Vikas Kumar

Table Content
❑ Capital Market
❑ IPO

❑ Instruments of the Capital Market

❑ Equity Securities

❑ Debt Securities

❑ Depository Receipts

❑ Money Market Instruments

❑ Securitization
CAPITAL A capital market is a financial market in which
investors buy and sell financial securities, such as
MARKET stocks and bonds.

Types of Capital Market:

1. Primary Market

2. Secondary Market
 Steps for IPO listing:

IPO Qualifications for listing Initial Public Offerings (IPO)

(Initial Public Offering) Appointment of IPO participant

Registration of documents
The process of offering shares of
a private corporation to the
public in a new stock issuance Determining the price of the shares
for the first time.

Allocation of the shares

 Top 10 Successful IPO in 2021
Stock Listing Discount Face Value Issue Price CMP Lead Managers Registrar Pricing M-Cap(in Cr)

Sigachi Industries 249.69% INR 10.00 ₹161 to ₹163 INR 287.45 Unistone Capital Pvt Ltd Bigshare Services Pvt Ltd Book Built 885.87

Paras Defence 168% INR 10.00 ₹165 to ₹175 INR 616.50 Anand Rathi Securities Limited Link Intime India Private Ltd Book Built 2410

Latent View Analytics 159.90% INR 1.00 ₹190 to ₹197 INR 356.05 Axis Capital Limited; Haitong Securities India Private Limited; ICICI Securities Limited Link Intime India Private Ltd Book Built 7210

Equirus Capital Private Limited; HDFC Bank Limited; ICICI Securities Limited; Kotak
GR Infraprojects 104.90% INR 5.00 ₹828 to ₹837 INR 1,230.00 Mahindra Capital Company Limited; Motilal Oswal Investment Advisors Pvt Ltd; SBI Capital KFin Technologies Limited Book Built 11856
Markets Limited

Tatva Chintan 95.01% INR 10.00 ₹1073 to ₹1083 INR 2,250.00 ICICI Securities Limited; JM Financial Limited Link Intime India Private Ltd Book Built 4977

Clean Science 95% INR 1.00 ₹880 to ₹900 INR 1,555.00 Axis Capital Limited; JM Financial Limited; Kotak Mahindra Capital Company Limited Link Intime India Private Ltd Book Built 16515

GoColors 89.86% INR 10.00 ₹655 to ₹690 INR 1,190.00 DAM Capital Advisors Ltd; ICICI Securities Limited; JM Financial Limited KFin Technologies Limited Book Built 6411

MTAR 85% INR 10.00 ₹574 to ₹575 INR 1,685.00 IIFL Securities Ltd; JM Financial Limited KFin Technologies Limited Book Built 5165

ICICI Securities Limited; IIFL Securities Ltd; Jefferies India Private Limited; Nomura Financial
Nazara Tech 80% INR 4.00 ₹1100 to ₹1101 INR 604.80 Link Intime India Private Ltd Book Built 3971
Advisory And Securities (India) Pvt Ltd

BofA Securities India Limited; Citigroup Global Markets India Private Limited; ICICI
Nykaa 79.38% INR 1.00 ₹ 1,085 to ₹ 1,125 INR 174.85 Link Intime India Private Ltd Book Built 49730
Securities Limited; JM Financial Limited; Morgan Stanley India Company Pvt Ltd
 Top 10 Unsuccessful IPO in 2021
M-Cap (in
Stock Listing Discount Face Value Issue Price CMP Lead Managers Registrar Pricing
Cr)

Shriram Properties 23.73% INR 10.00 ₹113 to ₹118 INR 83.60 Axis Capital Limited; ICICI Securities Limited; Nomura Financial Advisory And Securities (India) Pvt Ltd KFin Technologies Limited Book Built 1416

IIFL Securities Ltd; Kotak Mahindra Capital Company Limited; Nomura Financial Advisory And Securities (India) Pvt
RateGain Travel 15.29% INR 1.00 ₹405 to ₹425 INR 301.95 KFin Technologies Limited Book Built 3265
Ltd

Axis Capital Limited; ICICI Securities Limited; BOB Capital Markets Limited; Citigroup Global Markets India Private
Kalyan Jewellers 15% INR 10.00 ₹86 to ₹87 INR 111.60 Link Intime India Private Ltd Book Built 11397
Limited; SBI Capital Markets Limited

