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• Public issue
– Initial Public offer (IPO) – Further public offer (FPO)/Seasoned Equity Offering (SEO)
• Rights issue • Bonus issue • Private placement
– Preferential issue – Qualified institutional placement (QIP)
IPO - TRENDS
INITIAL PUBLIC OFFERINGS
75,000 70,000 65,000 100 60,000 55,000 50,000 45,000 40,000 60 35,000 30,000 25,000 20,000 15,000 20 10,000 5,000 10 50 40 30 90 80 70 120 110
2000 2001 2002 2003 2004 2005 Value 2006 Nos 2007 2008 2009 2010 2011
• Company should not be barred/prohibited from accessing capital markets by SEBI • Net Tangible Assets of at least Rs. 3 crores in each of the preceding three full years. • Not more than 50% of this should be held in monetary assets • Distributable profits in atleast 3 of the immediately preceding 5 years. • Net worth of at least Rs. 1 crore in each of the preceding three full years.
with at least 50% of net offer to public) being allotted to the QIBs OR the “project” has at least 15% participation by FIs/SCBs AND – The minimum post-issue face value capital of the company shall be Rs.IPO-ISSUER ELIGIBILITY • If the company has changed its name within the last 1 year. • The issue size does not exceed 5 times the pre‐ issue net worth as per the audited balance sheet of the last FY. • Otherwise an IPO may be made only if – – The issue is made through the book-building process. 10 crores. OR There shall be a compulsory market-making for at least 2 years from the date of listing . atleast 50% revenue for the preceding 1 year should be from the activity suggested by the new name.
issue observations or specify changes . • Issuer must have an agreement with atleast one depository for dematerialisation of securities being offered. • SEBI can seek clarifications.OTHER MANDATORY CONDITIONS • Issuer must make an application for listing of the securities being offered on atleast one stock exchange having nationwide trading terminals. • Draft prospectus to be filed with SEBI atleast 30 days prior to filing with RoC/Stock Exchange.
.OTHER MANDATORY CONDITIONS • Copy of in-principle approval from all stock exchanges where securities to be offered are intended to be listed • No partly paid shares outstanding on date of issue. • No outstanding instruments which would entitle the existing promoters or shareholders to any option to receive shares after the IPO. • No payment by company or promoters to persons who have been allotted shares • Promoters should contribute not less than 20% of the post issue capital.
• Promoters’ contribution locked in for 3 years. . • Issuer must obtain an IPO Grade from at least one CRA • Mandatory disclosure in the Prospectus of all IPO Grades so obtained alongwith rationale furnished by the CRA for each of the grades obtained.OTHER MANDATORY CONDITIONS • Promoters to bring in entire amount atleast 1 day prior to issue opening date. • Draft offer document to be made public for 21 days from date of filing with SEBI.
.OTHER MANDATORY CONDITIONS • IPO grading can be done either before filing the draft offer documents with SEBI or thereafter • Factors considered in an IPO Grading – – – – – – – Business Prospects and Competitive Position Financial Position Management Quality Corporate Governance Practices Compliance and Litigation History New Projects—Risks and Prospects • Grading is done without taking into account the price at which the security is offered in the IPO.
PRICING • Era of free pricing since 1992. . • Shares to applicants of firm allotment category may be issued at a price higher than the price at which shares are offered to public. Return on Net Worth and comparison of these with peer group companies. • Shares to retail individual investors can be offered at a discount of maximum 10% to the price at which the shares are offered to other categories of public. PE multiple. • EPS. • Issuer decides price in consultation with merchant banker.
. • Spread between the cap and floor of the price band should not be more than 20%. • Issue to be kept open for atleast 3-7 working days. • After the bidding process is complete. the ‘cut‐off’ price is arrived at based on the demand of securities.PRICING • Issue may be Fixed Price issue or Book Built issue. • Book building is a process of price discovery. • The price band is a band of price within which investors can bid. • Revision of bid quantity or price is allowed.
• Risk Factors – Internal & External Risks. Measures to counter risk – Forward looking statements . number. price and amount of instruments offered and issue size – Particulars regarding listing. lead managers and registrars – The nature. IPO Grading.OFFER DOCUMENT/PROSPECTUS • Cover Page – Full contact details of the Issuer Company. – Credit Rating.
bankers. Business of the company Summary financials Merchant bankers. underwriters etc Capital structure details Object of the fund raising Implementation plan Terms of issue Rationale for pricing Tax benefits .OFFER DOCUMENT/PROSPECTUS • Introduction – – – – – – – – – – Industry Background. brokers.
OFFER DOCUMENT/PROSPECTUS • About Us – – – – – – – – – – Business Strategy Competitive strengths Insurance Industry Regulation History & Corporate structure Main objects Experience of promoters Management & Board of Directors Compensation Corporate Governance .
