An Empirical study on IPO Issue process

BY D.Hima Bindu
(Htno: Y9MBA101011)

Project submitted in partial fulfillment for the award
of the degree of MASTER OF BUSINESS ADMINISTRATION

By Krishna University, Machilipatnam -521001
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ANNEXURE-I

DECLARATION
I hereby declare that this project entitle “ An Empirical study on IPO Issue process“ submitted by me to the department of business management, Krishna University, Machilipatnam, is a bonafide work undertaken by me and it is not submitted to any other university or institution for the award of any degree diploma certificate or published any time before.

Name of the student:

Signature of the student:

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ANNEXURE –II

Certificate

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ANNEXURE-III

Abstract
The project aims to study an IPO issues with considering various levels by underwriters, issuers and lead managers and their functions for launching a new issue. This study derives the major reasons to launch an IPO and elaborate legal and statutory approvals by the Govt/SEBI to launch an IPO. It studies the Global IPO process and given information about upcoming IPOs. It also Analyses companies post IPO’s performance on return perspective and studied major key players of the market. It concludes that IPO is used by a company to raise its funds. The extra amount obtained from public may be invested in the development o f the company, although it costs a little to a company but it gives a way to get more money for long term investments.

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“give me great and valuable Page No. My special thanks are due to “ support.ANNEXURE-IV ACKNOWLEDGEMENT It is with real pleasure that. I am grateful to Zonal head Mr. 5 . Jamurdhin I wish to record my sincere and special thanks to Mr. Business management for his counsel and guidance during the preparation of this project. D. I record my indebtedness to my academic Guide. Dilip Kumar.SuryaChandrarao Head of Dept.

List of Tables List of Diagrams V VI (1) Introduction 1. What is IPO? Reasons for Listing IPO Market in India IPO Allotment Status IPO Procedure 10-12 13-15 16-17 18-19 20-22 1.1 09-24 Initial public offering (IPO) 10-22 • • • • • b.2 Research and Methodology Source of Data Other Source 23 24 23-24 (2) (3) Objectives and Scope Industry/Company Profile 25-29 30-33 Page No. 6 .TABLE OF CONTENT Chapter Content Page No. c.

7 .1 59-75 Latest News in IPO Sector 59-61 62-75 5.2 Major Player of IPO in India (6) Finding. Suggestions and Conclusion Bibliography 76-79 80-81 Page No.(4) Review of Literature Advantages & Drawbacks of IPO Example of Some Published Issue’s 58 34-58 34-39 • (5) Data Analysis and Interpretation 5.

Title of the Table Middle East Activity Table Industrial Distribution No. Page No.2.1. 1.3.IPO of NSE in India 58 Page No.ANNEXURE-V Table No. 8 . 50 1. 48 1.

ANNEXURE-VI Table No.6.4 23 1.8.2. 1. 1. 1. . 1. Title of the Diagram Different Kind of Issue How To Listing An IPO IPO Process Page No. . 11 13 15 Book Building Process IPO Returns Global IPO Activity Global IPO Activity by Ind Top Ten IPO in US 44 46 51 Page No. 1.3. 1. 9 .1.7.5 40 1.

10 .Chapter (1) Page No.

11 . In an IPO. fixed price method. is when a company issues common stock or shares to the public for the first time. younger companies seeking capital to expand. also referred to simply as a "public offering". best offering price and time to bring it to market. IPO in India is done through various methods like book building method. or a mixture of both. to the public in the country's capital markets. the issuer may obtain the assistance of an underwriting firm. for the first time. During an Initial Public Offer (IPO) the shares are given to the public at a discount on the intrinsic value of the shares and this is the reason that the investors buy shares during the Initial Public Offering (IPO) in order to make profits for them selves. shares that are either owned by the promoters of the company or by issuing new shares. The method of book building has been introduced in the country in 1999 and it helps the company to find out Page No. They are often issued by smaller.1  INITIAL PUBLIC OFFERING (IPO) Initial public offering (IPO). This is done by giving to the public. which helps it determine what type of security to issue (common or preferred).Part-1. Initial Public Offering (IPO) in India means the selling of the shares of a company. but can also be done by large privately-owned companies looking to become publicly traded.

the demand and price of its shares. The offers for shares that fall below the fixed price are rejected. During the company's Initial Public Offering (IPO) in India. The company that is issuing the Initial Public Offering (IPO) decides the number of shares that it will issue and also fixes the price band of the shares. A merchant banker is nominated as a book runner by the Issuer of the IPO. All these information are mentioned in the company's red herring prospectus. an electronic book is opened for at least five days. The successful bidders are then allotted the shares Page No. During this period of time. 12 . bidding takes place which means that people who are interested in buying the shares of the Company makes an offer within the fixed price band. Once the book building is closed then the issuer as well as the book runner of the Initial Public Offering (IPO) evaluate the offers and then determine a fixed price.

Also. it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. For the individual investor. and they are therefore subject to additional uncertainty regarding their future value Page No. 13 .IPO’s can be a risky investment. most IPO’s are of companies going through a transitory growth period.

The company is never required to repay the capital. therefore. allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital for future growth. Page No. where the money passes between investors). An IPO. 14 . but instead the new shareholders have a right to future profits distributed by the company and the right to a capital distribution in case of a dissolution. REASONS FOR LISTING When a company lists its shares on a public exchange. The money paid by investors for the newly-issued shares goes directly to the company (in contrast to a later trade of shares on the exchange. it will almost invariably look to issue additional new shares in order to raise extra capital at the same time.

thereby again providing itself with capital for expansion without incurring any debt. rather than having to seek and negotiate with individual investors. once a company is listed.  Liquidity: The shares once traded have an assigned market value and can be resold. they hope that the capital investment will make their shareholdings more valuable in absolute terms. However. Major Reason for Listing IPO  The increase in the capital: An IPO allows a company to raise funds for utilizing in various corporate operational purposes like acquisitions. it will be able to issue further shares via a rights issue. 15 . working capital. This is extremely helpful as the company provides the employees with stock incentive packages and the investors are provided with the option of trading their shares for a price. Page No. In addition. mergers. expanding plant and equipment and marketing. research and development. This regular ability to raise large amounts of capital from the general market. is a key incentive for many companies seeking to list.The existing shareholders will see their shareholdings diluted as a proportion of the company's shares.

 Valuation: The public trading of the shares determines a value for the company and sets a standard. This works in favor of the company as it is helpful in case the company is looking for acquisition or merger. without dividing the authority as in case of partnership. 16 . It also provides the share holders of the company with the present value of the shares. Page No.  Increased wealth: The founders of the companies have an affinity towards IPO as it can increase the wealth of the company.

as few corporate houses were using the abolition of the Controller of Capital Issues (CCI) in a negative manner. The Free pricing mechanism permitted the companies to raise funds from the primary market at competitive price. IPO MARKET IN INDIA The IPO Market in India has been developing since the liberalization of the Indian economy. as the companies were permitted to price the issues. The Central Government felt the need for a governed environment pertaining to the Capital market. stockbrokers. SEBI was given the authority of monitoring and regulating the activities of the bankers to an issue. 17 . The effects of the changes are Page No. One of the most important developments was the disassembling of the Controller of Capital Issues (CCI) and the introduction of the free pricing mechanism. and other intermediaries related to the stock markets. The IPO Market in India is on the boom as more and more companies are issuing equity shares in the capital market. the IPO Market went through its share of policy changes. in the 1990s. reforms and restructurings. The Securities Exchange Board of India (SEBI) was established in the year 1992 to regulate the capital market. With the introduction of the open market economy. portfolio managers. It has become one of the foremost methods of raising funds for various developmental projects of different companies. This step helped in developing the IPO Market in India.

