Presentation on:IPO Process

Presented by: Rahul Gakhreja

INITIAL PUBLIC OFFER (IPO)

The first public offering of equity shares or convertible securities by a company is known as Initial Public Offering (IPO). Whereas, all the subsequent public offering are known as Follow-on Public Offering.

Reasons to go Public
Capital for fresh investment Beneficial for the follow-on issues Enhancing the reputation & visibility Better Valuation of the company Providing liquidation to the existing shareholders Corporate Governance

Parties Involved
Issuer Company Lead Managers Syndicate Members or Underwriters SEBI Registrar Investor

I.P.O. Process
Issuer Company - IPO Process Initialization Lead Manager's - Pre Issue Role - Part 1 SEBI Prospectus Review Lead Manager - Pre Issue Role - Part 2 Investor Bidding for the public issue

IPO Process (Continued)

Lead Manager Price Fixing Registrar - Processing IPO Applications Lead manager Stock Listing

Issuer Company - IPO Process Initialization

Appoint lead manager as book runner. Appoint registrar of the issue. Appoint syndicate members.

Lead Manager's - Pre Issue Role - Part 1

Prepare draft offer prospectus for IPO. File draft offer prospectus with SEBI. Road shows for the IPO.

SEBI Prospectus Review

SEBI review draft offer prospectus. Revert it back to Lead Manager if need clarification or changes (Step 2). SEBI approve the draft offer prospectus, the draft offer prospectus is now become Offer Prospectus.

Lead Manager - Pre Issue Role - Part 2 Submit the Offer Prospectus Decide the issue date & issue price band Modify Offer Prospectus with date and price band. Document is now called Red Herring Prospectus. Red Herring Prospectus & IPO Application Forms distributed to investors

Investor Bidding for the public issue (Book Building)

Public Issue Open for investors bidding. Investors fill the application forms and place orders to the syndicate members . Syndicate members provide the bidding information to BSE/NSE.

Book Building (cont.)

Syndicate members send all the physically filled forms and cheques to the registrar of the issue. Investor can revise the bidding by filling a form and submitting it to Syndicate member. Public Issue Closes for investors bidding.

Lead Manager Price Fixing

Based on the bids received, lead managers evaluate the final issue price.

Lead managers update the 'Red Herring Prospectus' with the final issue price and send it to SEBI and Stock Exchanges.

Registrar - Processing IPO Applications

Receiving application forms & cheques from Syndicate members. They feed applicant data & additional bidding information on computer systems. Send the cheques for clearance. Find all bogus application.

Processing IPO APP. (Cont.)

Finalize the pattern for share allotment based on all valid bid received. Prepare 'Basis of Allotment'. Transfer shares in the demat account of investors. Refund the remaining money though ECS or Cheques.

Lead manager Stock Listing

Once all allocated shares are transferred in investors dp accounts, Lead Manager with the help of Stock Exchange decides Issue Listing Date. Finally share of the issuer company gets listed in Stock Market.

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