier from the shareholder declining to accept the shares offered, the Board of Directors may dispose of the unsubscribed shares in such manner as they think most beneficial to the company.

1. The SEBI guidelines for Disclosure and Investor Protection apply only to rights issue made by listed companies. These guidelines do not apply to rights issue of any amount by existing private companies and unlisted public companies. 2. Private companies or unlisted companies therefore, only need to comply with the requirements laid down in the Companies Act, 1956. 3. Where any company has withdrawn the rights issue after

announcing the record date, such company is not permitted to make application for listing of any of its securities for a minimum period of 12 months from the announced record date. 4. Underwriting of rights issues is not mandatory. However, stand-by underwriting support can be extended to a rights issue. 5. These guidelines are not applicable to composite issues i.e. an issue of securities on rights basis made either simultaneously or preceded by or followed by an issue of securities to public, within a period of three months before or after closure of rights issue as the case maybe.

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6. The gap between the closure date of rights issue and public issue should not exceed 30 days. No bonus issue should be made within 12 months from the date of issue. 7. Appointment of a Merchant Banker: Where issue of share by way of rights by a listed company does not exceed Rs.50 lakhs, appointment of merchant banker is not mandatory. For rights issues by listed companies exceeding Rs. 50 lakhs, the issue should be managed by a SEBI registered merchant banker. 8. Rights issues shall be kept open for at least 30 days and not more than 60 days. 9. If the company does not receive at least 90 percent of the issued amount including accepted devolvement from underwriters, if any, within 42 days from the date of closing of the issue, the amount of subscription received is required to be refunded. 10. If there is any delay in the refund amount collected by more

than 8 days, the company and the directors of the company shall be jointly and severally liable to repay the amount due by way of refund with interest as per section 73 of the companies act, 1956 from the delayed period. 11. No part of over-subscription should be retained under any

circumstances i.e. quantum of rights issue should not exceed as specified in the letter of offer. 12. No company shall make a public or rights issue of equity

share or any security convertible at later date into equity share, unless all the existing partly paid-up shares have been fully paid or forfeited. 13. No preferential allotment should be made along with the

rights issue. If any preferential allotment to the employees or any identified persons has been proposed to be made, this should be done independent of the rights issue by complying with the provision of the Companies Act, 1956.
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An advertisement should be prominently issued in not less

than two All India newspapers at least one week before the date of opening of the subscription. 15. Promoters Contribution and Lock-in requirements: The

requirements in regards to promoter‟s contribution and lock in shall not be applicable in case of a rights issue. Provided that, the promoters shall disclose their existing shareholding and the extent to which they are participating in the proposed issue, in the offer document. 16. Compliance Reports: The lead manager must ensure that

the letter of offer for rights contains all the information specified under the Companies Act. He has to submit the draft letter of offer to SEBI six weeks before the issue is scheduled to open for subscription. If SEBI makes any modifications within three weeks of the submission of letter of offer then such modifications have to be incorporated before filing the letter of offer. The copy of the letter of offer shall be submitted by the lead manager to SEBI two weeks before the issue opens for subscription. 17. Post Issue Monitoring Reports: The lead manager shall

submit a 3 days monitoring report and a 50 days monitoring report within 3 days and 50 days respectively of the date of closure of the issue.

A rights offer provides the shareholders with the option of retaining their proportionate ownership in a company when it sells additional shares. It is probably beneficial only to the large shareholders because of the separation of ownership and control. A rights offering can be more beneficial to the company as it need not have a broad market appeal and can be only concentrated on investors who already have shares in the company. Also the cost of making rights offerings is less when compared to public issues.
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On the other hand, a rights offering generally takes a longer time to complete and the offering eliminates the possible transaction cost savings of selling large blocks of shares to institutions not currently holding the stock.

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 Approval of the Draft Prospectus by SEBI: As per the SEBI

guidelines, it takes 3 weeks to approve a draft prospectus filed by the issuer company, but in reality this procedure takes around 8 – 10 weeks. This increases the time line required to come out with an IPO.  Market Timing: The success of IPO‟s depends to some extent on the health of the capital markets in the country. If a company comes out with an IPO when the sentiment of the investors towards the stock market is negative, it will get a very lukewarm response. Market volatility is a concern for companies coming out with IPO‟s. Issuer companies are sometimes forced to extend the bidding period or cut the price at the lower end of the price band as seen recently in the cases of Air Deccan and Prime Focus IPO. Some other companies which were planning to come out with an IPO are waiting for the sentiments to turn positive on the stock market before taking a final call on public issues. According to Prithvi Haldea of Prime Database, currently there are three categories of IPO‟s in the market. They are as follows,    Firms where issue date for the IPO has been announced. Firms which have filed draft prospectus with SEBI and Firms planning for IPO‟s

It is estimated that there are around 4 - 6 firms where the issue date has been announced, 8 – 10 firms whose prospectus has been cleared by SEBI but the date of IPO has not been announced, around 48 firms whose prospectus has not been cleared and around 350 firms planning to come out with an IPO in the near future.