In the year 1995 the growth of the Indian IPO market was 32 %. Page No. 18 .evident from the trend of the resources of the primary capital market which includes rights issues. public issues. private placements and overseas issues. The markets picked up speed again with the introduction of the software stocks. The growth was halted with the South East Asian crisis. The IPO Market in India experienced a boom in its activities in the year 1994.

A new company can launch IPO to raise capital to initiate its business. The sale of stock through such Initial Public Offering (IPO) is meant for the individual and corporate investors. The excess shares are then allotted to other investment bankers which are eligible to sell such shares. IPO ALLOTMENT STATUS Initial public offering is also popularly known as IPO. which is called as IPO Allotment Status. effectively. The process which involves determination of the issue size and type. The aim of such issuance of Initial Public Offering is to invest the accumulated corpus for. offer price and best time of introduction into the market is called "underwriting". In Page No. The shares held by such investors give them the rights of the company and to its future profits. IPO Allotment Status can also be defined as the number of stocks which an investment banker is permitted to sell to the general investor before the share is being traded on an exchange. Moreover. either opening -up of a company or expansion of an existing company. In other words. These underwriting firms or investment bankers are allotted some specified numbers of shares to sell. The underwriting is generally done by the investment bankers. Initial Public Offering can also be launched to raise money for expansion or other important operations of an existing company. an Initial Public Offering pools investments and utilizes it in building or expansion of the said company. is the first time sale of stocks. of a private company. 19 . Thus.

" enters a contract with a lead underwriter to sell its shares to the public. Common methods include: • Best efforts contract • Firm commitment contract • All-or-none contract • Bought deal • Dutch auction • Self distribution of stock A large IPO is usually underwritten by a "syndicate" of investment banks led by one or more major investment banks (lead underwriter). called the "issuer.  IPO . take the highest commissions—up to 8% in some cases. The underwriter then approaches investors with offers to sell these shares. 20 . the underwriters selling the largest proportions of the IPO. the underwriters keep a commission based on a percentage of the value of the shares sold. The sale (that is. i.PROCEDURE IPO’s generally involve one or more investment banks as "underwriters. the main governing body that determines such eligibility criteria and the IPO Allotment Status is the Securities and Exchange Board of India (SEBI). Upon selling the shares. the lead underwriters. Usually.India. the allocation and pricing) of shares in an IPO may take several forms.e." The company offering its shares. Page No.

Public offerings are primarily sold to institutional investors. such as the Magic Circle firms of London and the white shoe firms of New York City. For example. but some shares are also allocated to the underwriters' retail investors. as well the secondary sale of existing shares.U. The issuer usually allows the underwriters an option to increase the size of the offering by up to 15% under certain circumstance known as the green shoe or over allotment option. certain regulatory restrictions and restrictions imposed by the lead underwriter are often placed on the sale of existing shares. the offering will include the issuance of new shares. 21 . Europe. an issuer based in the E. IPOs typically involve one or more law firms with major practices in securities law.Multinational IPOs may have as many as three syndicates to deal with differing legal requirements in both the issuer's domestic market and other regions. The client pays no commission to purchase the shares of a public offering. Page No. the purchase price simply includes the built-in sales credit. may be represented by the main selling syndicate in its domestic market. Usually. A broker selling shares of a public offering to his clients is paid through a sales credit instead of a commission. Because of the wide array of legal requirements. However. intended to raise new capital. the lead underwriter in the main selling group is also the lead bank in the other selling groups. Usually. in addition to separate syndicates or selling groups for US/Canada and for Asia.

the best offering MAJOR PROCESS OF AN IPO  Eligibility Criteria: • years. • Minimum post issue face capital of Rs. 22 . which helps it determine what type of security to issue (common or preferred). IPOs are often issued by smaller. • 10% of the Issue to QIBs.10 Crores or Page No.00 Crore in preceding 3 Track record of Distributable profits at least 3 out of 5 preceding Net Tangible assets of Rs. • 10% of the Project cost from appraiser. • The proposed issue should not exceed 5 times of its Pre-issue The Company has a Networth of Rs.00 Crore in each of the preceding 3  The process of an IPO . 1. • years. the issuer obtains the assistance of an underwriting firm.Eligibility criteria: (Alternate route) • Book building process and 50% of the offer to QIBs or • 15% participation in project by F/Is or Schedule Banks.The first sale of stock by a private company to the public. • years. In an IPO. but can also be done by large privately owned companies looking to become publicly traded. 3. younger companies seeking the capital to expand.

• Market making for 2 years and Minimum number of allottees atleast 1000  • • • • • • • Official Process of IPO Appointment of Brokers. Advertisers and Bankers Conducting Road shows and Press Conference Opening and closing of Subscription list Preparation of Basis of Allotment Allotment of shares Listing of shares price and the time to bring it to market Page No. 23 .

24 .REASON OF THE OFFERING NEW IPO            Funds Requirement Funding Plan (Means of Finance) Appraisal Schedule of Implementation Funds Deployed Sources of Financing of Funds already deployed Details of Balance Fund Requirement Interim Use of Funds Basic Terms of Issue Basis for issue price Tax Benefits Page No.

Primary Source and Secondary Sources. Primary Dataactivities: the primary data was collected through the following Filled the IPO Industry related questionnaire to managers of a select group of companies And Paper Conversation Secondary Data.Part 1.the secondary data was collected through the following: Online Research material of the Various Financial Institution directly or indirectly involved with IPO. One of the important tools for conducting marketing research is the availability of necessary and useful data. Secondary Data used in External Source of Information Like internet. 25 . Some time the data are available readily in one form or the other and some time the data are collected afresh. paper cutting. Page No.2 Research and Methodology rE  SOURCE OF DATA Data’s are the useful information or any forms of document designed in a systematic and standardize manner which are used for some further proceedings. The sources of Data fall under two categories. magazine.

newspapers. 26 . government agencies. trade journals. Historical Trend Analysis. books. and white papers. and through access to access to more than 3000 paid databases. Page No. Judgmental Forecasting and Cause and Effect Analysis etc. industry portals. Linear Regression Analysis using software tools.  Analysis Method The analysis methods include the following: Ratio Analysis. OTHER SOURCE  Information Sources Information has been sourced from namely. trade associations. monitoring industry news and developments.

Chapter (2) Page No. 27 .

OBJECTIVES
To get the knowledge of IPO. To analyze the returns of IPO’s which were issued in the 1st

 

quarter of 2007.  To know the return of those IPO’s for 1 month, 3 months, 6

months, and 1 year.   To know the market rate of return for the same period. To know the procedure for calculating the Standard Deviation,

calculating Sharpe’s Ratio & the abnormal return.

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   Process.  India?    IPO’s.