Axis Capital Limited; HSBC Securities & Capital Markets Pvt Ltd; ICICI Securities Limited; J.P. Morgan India Private
Nuvoco Vistas 14.91% INR 10.00 ₹560 to ₹570 INR 404.00 Link Intime India Private Ltd Book Built 14439
Limited; SBI Capital Markets Limited

Ambit Private Limited; Axis Capital Limited; DAM Capital Advisors Ltd; Equirus Capital Private Limited; ICICI
Metro Brands 12.60% INR 5.00 ₹485 to ₹500 INR 839.00 Link Intime India Private Ltd Book Built 22645
Securities Limited; Motilal Oswal Investment Advisors Pvt Ltd

Axis Capital Limited; BOB Capital Markets Limited; Edelweiss Financial Services Ltd; ICICI Securities Limited; IIFL
Macrotech developers 10.29% INR 10.00 ₹483 to ₹486 INR 1,060.00 Securities Ltd; J.P. Morgan India Private Limited; JM Financial Limited; Kotak Mahindra Capital Company Limited; Link Intime India Private Ltd Book Built 50891
SBI Capital Markets Limited; Yes Securities (India) Limited

Axis Capital Limited; Citigroup Global Markets India Private Limited; Goldman Sachs (India) Securities Private
Paytm 9.30% INR 1.00 ₹2080 to ₹2150 INR 544.75 Limited; HDFC Bank Limited; ICICI Securities Limited; J.P. Morgan India Private Limited; Morgan Stanley India Link Intime India Private Ltd Book Built 35362
Company Pvt Ltd

Craftsman Automation 9.00% INR 5.00 ₹1488 to ₹1490 INR 3,277.00 Axis Capital Limited; IIFL Securities Ltd Link Intime India Private Ltd Book Built 6952

Ambit Private Limited; Axis Capital Limited; BofA Securities India Limited; Citigroup Global Markets India Private
Limited; CLSA India Private Limited; Credit Suisse Securities (India) Private Limited; DAM Capital Advisors Ltd; ICICI
Star Health 6.11% INR 10.00 ₹870 to ₹900 INR 599.90 KFin Technologies Limited Book Built 34802
Securities Limited; IIFL Securities Ltd; Jefferies India Private Limited; Kotak Mahindra Capital Company Limited; SBI
Capital Markets Limited

Axis Capital Limited; CLSA India Private Limited; ICICI Securities Limited; Nomura Financial Advisory And Securities
Fino Payments Bank 5.72% INR 10.00 ₹560 to ₹577 INR 229.70 KFin Technologies Limited Book Built 1909
(India) Pvt Ltd
 1. Equity Securities
a) Common Stocks
b) Preferred Stocks

2. Debt Securities
a) Bonds
b) Depository Receipt

Instruments c) Money market instrument

3. Derivatives
of the Capital a)
b)
Options
Futures

Market c)
d)
Forward
Swaps
 Common Stocks Preferred Stocks

• Ownership of a • A company equity

company equity ownership.

• Tradable on open • Tradable on open

Equity market market
Securities
• Frequently has capital • Usually do not
appreciation and experience as much
capital depreciation capital growth

• Has typical voting rights • Has rarely any voting

rights
Debt Securities
Types of Bonds:
Corporate bond: A corporate bond is
a bond issued by a corporation in
order to raise financing for a variety
of reasons such as to ongoing
operations, M&A, or to expand
business. The term is usually applied
to longer-term debt instruments.
Zero-coupon bond: Bonds that do
not pay interest during the life of the
Government bonds: A government
bonds. Instead, investors buy zero
bond is a debt security issued by a
coupon bonds at a deep discount
government to support government
from their face value, which is the
spending and obligations. They are
amount the investor will receive
considered low risk investments.
when the bond "matures" or comes
due.

Convertible bond: A convertible

bond can be described as corporate
hybrid debt security that features Foreign bond: It’s a bond issued in a
both debt and equity components. A domestic market by a foreign entity
convertible bond allows the in the domestic market's currency as
purchaser a right or an obligation to a means of raising capital.
convert the bond of issuing company
into shares
Euro Bond: A Eurobond is a
debt instrument that's
denominated in a currency
other than the home
currency of the country or
market in which it is issued.
Inflation linked bonds: These
are fixed interest securities
where the coupon payments
increase and decrease with
changes in official inflation
rates.
Junk Bond: It’s also known as
high-yield bonds, are bonds
that are rated below
investment grade by the big
rating agencies. Carry a
higher risk of default.