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 Market Manipulation: In some IPO‟s there are cases of market manipulation i.e. prices of the shares of the company are rigged by false information, false trading etc. within days of its listing and in many such cases the shares are even delisted within years resulting in huge losses to the investors. This erodes the investor‟s confidence in the primary market.  Multiple Allotments of Shares to a Single Investor: As seen in the recent IPO scams, multiple allotments of shares were made to a single person in the retail investor category, resulting in a single person cornering a huge proportion of the allotments reserved for retail investors. This results in opportunity losses to genuine retail investors who have applied for the shares under this category.

Opening of Multiple Demat Accounts (Benami Accounts) by a

Single Investor: In recent investigations by SEBI relating to the IPO scams it was found that the Depository Participants(DP‟s) have not followed the stringent Know Your Client (KYC) Norms prescribed by SEBI for opening of DEMAT accounts. This resulted in opening of multiple demat accounts (benami accounts) by single investors to corner significant portions of IPO‟s reserved for retail investors. Some of the discrepancies observed in following the KYC norms are as followed:       No signature across the photographs of the account holders. Same signature for multiple accounts but different addresses. Same addresses for multiple demat accounts. No proof of identification submitted to the DP‟s. No proof of address provided by the account holders. Photographs of the accountholders stapled and not affixed as

per SEBI guidelines. The Depositories are aware of the possibility of the existence of accounts being operated without following proper KYC norms, but they
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have not put in place a system to detect such accounts and take proper actions.  Inefficiency by Depositories: The depositories are required to have adequate controls, systems and procedures for monitoring and evaluating its compliances with the statutory requirements laid down by SEBI and prevent any conduct by DP‟s which is detrimental to the interest of the investors or the securities market. In this respect, the depositories have failed to perform and supervise the operations of the DP‟s and also failed to inform SEBI of the deficiencies. Some of the deficiencies are as follows:  The penalties imposed on the DP‟s for account opening

deficiencies are as low as Rs. 500 – 1000.  NSDL system allows accounts to be stored in the databases

with no check on the addresses and other details.  NSDL has to inspect the records of the DP‟s on timely

intervals but the periodicity of inspection is not established as per any document.  NSDL does not impose penalties for violations rectified

immediately after inspection, does not impose penalties harsher than monetary penalties for the remaining violations and also waives the penalties imposed if the DP reports rectification of deficiencies. This system creates no disincentive or deterrent for a DP to comply till NSDL inspects and finds the violation, since rectification after inspection assures that no penalty of any kind is imposed on DP.  Deficiencies on the part of Bidders to the Issue: There are some technical reasons for rejection of the bids made by the bidders in the retail and non-institutional categories. Some of the reasons are as follows:  The amount paid does not tally with the amount payable for

the highest value of equity shares bid for.
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 

Age of the first bidder not given. Bids by minors or by person‟s incompetent to contract as per

the Indian Contracts Act.     PAN not stated if the bid is for Rs. 50,000 or more. GIR no. stated instead of PAN. Proof of PAN not attached to bid cum application form. Bids for lower number of equity shares than specified for that

category of investors.    Bids at a price less than lower end of price band. Bids at a price more than the higher end of price band. Bids for number of equity shares which are not in the

multiples as specified in the Red Herring Prospectus.    Multiple Bids by a single person. Signature of sole and/or joint bidders missing. Bid cum application form does not have the stamp of the

BRLM or syndicate members.  Bid cum application form does not have the bidder‟s

depository account details.  Bids for amounts greater than maximum permissible amounts

prescribed by the regulations.   No Bids are not accompanied by applicable margin amounts. requirement of PAN details for application below

Rs.50000: As per the current SEBI guidelines, investors are required to submit PAN details for applications for shares in an IPO above Rs. 50000. This can be a loop-hole in the system as investors in the retail allotment category can make multiple applications as benami's by subscribing for less than Rs. 50000 as they need not submit their PAN card details.