SCOPE OF THE STUDY
Spread awareness about this process. Find out the companies which like to adopt this technique. Find out the factors which influence the IPO Listing

What the companies are looking from Open New IPO’s in

Analysis between Share Holder and IPO Companies Analysis of IPO’s post/present/future Prospects Analysis of Auction, Pricing, Issued Price and Reverse

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Chapter (3)

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Company Profile:

, Future Capital Holdings is the third leg in the Indian financial services space beyond the traditional banking and brokerage businesses. Our vision is to be the premier, most trusted and

innovative investing business. About Company Future Capital Holdings was conceptualized as a new age capital management and investing business that could play a vital role in the development of the consumption-led economy in India. As a company with an investing mindset, we view India as an attractive long-term investment opportunity across asset classes. Future Capital Holdings combines the entrepreneurial skills of world-class professionals from reputed international and domestic companies with the national scale and reach of the Future Group. Future Group has pioneered and established a nation-wide chain of over 12 million of retail space in 71 cities and 65 rural locations across the country.

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Our strong due diligence capabilities across asset classes—private equity. under the name Future Card. This capability coupled with our risk management and credit systems and our access to entrepreneurs and developers through the Page No. controlled or managed by PRIL and its subsidiaries. Future Capital Financial Services Ltd ("FCFS") is operated through 2 verticals. The retail financial services business. project and acquisition financing. Consumption loans. Life and Non–Life Insurance products (as a corporate agent of Future Generali). The products offered by our Retail Credit business are Personal loans. and other special situations related financing. The Retail Credit business is operated under the Future Money brand. pursuant to an agreement with PRIL. under which we have the exclusive right to provide financial products and services at present and future malls. Our Wholesale Credit business taps a large and relatively unaddressed market of mezzanine. third party mutual fund products and fixed deposit programs. stores and retail outlets in India which are owned. Home equity loans and Credit cards. promoter. housed under a 100% subsidiary of FCH. real estate and special situations—allow us to appropriately analyze risk. through an agreement with ICICI Bank. 32 . Retail Credit & Distribution.We launched our retail financial services offering in June 2007.

16th June 2008 The Gold Rush .FCH-Future Group eco-system of partners and suppliers favorably positions us to grow this business.Business Standard . 18th Feb 2009 Back To Basics . 6th Nov 2007 Future gets RBI nod for credit card . 18th Feb 2008 Talent sets a company apart .Business India .The Economic Times . 7th Sept 2008 Urban Muscle . 5th Nov 2007 Reforms gains racing down country roads.Economics Times.Times Business.Reuters . finds study .India Today.Times Business. Recent news articles on FCH 'India's domestic consumption story intact": Sameer Sain . 18th July 2007 Page No. 12th Aug 2008 Highest average income recorded in Chandigarh .Times of India.Business India. 8th Aug 2008 Changing Perceptions . 26th July 2007 Finance services firms' salaries head northward . 33 .Business Today . 10th Feb 2009 Future Bright .

Chapter (4) Page No. 34 .

mergers. The companies are launching more and more IPO’s to raise funds which are utilized for undertakings various projects including expansion plans. Page No. undertaking new projects. expanding plant and equipment and marketing. The Advantages of IPO is the primary factor for the immense growth of the same in the last few years. ADVANTAGES & DRAWBACKS Major Advantages of IPO IPO has a number of advantages. All types of companies with the idea of enhancing growth launch IPOs to generate funds to cater the requirements of capital for expansion.  The increase in the capital: An IPO allows a company to raise funds for utilizing in various corporate operational purposes like acquisitions. IPO helps the company to create a publi c awareness about the company as these public offerings generate publicity by inducing their products to various investors.Part 4. acquiring of capital instruments. working capital.1  OF IPO The Advantages of IPO are numerous. The IPO or the initial public offering is a term used to describe the first sale of the shares to the public by any company. research and development. 35 .

A lot of expenses have to be incurred in the form of legal fees. Apart from such enormous costs. This is extremely helpful as the company provides the employees with stock incentive packages and the investors are provided with the option of trading their shares for a price. there are other factors as well that should be taken into consideration by the company while introducing an IPO. Page No.  Valuation: The public trading of the shares determines a value for the company and sets a standard. A continuing expenditure has to be incurred after the setting up of an IPO by the parent company. without dividing the authority as in case of partnership. printing costs and accounting fees. Setting up an IPO does not always lead to an improvement in the economic performance of the company. But. 36 . This works in favor of the company as it is helpful in case the company is looking for acquisition or merger. in order to launch an Initial Public Offering (IPO).  Increased wealth: The founders of the companies have an affinity towards IPO as it can increase the wealth of the company. Drawbacks of IPO’s It is true that IPO raises huge capital for the issuing company. it is also necessary to make certain investments. It also provides the share holders of the company with the present value of the shares. Liquidity: The shares once traded have an assigned market value and can be resold. Such expenses might cost hundreds of US dollars. which are connected to the registering of an IPO.

the CEO of the company would have to spend a lot of time in handling the SEC regulations or sometimes he hires experts to do the same. The SEC regulations require notifications from the shareholders of the company. Some companies hire experts to do the needful to ensure a hassle-free execution of the task. The shareholders have an active participation in every decision that is being taken even if they do not hold 50 percent share of the company. the expenses become a routine in every activity involved. and also approvals from them while making important business decisions. They have their individual demands to be met as they own a certain percentage of stakes in the company. A major risk with shareholders is that. if not handled with efficiency. Besides. The primary owners of the company or the people holding maximum authority in the company cannot take decisions all by themselves once an IPO has been launched and shareholders have been formed.Such factors include the rules and regulations involved to set up public offerings and this entire process on the other hand involve a number of complexities which sometime require the services of experts in relevant fields. meetings. The launch of IPO also brings about shareholders of the company. 37 . Shareholders have ownership in the company. prove to be some major drawbacks related to the launch of IPOs. in case they see the price band of the stakes of that company is going Page No. they can sell off their stocks any time they want. After the IPO is introduced. All these aspects.

“Keen investor interest in India’s strong growth story has Page No. 38 . continue to fuel India’s strong IPO markets. follow-ons in 2007. and a fouryear bull run on Bombay’s Stock Exchange (BSE).000 cr in IPOs.down.The Hindu  IPO PAST/ PRESENT/ FUTURE OF India’s rapid economic growth.The Times of India  India Inc's fund raising via IPO in 2008 dips to 3-yr low. robust corporate profit stability. This will lead to a further drop of the value of shares in the market which in turn will decrease the overall value of the company.  ISSUE’S EXAMPLE OF SOME PUBLISHED  Indian Bank IPO on the anvil-India Business-Business-The Times of India  India is world's 8th largest IPO market.The Economic Time  India Inc raises over Rs 45.The Economic Time  IPO market to boom in second half.