Puttable Bond: It’s a debt

Callable Bond: It’s a debt Perpetual Bond: It’s a rare
instrument that allows the
security that can be type of bond that offers
bondholder to force the
redeemed early by the issuer regular interest payments
issuer to repurchase the
before its maturity at the indefinitely but doesn’t have
security at specified dates
issuer's discretion. a maturity date.
before maturity.

Deferred Bond: It’s a debt

instrument that pays all its
interest that has accrued in
the form of a single payment
made later rather than in
periodic increments.
 Depositary Receipt
A depositary receipt is a Types of Depositary Receipts
negotiable instrument
issued by a bank to 1.
represent shares in a
foreign public company,
which allows investors to
trade in the global
markets. DRs make it 2.
possible for a company
(the issuer) to access
investors in capital 3.
markets beyond the
borders of its own
country.
American Depositary Receipt (ADR): An American depositary receipt (ADR) is a U.S. bank-issued certificate
representing shares in a foreign company for trade on American stock exchanges.
i. Example: https://www.sec.gov/Archives/edgar/data/1067491/000089161803001621/f87135a2fv3za.htm
European Depositary Receipt (EDR): A European depositary receipt (EDR) is a negotiable security issued by a
European bank that represents the public security of a non-European company and trades on local exchanges.
Global Depositary Receipt (GDR): A global depositary receipt (GDR) is a negotiable financial instrument issued by a
depositary bank. It represents shares in a foreign company and trades on the local stock exchanges in investors'
countries.
i. Example: https://fintel.io/doc/sec-honda-motor-co-ltd-ex99-a-6-2016-august-08-18563-63
Sponsored and Unsponsored
Depositary Receipts

A Sponsored DR, as the name implies, An Unsponsored DR is created by a depository bank

is one that’s “sponsored” by the without the cooperation or participation of the non-
company, whereby the foreign local company.
company works with a local depository
• Often not liquid
bank, which:
• Creates the DR • Only trade Over the Counter (not traded
through an exchange)
• Handles record-keeping
• Forwards communications to • No dividends
shareholders
• Pays dividends
• Provides other services
 1. Treasury Bills: It is issued by the Government as a promissory
note with guaranteed repayment later. They are issued at a
discount to the published nominal value of government

Money Market security. 14-day, 91-day, 182-day, 364-day are treasury bills
issued by GOI.
2. Commercial Bills: It works more like the bill of exchange.

Instruments Businesses issue them to meet their short- term money

requirements.
3. Certificate of Deposit: It is a savings product that earns interest
on a lump sum for a fixed period.
4. Commercial Paper: Corporates issue CP to meet their short-
term working capital requirements. Hence serves as an
alternative to borrowing from a bank. Also, the period of
commercial paper ranges from 15 days to 1 year.
5. Interbank Lending: It is a market in which banks extend loans to
Money market instruments are financial one another for a specified term.
instruments that help companies, corporations, a) Call money (1 Day)
and government bodies to raise short-term b) Overnight
debt for their needs. c) Notice Money (1 – 14 days)
d) Term Money (14 – 365 days)
e) Weekend Money (Friday – Monday)
f) Intraday Money (Time Specific)
 • Treasury Bills:
https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid
=54835

Money • Commercial Paper:

https://nsdl.co.in/downloadables/commercial-
Market papers/2019/IPA/INE403G14QH908122022IPACERTIFICATE_
CP8420.pdf

Instruments • Certificate of Deposits:

https://nsdl.co.in/downloadables/excel/cp-
debt/Certificate%20of%20Deposit%20Issuance%20in%20th
e%20month%20of%20August%20%202021.html

• Interbank Lending Rates:

https://rbi.org.in/Scripts/BS_ViewMMO.aspx
 The process in which certain types of assets are pooled and engineered into
marketable instrument.

Securitization Common Securitized Debt Instruments:

1. Mortgage-backed Securities (MBS): Mortgage-backed securities (MBS) are bonds that

are secured by homes or real estate loans.

2. Asset-backed Securities (ABS): These are bonds that are created from consumer
debt. When consumers borrow money from the bank to fund a new car,
student loan or credit cards, the loans become assets in the books of the
entity (usually a bank) that is offering them this credit.

3. Tranche: Tranches are segments created from a pool of securities—usually debt

instruments such as bonds or mortgages—that are divvied up by risk, time to maturity,
or other characteristics in order to be marketable to different investors.
i. Senior Tranche: Highest grade rating
ii. Mezzanine Tranche: Average grade rating
iii. Junior tranche: Poor grade rating