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 Oversubscription of Public Issues: Generally there are three classes of investors in the market; those who invest only in the primary market, then those who invest only in the secondary market and those who invest in both. In the recent years the primary market has witnessed a boom with many companies coming out with their IPO‟s. This provides huge investment opportunities fro investors interested in the primary markets. This has led to so many issues in recent past being oversubscribed by as much a 20 – 60 times. Such tremendous responses also results in huge amounts of paper work and processing of applications. During such times there may be a possibility of certain issues pertaining to the stringent SEBI guidelines being overlooked as has been witnessed in the IPO scams in recent years. The system currently in place may not be suited to efficiently handle such enormous data and some lacunas may exist.  Quotas for IPO Allotments: The IPO subscription in India is a quota based system where SEBI has prescribed the quotas for the investors in the retail investor, non- retail investors and institutional investor‟s category. The reservation for retail investors limits their opportunity of investing in IPO‟s and earning the resulting gains. Such a quota based system may have fuelled the practice of investors putting in multiple applications in public offerings to corner the shares. Thousands of fictitious applications were found to have been put in in a spate of IPO‟s during the equity boom between 2003 and 2005 to cash in the gains when the shares were listed.  Problems faced by the Merchant bankers in the Due Diligence process: The merchant bankers appointed by the issuer company are required to verify various documents, reports, financial information, etc which requires some time. Many a times the issuer company tries to show itself in positive light so that its issue gets a fairly positive response in the market and to enable this they do not provide true and fair data to the merchant bankers or they forge the documents etc. It becomes then the duty of the appointed merchant bankers to uncover
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the true information and only after carrying out the due diligence procedure to the best of available resources proceed with the issue.

Delays in Refunds to Unsuccessful bidders in IPO’s: According

to the SEBI guidelines the refunds to unsuccessful bidders should be done within 15 days and 30 days of deciding the allotment in case of book building issue and fixed price issue respectively. But in reality many a times the refunds get delayed resulting in blockage of funds of the unsuccessful bidders who could have used those funds to invest in some other IPO. This is an opportunity loss for the investors.

 PAN Cards Compulsory for opening DEMAT Accounts: From April 1, 2006 demat accounts can be opened only if PAN card details are furnished by the intending demat account holders to the DP (Depository Participant). Also CDSL (Central Depository Services (India) Limited has issued a notice regarding all the demat accounts opened on or before 31st March 2006 saying that if the said demat account holders want to continue the operation of their demat accounts they should furnish the PAN card details to their respective DP‟s on or before 30th September 2006. PAN card details in this case imply original Pan Card for verification and photocopy for the DP‟s record. This step on the part of the DP‟s will help reduce the instances of opening of multiple demat accounts in the same name or using the same address.  Removal of Quota System in the IPO Allotment Process: The Finance Ministry has given a suggestion to SEBI that the quota system in the IPO allotment process should be done away with as it leads to investors putting in multiple bids to corner portions of the public offerings. The ministry is of the opinion that instead of the quota

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system a non-discretionary price discovery process marked by an auction based method could be adopted.  Restriction on Share Transfer before listing: Market regulator SEBI is considering a proposal that seeks to restrict transfer of equity shares of a company before it is listed, in a move aimed at reducing large scale off market transactions. Large scale irregular transfer of shares before their listing was seen in the recent IPO scams. Hence the proposal by SEBI aims at reducing such scams and preventing the individuals who deal in such transactions from making big gains when the securities are listed on the stock exchanges.  Grading of Merchant Bankers: SEBI has also recently made a proposal to grade the merchant bankers involved in the handling of a public issue. As per this proposal, Merchant bankers will be graded on their track record; the issues brought out in the past, the kind of documents that were submitted and other such parameters. Also SEBI will not certify the grading agency‟s assessment. The grading would be merely aimed at assisting the investors particularly the small investors in taking informed decisions.  Improvement in the Refund process: Currently the refund process is a time consuming procedure in the IPO process, as the unsuccessful bidders have to undergo a long wait to get back the money they have paid for subscribing to an IPO. An ECS (Electronic Clearing System) which is not mandatory as of now should be made mandatory in case of all the refunds. This will ensure efficiency and will help do away with the irregularities in the refund process.  IPO funding: Nowadays individuals who want to subscribe to a public issue but do not have the resources can avail funding from various banks at reasonable rates. Availability of easy funding will boost up the investors responses to the public issues. Some of the terms and conditions for an IPO funding by banks are as follows:

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 

The shares should be subscribed in demat form only The customer exercising such an option should have a demat

account or open a demat account with the bank etc. Let us have a look at all the requirements prescribed by UTI Bank for IPO funding for individuals: ELIGIBILITY: Finance would be provided to those subscribing for shares in the public/rights issues of reputed companies who should be listed with the listing requirements of NSE/ BSE. TERMS AND CONDITIONS:   Minimum Application: 200 shares Loan Amount: 80% of the application amount (subject to a

maximum of Rs. 10 lakhs)  Margin: 50% or as per the directives issues by RBI from time

to time.  Rate of Interest: 4% above the Prime Lending Rate (PLR) with

a minimum of 16%  Processing Charges: Rs. 250

OTHER REQUIREMENTS:   The shares should be in demat form only. The customer exercising the option should either have or

open a DP account as also a non cheque Book/ ATM card Savings/ Current account with the bank.  Processing charges, Interest amount and margin money to be

recovered up front by way of a pay order.  A letter from the applicant irrevocably that he will not change

the mandate in the application, and if he does the application may be rejected by the Registrars/ Company. This letter will be filed with the company along with the share application form.