Indian IPO activity quickly resumed its upward momentum. although energy companies dominated with more than 50% share of funds raised. Real estate IPO’s also generated stellar returns for investors.” says R. Page No. IPO Leader. Reliance Petroleum. India’s exchanges rank eighth in the world for numbers of IPO’s and value in 2006. India’s IPO market has been fairly broad-based. which raised US$1.3 billion. In 2006. Strategic Growth Markets. India’s largest IPO was petroleum rife nine company. In 2006.been real acted in the attractive valuations and key price/earnings multiples garnered by Indian companies. Currently.23 billion. Ernst & Young India.8 billion. Cairn Energy. 39 . which raised US$1. Despite a May 2006 market tumble that erased more than US$100 billion in value in the BSE and sparked concerns that the four-year Indian stock rally was over. In 2006. India’s markets launched 78 IPO’s and raised US$7. Balanchine. followed by the oil production and exploration company.

many venture capital driven companies were started. 40 . and due to generous stock options. Some companies were operated in a similar way in that their only goal was to have an IPO. which lists companies related to computer and information technology. Investors sought to get in at the ground-level of the next potential Microsoft and Netscape. during the dot-com bubble of the late 1990s. the vast majority of them rapidly entered cash crisis. employees could make a great deal of money as well. What makes these bubbles so clear is the ability to compare market Page No. Perhaps the clearest bubbles in the history of hot IPO markets were in 1929. This phenomenon was not limited to the United States.In the United States. Crisis was particularly likely in the case of firms where the founding team liquidated a substantial portion of their stake in the firm at or soon after the IPO (Mudambi and Treichel. quickly offered IPO’s. and in 1989. However. and seeking to cash in on the bull market. for example. 2005). The majority of IPOs could be found on the NASDAQ stock exchange. Some stock exchanges were set up for those companies. Usually. a similar situation occurred. Initial founders could often become overnight millionaires. when closed-end country fund IPOs sold at enormous premiums to net asset value. such as Osaka Securities Exchange. In Japan. stock price spiraled upwards as soon as a company went public. in spite of the large amounts of financial resources made available to relatively young and untested firms (often in multiple rounds of financing). when closed-end fund IPOs sold at enormous premiums to net asset value.

Apart from Reliance Power. This IPO has been a recipient of 17. In the year 2007. It contributed largely in the growth of stock market which rose by 47 percent.422.16 percent of its capital which accounts for around 6. When market prices are multiples of the underlying value.36 crores equity shares as bidding as compared to 6. The public offerings of the IPO of Kishore Biyani-led Future Group's financial services arm are estimated to rise around Rs. the financial services arm of the diversified Future Group is expected to divest around 10.7 billion in the previous year. 41 . Future Capital. bubbles are likely to be occurring. Page No. 490 crores future capital.prices for shares in the closed-end funds to the value of the shares in the funds' portfolios.2 billion from 88 IPOs as compared to USD 4. A Brief Note on Future of IPOs in India The IPO industry in India has received a major boost in the current year especially with the emergence of Reliance Power IPO on 15th January 2008. The subscription for the issue of this IPO was opened from 11th January 2008 to 16th January 2008. Future of IPOs in India is quite bright as the Future Capital Holdings in India are expected to rise up to USD 124 million by the end of 2008.000 equity shares on offer. another IPO which brought in major capital is Kishore Biyani-led Future Group's financial services arm. the IPO market in India has been estimated to raise USD 8. 700 to Rs. The price range fixed for the Equity shares of this IPO varies between Rs. 765.4 million shares in the IPO market.

The IPO of Oil India Limited has been reported to raise Rs.1500 crores and will hit the capital market in March 2008. WHAT ARE THE CRITICAL AREAS TO FOCUS            Compliance with SEBI Guidelines 90% subscription of the issue Underwriting Agreements Firm Allotments Listing approvals from the Stock Exchanges ROC approval for the prospectus Advertising and Road Shows Statutory advertisements In-time allotments and refunds Listing of the shares with the Exchanges SEBI GUIDELINES  Filing of prospectus: Page No. 42 . the government has confirmed the opening of the Oil India IPO by March 2008.Assuming a major hike in the Indian IPOs.

scheduled commercial banks.Ex • • Issuer is obligated SEBI is not obligated  Application for Listing: No IPO without application for listing  Dematerialization of shares: Agreement with Depository Present shares also to be in demat public may opt either physical or demat shares  • “Qualified Institutional Buyer” shall mean: Public financial institution as defined in section 4A of the Companies Act. Foreign venture capital investors registered with SEBI. Page No. 43 . Venture capital funds registered with SEBI. 1956. Multilateral and bilateral development financial institutions. • • • • • Mutual funds.Prospectus to be filed with SEBI through Merchant Banker At least 30 days < filing with ROC SEBI may suggest changes < 30 days SEBI to consider only after approval from St. Foreign institutional investor registered with SEBI.

whose project is appraised by F/I. (as on the date of filing Grading for IPO has been obtained from Page No. Pension funds with minimum corpus of Rs. Insurance companies registered with the Insurance Regulatory and Development Authority (IRDA). Banks Subject to licensing New Bank being set up on acquisition or take over of An infrastructure Company. 25 crores). 44 . IL & FS and IDFC  • the prospectus with ROC): • at least one agency IPO Grading: No IPO unless. 25 crores. including Pvt. • • Provident funds with minimum corpus of Rs.  • by RBI • a bank • Exemption from Eligibility Norms: Banking Co.• • State industrial development corporations.

if there are any  Price Band: • Price Band to be 20% • Max price can be 20% above the floor price • Board of directors may be authorized to fix the price  • Denomination of shares Denomination of the shares is not restricted Page No.• included in the prospectus • issuer Grading and the rationale have been Grading expenses to be borne by the  Present shares to be fully paid-up: • shares partly paid up as on the date of IPO • up or forfeited The Shares to be fully paid No IPO. 45 .

500 Full disclosure of the face value in offer document  • • Guidelines on issue of advertisement: Advertisement shall be truthful. complex terms No advertisement in Crawlers Reference to the red-herring prospectus No slogans. 46 .10/• or more • In case the issue price is <Rs. captions or one liners Shall include risk factors Risk factors to be given in the same font size The print size shall not be less than point size 7 Page No. where the issue price is Rs. fair and clear Shall not contain untrue or misleading or misleading statement • • • • • • • • • • Disclose all relevant facts Clear.• Rs. legal. concise and Understandable language Avoid technical.500. the Face Value shall be The Face Value may be less.

That is to say that. which could become a `missed opportunity' in the future. the pricing of any IPO is what influences the decision of any investor. in the short term. it could increase the cost of raising capital in India and urge companies to seek capital overseas. Given that the decision to invest or avoid investments in any IPO is most often a function of the pricing. Till such time the utility of the IPO grading system is unraveled. might get defeated if it leads to a false sense of buoyancy or alarm among investors. can be price-driven and not purely motivated by company fundamentals. which. Similarly. rating agencies (experienced in debt rating) could face trouble with rating the equities. is more dynamic and cannot be standardized. the lack of this aspect in the present IPO grading system could make the whole process an unfinished task. Further. investors may get deluded by a low-graded IPO. Also. unlike debt rating.More often than not. it is advisable for investors to use the grades only as an additional input to make an informed Page No. The rating agencies. a higher graded IPO may well tempt small investors into falsely believing that a high premium would come about on listing. 47 . at times. will not talk about ``what price'' and ``what time'' aspects of the offer. even good companies at a higher price could be a bad investment choice. in this case. Markets. thus. IPO grading mechanism is a globally-unique initiative. while the not-as-good ones could be a steal at lower prices. The purpose of introducing grading. Despite having disclaimers.

and the proliferation of capital-raising options. escalating rivalry between the world’s stock exchanges. Around the world. to make a final choice.decision. key IPO trends refl ect the effects of globalization: flourishing stock markets awash in liquidity. vibrant growth in the emerging markets. often looking outside domestic markets for high growth opportunities. together with the grading. pricing and valuations of an IPO. 48 . the rise of more world-class financial centers. investors.  GLOBAL IPO MARKET ed globalization Accelerat of capital continues drive to the record-setting world markets IPO of 2006–2007. In the past 18 months. the boom in large listings on local exchanges. especially private equity’s emergence as a key player behind so many Page No. Investors need to be convinced about the business potential. and stock exchanges think and act much more globally. companies.

