ISSUE MANAGEMENT

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Marketing, Launch and Completion of Issuance

Pre - Issue Advertisement Guidelines
Before the final issue opens, the company needs to release an advertisement in: 1. An English National Daily with wide circulation 2. One Hindi National newspaper and 3. A Regional language newspaper with wide circulation at the place where your registered office is situated. This must be in the format prescribed by SEBI for both fixed price issues, as well as book built issues. According to SEBI, the minimum number of collection centres for an issue of capital shall be: a) The four metropolitan centres situated at Mumbai, Delhi, Calcutta and Chennai. b) All such centres where the stock exchanges are located, in the region where the registered office of the company is situated, like Pune, in our case. Abridged Prospectus: An Abridged prospectus is a shorter version of the offer document. 1. It contains all the salient features. 2. It accompanies the application form of the issue. We need it because; the actual offer document is very large. Book building: It is basically a mechanism where, 1. During the period for which the IPO is open, bids are collected from investors at various prices. 2. These prices are above, or equal, to the floor price.

French Auction: Under a French Auction, all successful bidders get shares at their respective bids. Dutch Auction: Under a Dutch Auction, all successful bidders get shares at the cut-off price. Pro-rata allotment: In case of oversubscription, shares are allotted in a particular ratio; this method of allotting shares is called pro-rata allotment. According to SEBI, the Lead Merchant Banker (LMB) will be responsible for all post issue activities, 1. Until the subscribers get their share certificates (in demat form, of course) 2. Or unsuccessful bidders receive the refund of application money if they havent been allotted any shares.

Post issue activities

Finitiatives Learning India Pvt. Ltd. (FLIP), 2010. Proprietary content. Please do not misuse!

ISSUE MANAGEMENT
A QUALITY E-LEARNING PROGRAM BY WWW.LEARNWITHFLIP.COM The merchant bankers are responsible for redressal of any investors grievances. In case the issue is undersubscribed, merchant bankers ensure that underwriters honor their commitment within 60 days from date of closure of issue, and make up the deficit. Merchant bankers also release a Post issue advertisement with details about: 1. Over subscription (if any) & basis of allotment. 2. Date of dispatch of certificates to successful bidders and refund of application money, in case of oversubscription. 3. Merchant bankers also submit a post issue monitoring report, within 3 days from issue closure.(with due diligence certificate)

QIP Issue
A QIP issue, traditionally called a private placement, is an issue of shares to a select group of investors, called Qualified Institutional Buyers (QIBs) and not to the public at large. QIP Issue: Regulations 1. The minimum number of allottees for a QIP issue shall not be less than: a. Two, where the issue size is less than or equal to Rs. 250 crores; b. Five, where the issue size is greater than Rs. 250 crores, and no single allottee shall be allotted more than 50% of the issue size. 2. The aggregate of the proposed placement and all previous placements made in the same financial year, shall not exceed five times the net worth of the issuer, as per the audited balance sheet of the previous financial year. 3. The aggregate of the proposed placement and all previous placements made in the same financial year, shall not exceed five times the net worth of the issuer, as per the audited balance sheet of the previous financial year.

Rights Issue
To prevent further dilution of ownership, the company offers the fresh issue of shares to the existing shareholders first, in proportion of their holding.

Bonus Issue
A bonus issue is an issue of shares, instead of a cash dividend, to the shareholders. A lot of companies use this route, in case they do not wish to have an outflow of cash. This cash can then be reinvested for future expansion of the business.

Bonus Issue: Guidelines

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ISSUE MANAGEMENT
A QUALITY E-LEARNING PROGRAM BY WWW.LEARNWITHFLIP.COM 1. The bonus issue must apply to convertible instruments as well, in the same ratio. 2. The company must not have defaulted on any of their interest or principal payments on any loans or debentures. 3. After the issue of bonus shares, the total share capital of the company must not exceed the authorized capital. In case it does, prior approval from the Registrar of Companies is required. 4. A certificate duly signed by the issuer company and counter signed by the statutory auditor or the Company Secretary, to the effect that, all the provisions prescribed by SEBI have been complied with.

Finitiatives Learning India Pvt. Ltd. (FLIP), 2010. Proprietary content. Please do not misuse!