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The scheme will close one day before the close of the issue

when payment towards fees is made in cash/ draft/banker‟s cheque or three days before the close of the issue when payment is made through a clearing cheque.  The customer shall open a savings account without a cheque

book/ ATM card with the bank and shall irrevocably mandate credit of refund if any to the account. The customer will authorize the bank to recover the loan by debiting this account in the event of non-allotment. No other debits would be allowed in this account. The requirement by other banks for IPO funding is more or less the same as seen above in the UTI bank example. Thus, IPO funding is a boon for investors especially for the investors who prefer to invest in the primary market.

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List of Merchant Bankers Registered with SEBI
Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Name

Place New Delhi Mumbai Calcutta Calcutta New Delhi Mumbai Mumbai Mumbai Hyderabad Mumbai New Delhi Calcutta Mumbai Mumbai New Delhi Mumbai Pune Mumbai Calcutta Mumbai Mumbai Mumbai Mumbai Bangalore Calcutta Mumbai Mumbai Ahemedabad Hyderabad Mumbai Mumbai Mumbai Mumbai Mumbai

State Delhi Maharashtra West Bengal West Bengal Delhi Maharashtra Maharashtra Maharashtra Andhra Pradesh Maharashtra Delhi West Bengal Maharashtra Maharashtra Delhi Maharashtra Maharashtra Maharashtra West Bengal Maharashtra Maharashtra Maharashtra Maharashtra Karnataka West Bengal Maharashtra Maharashtra Gujarat Andhra Pradesh Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra
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35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76


Mumbai Mumbai Mumbai Mumbai Mumbai New Delhi Alwaye Mumbai New Delhi Mumbai Mumbai Ahemedabad Jaipur Mumbai Mumbai Vadodara Mumbai Mumbai New Delhi Mumbai Mumbai Mumbai Chennai Mumbai New Delhi Chennai Pune Mumbai Chennai Bangalore Mumbai Chennai Calcutta Mumbai Mumbai Karur Hyderabad Mumbai Mumbai Mumbai Mumbai Mumbai

Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra Delhi Kerala Maharashtra Delhi Maharashtra Maharashtra Gujarat Rajasthan Maharashtra Maharashtra Gujarat Maharashtra Maharashtra Delhi Maharashtra Maharashtra Maharashtra Tamil Nadu Maharashtra Delhi Tamil Nadu Maharashtra Maharashtra Tamil Nadu Karnataka Maharashtra Tamil Nadu West Bengal Maharashtra Maharashtra Tamil Nadu Andhra Pradesh Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra
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77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121


Mumbai Mumbai Mumbai Calcutta Mumbai Ludhiana Mumbai New Delhi Mumbai Ahemedabad Calcutta Chennai Mumbai New Delhi New Delhi Mumbai New Delhi New Delhi Mumbai Mumbai New Delhi New Delhi New Delhi Mumbai Mumbai Mumbai Mumbai Mumbai Mumbai Calcutta New Delhi Mumbai New Delhi Calcutta Mumbai Mumbai Jaipur Hyderabad Indore Bhavnagar Mumbai Calcutta Manipal Indore Mumbai

Maharashtra Maharashtra Maharashtra West Bengal Maharashtra Punjab Maharashtra Delhi Maharashtra Gujarat West Bengal Tamil Nadu Maharashtra Delhi Delhi Maharashtra Delhi Delhi Maharashtra Maharashtra Delhi Delhi Delhi Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra Maharashtra West Bengal Delhi Maharashtra Delhi West Bengal Maharashtra Maharashtra Rajasthan Andhra Pradesh Madhya Pradesh Gujarat Maharashtra West Bengal Karnataka Madhya Pradesh Maharashtra
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122 123 124 125 126 127 128 129 130 131 132 133


Tuticorin Mumbai Thrissur Sangli Mumbai Mumbai Mumbai Calcutta Satara Mumbai Mumbai Calcutta

Tamil Nadu Maharashtra Kerala Maharashtra Maharashtra Maharashtra Maharashtra West Bengal Maharashtra Maharashtra Maharashtra West Bengal


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