globalizing capital and a surge in IPO ready companies worldwide are broadening the horizons of the world’s financial markets Page No.large IPO’s. 49 . In 2007.

foreign investors grow more comfortable investing locally. the Industrial and Commercial Bank of China (ICBC) with US$21. with US$56. the Hong Kong Stock Exchange (HKSE) hosted privatizations of China’s two largest state-owned banks — including the world’s largest IPO ever. Greater China’s IPO market soared to an all-time high. • As global resources migrate to China. especially in state-owned enterprises. GREATER CHINA KEY TRENDS: • Greater China’s IPO markets launched mega–IPOs in 2006.9 billion raised. Bank of China (BOC) which raised US$11 billion. and showcasing its world-class liquidity and corporate governance standards. 50 .6 billion raised in 175 offerings. • HKSE led world exchanges in fundraising in 2006. • Many large Chinese companies offer shares to US institutional investors under Rule 144A. with larger (but no longer super-sized) IPO’s in 2007. and the second largest offering. • A dual-listing trend and budding rivalry emerges for the Hong Kong and Shanghai stock exchanges. Driven by yet another year of rapid economic growth and robust secondary markets in 2006. Page No. The ICBC issuance was also the first time in China that shares were dual-listed. With conspicuous success.

• Cross border activity and the role of foreign capital continue to grow. all prime examples of the rise in localization. • Enabling relatively easy access to global institutional capital. 51 . • Indian exchanges hosted several billion-dollar IPO’s in 2006. Qualified Institutional Placements (QIPs) gain immediate popularity. INDIA KEY TRENDS: • The strength of India’s economy. and private equity fuel IPO’s in 2006 and 2007. energy sector. stock market. • The private equity rush into India has lead to a potential for many IPO exits. Page No. corporate profits.

Another key source of capital in Europe has been the large private equity firms. Europe’s steady economic expansion. including London’s AIM. low interest rates. the Eurocent’s AlterNet. and Deutsche Brose’s Entry Standard. and private equity. attractive stock prices relative to US peers. especially Russian companies listing in London. cross-border listings in London. • Europe’s junior exchanges. and vigorous secondary stock markets galvanized its IPO markets in 2006 and 2007. 52 . Europe’s exchanges attracted the most cross-border listings. Russia drives European IPO activity. For the second year in a row. and sizeable public-to-private transactions. • The ballooning growth in European private equity is leading to more IPO exits. are thriving with smallcap activity. EUROPE KEY TRENDS: • Europe’s IPO markets rose to an all-time high in 2006. • London has become the top listings destination for cross-border issuers seeking relatively quick and easy capital. and remain high- fl years in • 2007 bolstered by beefy deals. • As the region’s high-growth story. Page No.

Page No. most Middle East markets endured erratic performance in 2006. irrational retail speculation and lack of market depth. • The Middle East IPO pipeline is expected to expand. 53 . but seem to be steadier in 2007. with large-scale privatizations and infrastructural projects in the works. MIDDLE EAST KEY TRENDS: • After three years of record growth. • Factors leading to Middle East volatility include excess liquidity.

• Kazakhstan launches large IPOs in resources and banking sectors with several major banks expected to go public in 2007. and corporate governance issues. • A GDR in London combined with a US Rule 144A offering is the most popular form of listing. • Larger Russian companies seek credibility and deeper liquidity by listing in London. Page No. • As the private equity market remains undeveloped. commodity prices. with the best valuations. particularly in the commodities and fi nancial services sectors. CIS/RUSSIA KEY TRENDS: • Russian IPO markets fl ourish in 2006 and 2007. 54 . IPOs are by far the most popular Russian exit strategy. • Russian companies face uncertainty ahead with 2008 presidential elections.

55 . Australia’s stable economy. As Australian stock markets rise for the fourth year in a row. Page No. • A recent surge in private equity will lead to many IPO exits in next 12–24 months. raising US$4. The largest Australian IPO of 2006 was explosives maker Dyno Nobel worth US$800 million. with many listings in the resources and energy sector. KEY TRENDS: • AUSTRALIA Rising commodity prices and demand from Asia fuel thriving resources and energy sectors.2 billion. record corporate profi ts and booming resources sector have led to an extraordinarily active IPO market. Australia launched 173 IPOs. In 2006.

and strategic advantages. Page No. rather than in the US. a US listing is still seen as the “gold standard” with access to the deepest pool of capital. For a truly global company. and spurred US-domiciled IPO numbers to record heights. UNITED STATES KEY TRENDS: • Robust US markets garner the highest number of IPOs in 2006 and maintain momentum with a pipeline of high-quality deals in 2007. globalization of capital may be the primary force behind the trend as it has lead to stronger. In the past 18 months. as local markets grow more liquid and better regulated. more liquid. the vitality of the US stock market has whet investor appetite for risk. a valuation premium. competitive markets worldwide. • Most global companies list at home. 56 . Although some market watchers blame US regulations for the rise in non-US cross-border issuances.

Many companies are planning to launch their IPOs in the financial year 2009-2009. Various companies issuing upcoming IPOs in India as on 3rd December.2  UPCOMING IPO IN THE MARKET Upcoming Initial Public Offering (IPOs) in India at a glance: Initial Public Offer (IPO) in India. Pipavav Shipyard Ltd whose lead manager is Citigroup Global Markets India Pvt. 2008 are: • UTI Asset Management Company Ltd whose lead manager is Sbicap Securities Ltd. 57 . • • Madhana Industries Ltd whose lead manager is Edelweiss Securities Ltd. Ltd. Ltd. The Upcoming IPOs in India are being issued by those private companies that want to sell their shares in the country's capital markets. • Mahindra Holidays & Resorts India Ltd whose lead manager is HSBC Securities And Capital Markets India Pvt. means the first sale by a private company of its shares to the public. Page No.Part 4. Initial Public Offers (IPOs) in India. are usually issued by small companies but at the same time big private companies also go public by issuing their shares.

58 . • National Hydroelectric Power Corporation Ltd whose lead manager is Enam Securities Pvt. • • Pride Hotels Ltd. • • • • Kiridyes and Chemicals Ltd whose lead manager is Centrum Capital Ltd. Ltd. Ltd. whose lead manager is Edelweiss Securities Ltd. • Man Infraconstruction Ltd. Oil India Ltd. • • • • • Oswal Wollen Mills Ltd. Alkali Metals Ltd.• Gammon Infrastructure Projects Ltd whose lead manager is Sharekhan Ltd. Ltd. whose lead manager is Karvy Stock Broking Ltd. whose lead manager is Enam Securities Ltd. whose lead manager is UTI Bank Ltd. Ltd. • Resurgere Mines & Minerals India Ltd whose lead manager is Motilal Oswal Securities Ltd. Jhaveri Flexo India Ltd whose lead manager is SREI Capital Markets Ltd. Uma Precision Ltd. TCG Lifesciences whose lead manager is Enam Securities Pvt. Neel Metal Products Ltd whose lead manager is ICICI Securities Ltd. whose lead manager is Kotak Mahindra Capital Company Ltd. Gokul Refoils And Solvent Ltd whose lead manager is Intensive Fiscal Services Pvt. whose lead manager is Religare Securities Ltd. Page No. whose lead manager is Citigroup Global Markets India Pvt. Future Ventures India Ltd.

FY10 EPS at Rs 15/sh: Edserv Softsystems EdServ Softsystems ends with 129% premium EdServ Softsystems lists at issue price of Rs 60 EdServ Softsystems to list on March 2 Crisil finds weak corporate governance structure in IPO cos BSNL\'s IPO plans still on cards: Scindia Page No. • • Cox & Kings (India) Ltd. • • • • • • • • • • • Ramsarup Lohh Udyog Ltd. • Aishwarya Telecom Ltd. 59 . whose lead manager is Enam Securities Ltd. whose lead manager is SREI Capital Markets Ltd. Edserv Soft at 20% lower circuit. India Max sells 4 lk shrs Edserv IPO: Will 50% allotment to QIBs affect stock ahead? See FY09.• Multi Commodity Exchange India Ltd. whose lead manager is JM Morgan Stanley Financial Services Pvt. whose lead manager is ICICI Securities Ltd. witnesses 45 bulk deals Bharat Oman Refineries defers IPO Edserv witnesses 188 bulk deals. whose lead manager is Kotak Securities Ltd. RNS Infrastructure Ltd. Ltd. • • • ACME Tele Power Ltd. Midvalley Entertainment Ltd. whose lead manager is Religare Securities Ltd. Jaiprakash Power Ventures Ltd whose lead manager is Enam Securities Ltd. whose lead manager is Microsec Capital Ltd.

60 .• • ING Vysya pays Rs 4 lakh to settle IPO case Chapter (5) Page No.

A report by Thomson Financial states that India has occupied 49.Part 5.1  LATEST NEWS IN IPO SECTOR The IPO market in India has been growing at a massive pace for the past few years.6 billion IPO. has deferred its plan to launch an initial public offer due to global economic slowdown. the country has become the largest IPO market across the globe so far. 61 .000-crore hill city project here. The global IPO market has deteriorated by 36. With the advent of some leading IPOs in India.  HCC defers plans to launch IPO of Lavasa Corporation Construction major HCC's group company Lavasa Corporation.3 billion proceeds in the global IPO market from eight deals of late.1 percent during the past one year.7 percent in the year 2007. the biggest contributor to these deals has been the USD 3 billion IPO of Reliance Power. India has saved almost USD 3. which is developing an ambitious Rs 30. Page No. Emaar MGF has revised the price range for the Equity shares. Initially it was Rs 540-630 per share which now costs Rs 530-630 per share.1 percent of the global IPO proceeds in the current year 2008 as compared to 3. The second largest IPO in India is Emaar MGF which is a USD 1. As has been estimated by Thomson Financial.

Page No. 62 . receiving bids worth over Rs 3. huge investor response Public issue of Tata Group firm Tata Capital got subscribed over six times of the offer.440 cr plant. Bharat Oman Refineries defers plans to raise funds through IPO The Bharat Petroleum Corporation-promoted Bharat Oman Refineries has deferred its earlier plans to raise funds through an initial public offer.  ONGC mulls IPO for Rs 12.  Tata Cap issue over subscribed 6 times. the rating agency said in a release on Thursday.  Governance’s weak in 50% of IPOs: Crisil Corporate governance standards were ‘weak’ in almost 50% of the 29 initial public offerings (IPOs) graded by Crisil since May 2007.440 crore petrochemical plant at Dahej in 2011. gives 19% stake to GAIL ONGC is planning an initial public offering of its subsidiary. driven by robust response from all categories of investors. even as it agreed to give state gas utility GAIL India a 19 per cent stake in the mega project. due to adverse market conditions.000 crore. which is building Rs 12.

Page No.  Government plans divestment in five PSUs via IPOs Government is planning to list at least PSUs in the stock markets after a similar effort last year had to be shelved at the last moment when the stock markets tanked following the global financial meltdown. Corporate governance may weigh more in future IPO gradings Ratings agencies are likely to increasingly look at corporate governance as a key aspect of gradings in initial public offers (IPO) in the future. 63 .

It is a risky affair for any individual investor as he or she does not have any clue regarding the performance of the shares on the first day of sale. India has saved almost 3.Part 5. The IPO is usually set up by the smaller or newly emerging companies but the large-scale companies also go for it in order to become publicly traded. The issuer is faced with important considerations like the security of the issue. Tulsi Extrusions Limited IPO. Page No. All these IPOs have opened their subscriptions in 2008. Future Capital Holdings Limited IPO and many more. EMAAR MGF IPO.3 billion proceeds in the global IPO market through eight deals which has made it the largest IPO market across the globe.2  MAJOR PLAYER OF IPO IN INDIA Some of the leading IPOs in India include Reliance Power Limited IPO. Reliance Power IPO has been the biggest contributor in this regard The Initial Public Offering (IPO) is defined as the first set of stocks that are sold out by a company to the public in order to seek an expansion of the capital. 64 . Onmobile Global Limited IPO. price band offered for the same and the time for sale.

2008. Reliance Power Limited Company is planning to generate capital worth Rs. 700 crores through the IPO. UBS AG and Deutsche Bank AG. ABN Amro Rothschild. The price band of the equity shares of Reliance Power IPO has been fixed at Rs.Top Companies: An analysis Reliance Power IPO has been issued by Reliance Power Limited. Reliance Power IPO was issued on 15th January. JP Morgan Chase & Co. Reliance Power IPO will be listed on the National Stock Exchange (NSE) and also on the Bombay Stock Exchange (BSE). The main objective of Reliance Power IPO is that the proceeds from the issue will be used to fund the power generation projects that the company plans to carry out. Page No. 11. 405. 2008 and closed on 18th January. The lead bankers of Reliance Power IPO are Enam Securities. The total size of Reliance Power IPO is around 26 crores equity shares. 65 . This makes it the largest IPO in the country as on 17th January.450 per equity share. 2008. Kotak Mahindra Capital Co. ICICI Securities.

The total size of BGR Energy IPO is 9.136. 100. Out of the total number of equity shares around 500.636.000 has been reserved for the employees of the company and about 8. 480.000 have been issued to the public.000 equity shares of Rs. Page No. 66 . and Kotak Mahindra Capital. The maximum amount for subscription in BGR Energy IPO for the retail investor was Rs. The lead managers of BGR Energy IPO were CLSA India. The minimum order quantity for BGR Energy IPO was fourteen shares.000. 10 each. was incorporated in 1985. UBS Securities India. SBI Capital Markets. The registrar of BGR Energy IPO was Intime Spectrum Registry Ltd. BGR Energy IPO was listed on the National Stock Exchange (NSE) and also on the Bombay Stock Exchange (BSE).BGR Energy System (India) Ltd. refinery. BGR Energy System (India) Ltd. 2007. 2007 and closed on 12th December. gas & oil. The price band of BGR Energy IPO has been fixed between Rs. is engaged in the business of producing and selling different kinds of equipments. 425 and Rs. services and systems for power. and petrochemical industries .BGR Energy IPO was issued on 5th December.

the total annual income was Rs 438. Faridabad. 67 . Nasik. Pune. Hyderabad. Cinemax India is one of the leading exhibition theater chains in India. Page No. Cinemax India is a part of the Kanakia Group. Ahmedabad. It is operating in several locations throughout the country. Bangalore. Guwahati. All together in the year 2006 it had 33 screens in 10 different locations.60 million and the net profit was Rs 67. The Cinemax India IPO was launched with the purpose of utilizing the funds for meeting the requirements of the capital expenditure of establishing 19 new theater screens throughout the country.The Cinemax India IPO was launched in the year 2006. In the year 2006. The proceeds from the IPO would also be used for the general corporate purposes which include acquisitions.Cinemax India has filed its red herring prospectus with the Securities and Exchange Board of India (SEBI). Some the places where the Cinemax India is planning to set up theaters are Kolkata. Panipat.69 crores.64 million. Nagpur. Ghaziabad. Siliguri. Ludhiana and Mumbai. at an estimated cost of Rs 110. Indore. for the purpose of expanding the company and setting up theater screens in different locations.

5 times. ICICI Bank has also decided to raise money by selling off the shares of its investment company for insurance business. 2007 a week after the opening of the DLF IPO. 68 . One of the chief focuses of ICICI IPO was to generate interest among the retail investors keeping in view the prevailing market price of around Rs. The ICICI Bank IPO has reportedly crossed the expected subscription amount by 10. Page No.5 billion from the issue of American Depository Receipts. In 2007. ICICI IPO offered discount rates to its retail investors. 903.000 crores from investors from its Initial Public Offerings (IPO).5 times. ICICI Bank has planned up to elevate another USD 2. The international investors will be endowed with 5 percent equity from ICICI Bank. The public offerings of the bank were subscribed by 11. ICICI Lombard General Insurance and ICICI Prudential Asset Management. 10. This selling off of shares of the investment company of ICICI Bank will be cleared by RBI and IRDA. The bank has also decided for a shifting of its assets in other subsidiaries namely ICICI Prudential Life Insurance. ICICI Bank has got the approval from the Foreign Investment Promotion Board (FIPB) to sell up to 24 percent equity in the ICICI investment company. ICICI Bank raised Rs. The subscriptions of ICICI IPO closed on 22nd June 2007. ICICI Bank's domestic issue is part of a USD 5 billion capital raising program.ICICI Bank IPO was launched on June 18.

950. Indian Bank offers diversified banking services and has three subsidiary companies.000. The retail segment was given 23.Indian Bank was established on 15th August 1907 as a part of the Swadeshi Movement in India. The size of the Initial Public Offering (IPO) of Indian Bank was 85. The Indian Bank has 1411 branches spread all across the country. almost 100 years after the bank was established. It was done through 100 percent book building and had a face value of Rs. Indian Bank has more than 22. Objectives of Indian Bank IPO • To fulfill the capital requirements for implementation of Base II standard. The total size of Indian Bank IPO was estimated to be around Rs.206. The minimum number of shares to be purchased was kept at 75. The price range varied from Rs.782 crores.000 equity shares. The foreign branches of Indian Bank are set up in Singapore and Colombo Page No.91 and the tick size was Re.100.000 employees. 69 .1.500. • To provide finance for developing business infrastructure. The retail investors were given the maximum subscription amount of Rs.10. Indian Bank IPO was issued in February 2007. The issue of Indian Bank IPO was opened on 5th February. 2007 and closed on 9th February 2007.77 to Rs. • To provide capital adequacy for it's loan and investment portfolio section.

Kingfisher Airline IPO. to be issued for the first time in the year 2008. The accumulated corpus would be utilized to fund its airline business and to payoff debt for its acquired liquor company Shaw Wallace & Company. The brand is being used for two business entities . The Initial Public Offering of the Kingfisher Airlines would target a corpus of US$ 200 million and the rest would be raised through the IPO of the liquor business. 70 . This IPO would be used to fund its aggressive expansion plans in India. The brand Kingfisher is being owned by the business conglomerate United Breweries Group. Till now the company has not launched any IPO to fund its aggressive expansion plans. Mr Vijay Mallaya. to finance the airline's expansion and funding of A380s air fleet. Page No. Dr Vijay Mallya is the Chairman and CEO of both the segments. but plans to launch it in near future to raise capital. said that the group would come up with an Initial Public Offering in 2008 and would raise a total corpus of US$ 400 million.Airlines and Alcoholic Beverage.Kingfisher till date has not launched any IPO. The Chief of the United Breweries Holding Ltd (UBHL). The Airlines operates under the name of "Kingfisher Airlines" and the alcoholic beverage segment manufactures "Beer" and "Mineral Water" under the same brand name. but has expressed its wish to launch one soon.

was incorporated in 1995 and the company is engaged in the business of infrastructure project development. As on 30th June 2007. KNR Constructions Ltd. IPO is Intime Spectrum Registry Limited.KNR Constructions Ltd.874. The company plans to raise through KNR Constructions Ltd. Karnataka. IPO has been issued by the company in order to fulfill various objectives such as to meet the company's requirement for working capital and to purchase equipments. The issue of KNR Constructions Ltd. The lead manager of KNR Constructions Ltd. IPO was opened on 24th January and closed on 29th January. IPO is 7. IPO has been listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). IPO around Rs. had around twenty four projects in the various states of India that included Assam. KNR Constructions Ltd. 10 each. 71 .KNR Constructions Ltd. and management of the infrastructure of urban water. Andhra Pradesh and Madhya Pradesh. The registrar of KNR Constructions Ltd. 142 crores from the Indian capital market. Uttar Pradesh. 2008. engineering and procurement for various sectors like irrigation. The company provides services of construction. IPO is Axis Bank Limited.570 equity shares at the face value of about Rs. highways & roads. Page No. The total number of shares issued by KNR Constructions Ltd for its KNR Constructions Ltd. Tamil Nadu.

Page No. 72 .

The registrar of Manjushree Extrusions Ltd IPO was Alpha Systems Private Limited and it was listed on the Bombay Stock Exchange (BSE).07 crores. 73 . 100.2006 this figure stood at Rs. The various objectives of issuing Manjushree Extrusions Ltd IPO by the company were to use the proceeds to expand the operations of the company and also to meet the requirement of the working capital. 2008 and it closed on 6th February. 1987 and it is engaged in the production of plastic packaging items like containers and jars. The maximum amount of subscription by the retail investor was around Rs. Manjushree Extrusions Ltd manufactures products for multinational companies in various sectors like food processing. Page No.Manjushree Extrusions Ltd IPO was issued on 31st January. 10.32 lacs.2005.11 lacs and in the following year. The face value of per equity share of Manjushree Extrusions Ltd IPO was Rs. In 2005.000 in Manjushree Extrusions Ltd IPO. 282. 2006-2007. The lead manager of Manjushree Extrusions Ltd IPO was Centrum Capital Limited. 23. Manjushree Extrusions Ltd was incorporated on November 13th. agrochemicals and FMCG. The net profit of Manjushree Extrusions Ltd came to Rs. pharmaceutical. The total size of the equity share of Manjushree Extrusions Ltd IPO was around Rs. 2008.42 lacs in 2004. 112. this figure increased to Rs. 137.

94 crores shares. 125 per share above the Floor price of Rs. Maruti IPO received more than 300. A huge number of institutional investors also paid a lot of importance in investing in Maruti. government would get Rs. 2003 and closed on June 19.993 crores for 7. Page No. 115. The shares were allotted to the individuals on a pro rata basis. The IPO of Maruti is claimed to be one of the biggest capital market transactions in recent years in India and also the largest Book Built IPO that has been implanted in India till date. which led to an over-subscription of the public offerings of Maruti by more than ten times. The response to Maruti IPO was overwhelming within the subscription period. 2003. The government has allotted 60 percent shares to the retail investors and 40 percent shares to the institutional investors.The Maruti IPO has set a price range of Rs. Consequently.000 applications which is a record in the history of IPO in India. The subscription for Maruti IPO opened on June 12. The majority of applicants to these comprise of the Indian retail investors. The government decided to shell out 85 percent shares of IPO to the noninstitutional investors and 15 percent shares to the non-institutional high networth individuals. But SEBI recommended that 60 percent can be given to the institutional investors but at least 40 percent should be allotted for the retail investors as well. They received the allotments on the basis of the price range already fixed by the government. 74 .

Power Grid Corporation of India (PGCIL) raised a capital of Rs 6.009 crores. 75 . The price range of Power Grid Corporation of India IPO was between Rs. 52 per share. The shares of the IPO of Power Grid Corporation of India had a price range of Rs. In the year 2006. Citigroup and Enam. The company launched their IPO in 2007 and the subscription was opened from 10th September 2007 to 13th September 2007. Citigroup. The funds raised from Power Grid Corporation IPO were submitted to the National Investment Fund (NIF). 44 to Rs. 44 and Rs.000 crores through the IPO. Karvy Computershare private limited was the registrar for the Power Grid Corporation IPO. Power Grid Corporation of India Limited (PGCIL) reported a 28 percent jump in the net profit which amounted to Rs 1. accomplish several projects and operate transmission lines and grid network. The proceeds from the IPO will be used to set up branches in almost 12 countries across the globe. Kotak and Enam were the lead managers for the Power Grid Corporation IPO. A unit will be set up in China in order to provide consultancy services.The subscription of Power Grid Corporation of India IPO was opened from 10th September 2007 to 13th September 2007.. The lead managers of the IPO of Power Grid Corporation include Kotak. 52. The proceeds from Power Grid Corporation IPO were submitted to the National Investment Fund (NIF). Page No.

Further. Reliance Industries Limited. This Initial Public Offering of the Reliance Petroleum raised Rs 6.000 crores. The said refinery would have a capacity of 580. annexed to its Jamnagar refinery in Gujarat. The price band for the Reliance Petroleum IPO was fixed between Rs 57 and Rs 62 per equity share.The Reliance Petroleum IPO was launched by Reliance Petroleum Limited.000 tons per annum. The price band for the Reliance Petroleum IPO was fixed between Rs 57 and Rs 62 per equity share and it raised Rs 6. the petrochemical segment of the legendary Indian business conglomerate. it would also utilize a part of the accumulated fund for the setting-up of a polypropylene plant which would have a production capacity of 900. The Reliance Petroleum IPO was launched on 13th April 2006 and the bidding was closed on 20th April. The Mukesh Ambani led Reliance Petroleum Limited plans to expand its present petrochemical business. Page No. which would be operational by the end of 2008. The main purpose of launching the Reliance Petroleum IPO was to fund its refinery project.000 barrels of crude oil per day. 76 . Petroleum IPO. The Reliance Petroleum IPO issued 45 crores equity shares and raised Rs 2. This refinery project of Reliance Petroleum would be an export oriented oil refinery in the special economic zone.790 crores at the upper end of the price band. The Reliance Petroleum IPO was very popular amongst retail investors.000 crores.

Techpro Systems (TSL) plans to enter the Indian capital market with its Techpro Systems IPO which will be a book built issue.300. Techpro Systems (TSL) manufactures various equipments like feeders. Page No.Techpro Systems IPO will be issued by Techpro Systems (TSL) which is engaged in taking up turnkey projects in the systems of bulk material handling. The lead arrangers of Techpro Systems IPO are SBI and Kotak. crushers. Techpro Systems (TSL) is engaged in undertaking projects of turnkey in systems bulk material handling that includes handling raw material systems for cement plants. Techpro Systems IPO will consist of 7. 77 . power. 2008. Techpro Systems IPO will be launched by the company Techpro Systems (TSL) and the total size of the issue will be worth about Rs. and steel. Techpro Systems IPO is expected to be issued in the last week of January.33% of the paid. and screens and it also sets up conveyor systems. 250 crores approximately. Techpro Systems IPO will ensure that the company will have enough funds to take up developmental work and also to expand its operations. The company has filed with SEBI its Draft Red Herring Prospectus in order to issue Techpro Systems IPO.000 equity shares and it will comprise of around 22.up post issue capital of Techpro Systems (TSL). The total size of the issue of Techpro Systems IPO will be around Rs. 250 crores approximately.

Chapter (6) Page No. 78 .

all 24 companies were able to give positive returns. • Out of 24 companies observed.41%. only 10 companies have given positive returns on the date of listing. For one month and 3 months at 184.27% and 214.41% and 289. FINDINGS • It can be observed that out of 24 companies.22%. 464. • months Market rate of return was positive for 21 companies. 11 companies had given positive return for 1 month.e. • Highest rate of return was offered by ICRA Ltd. 9 companies have given positive returns for 1 month. • For 6 months and 1 year. Page No. ICRA Ltd offered highest rate of return at 143. • For 1 year. • Only 10 companies were able to perform positive returns at the end of 1 year. • As far as 3 months & 6 months returns are concerned. • Market return indicates that. • Market return was positive for 6 months for all 24 companies. • Only 5 companies were able to give positive returns for all the periods. 15 companies have given positive returns.41%. • If date of listing is concerned then. 79 . Orbit Corporation Ltd. Gave highest return i.

Orbit Corporation Limited had highest S. at 225. 3.D. was highest for Autoline Industries Limited at 56.14. Orbit Corporation Limited was riskiest than any other scrip at 131. • Also. SUGGESTIONS • S. was lowest for Oriental Trimex Limited at 2.88 for all the periods indicating that it is less riskier than other.7 indicating that it is the riskiest than any other security for 1 month.D.39 • For 1 year.71%. Advanta India Limited has the highest S. • For 3 months. Page No.55.D.D.62. • S. 1. 2.44 • For 6 months. 80 . Orbit Corporation Limited has offered highest return for 6 month and 1 year. at 93.

 Conclusion IPO is used by a company to raise its funds. although it costs a little to a company but it gives a way to get more money for long term investments. The extra amount obtained from public may be invested in the development o f the company. Page No. 81 .

Page No. 82 .

The Hindu Business Line  Biggest IPO in India’s -Capital market History Business management article Business News Newswire  Global_IPO_Trends_2007 -Report by Ernst & Young India  IPO.sebi.wikipedia.com/india_business_information/sebi_investors_kno  whow. the free encyclopedia.indiamart.fibre2fashion. 83 .in Special Thanks to: Wikipedia.google.com/2003/03/26/stories/2003032604291800.com/business-and-financial/IPO-industry  http://www.htm http://demataccount.html  http://www.com/IPO-article  Grading of IPOs.reliancemoney.hinduonnet.htm  http://www.com  http://en. IPOs India News Market News .com/2008/01/15/learning-basic-concepts-of-ipo-india/  http://www.Bibliography  http://www.gov.org http://finance.com  http://www.Economic Times Page No.economywatch.

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