OFFER DOCUMENT/PROSPECTUS • Financial Statements – Audited financial statements as per Indian as well as US GAAP/IFRS. reconciliation statement • Legal Information – – Any pending litigation – Licensing requirements – Investment approvals • Other Statutory Disclosures .
OFFER DOCUMENT/PROSPECTUS • Offering Information – – – – – – – – – Ranking of equity shares Face value & issue price Issue procedure Nomination facility Allotment Payment instructions Basis of allotment & refunds Dividend Payments • Other Information .
investors other than retail individual investors and QIB • Not more than 50% of the net offer to the public shall be available for allocation to Qualified Institutional Buyers .e.ALLOTTMENT • Investors are classified under following categories‐: – Retail individual Investor (RIIs) – Non‐Institutional Investors (NIIs) – Qualified Institutional Buyers (QIBs) • Not less than 35% of the net offer to the public shall be available for allocation to retail individual investors. • Not less than 15% of the net offer to the public shall be available for allocation to non‐institutional investors i.
• Oversubscription ratios are calculated for each of the categories as against the shares reserved for each of the categories in the offer document. • Allotment of shares is on a proportionate basis within the respective categories. • Listing within 3 weeks after closure of issue. • Allotment within 15 days of closure of issue. .ALLOTTMENT • Demat compulsory.
00 .106.00 113.00 .118.00 .32.Scrip Start Date End Date Offer Price () Bharti Infratel Limited Speciality Restaurants Limited Samvardhana Motherson Finance Ltd Tribhovandas Bhimji Zaveri Limited National Buildings Construction Corporation Limited Olympic Cards Ltd Multi Commodity Exchange of India Ltd 11/12/2012 14/12/2012 16/05/2012 18/05/2012 2/5/2012 4/5/2012 210.00 146.00 .155.00 .00 24/04/2012 26/04/2012 22/03/2012 27/03/2012 9/3/2012 13/03/2012 22/02/2012 24/02/2012 860.240.00 120.00 .00 .00 30.00 .1032.126.00 90.
000 28.000 8.52 29.250 Subscription Rate 18.243.000 Bid 12.Category RII NII Offered 66.115.700 284.25 .000 187.928.335.115.320.36 QIB 66.
• The maximum number of shares that may be so borrowed cannot exceed 15% of the total issue size. • The company shall appoint one of the merchant bankers from amongst the issue management team. should also authorize the possibility of allotment of further shares to the (SA) at the end of the stabilization period. • General meeting authorizing the public issue. • The SA shall also enter into an agreement with the promoters or pre-issue shareholders who will lend their shares. who will be responsible for the price stabilization process.GREEN SHOE OPTION • GSO for stabilizing the post listing price of shares. . as the “stabilizing agent” (SA).
GREEN SHOE OPTION • Lead merchant banker shall determine the amount of shares to be overallotted with the public issue. . which shall not exceed 30 days from the date when trading permission was given by the exchange(s). • A separate demat account and bank account will be opened for GSO shares & proceeds. subject to the maximum that can be the shares borrowed from promoters. • The allocation of these shares shall be pro-rata to all the applicants • The stabilization mechanism shall be available for the period disclosed by the company in the prospectus.
GREEN SHOE OPTION • The shares bought from the market and lying in the GSO Demat Account shall be returned to the promoters not later than 2 working days after the close of the stabilization period. the issuer company shall allot shares to the extent of the shortfall within 5 days of the closure of the stabilization period. the price at which the shares are to be bought etc. in case the SA does not buy shares to the extent of shares over-allotted by the company from the market. the SA shall determine the timing of buying the shares. • The prime responsibility of the SA shall be to stabilize post listing price of the shares. • On expiry of the stabilization period. For this. . These shares shall be returned to the promoters by the SA in lieu of the shares borrowed from them. the quantity to be bought.
and give an order number/order confirmation slip to the applicant. DP code etc. • After finalisation of basis of allocation The Exchange shall process and generate the broker-wise funds pay-in obligation and shall send the file containing the allocation details to member brokers. enter the buy order in the system. beneficiary ID. telephone number and category of the applicant. on behalf of the clients and enter details including the name. the number of shares applied for.e-IPO • The broker shall collect the client registration form duly filled up and signed alongwith documents as per "KYC norm” • The broker shall. • The broker may collect an amount to the extent of 100% of the application money as margin money from the clients before he places an order on their behalf. address. thereafter. .
shall bring in the funds to the extent of the client’s default. • In the event of the successful applicants failing to pay the application money. to the exchange. which shall submit the same to the Registrar to Issue/company for their records.e-IPO • On receipt of the basis of allocation data. the broker through whom such client placed orders. . thereafter. the brokers shall immediately intimate the fact of allocation to their client /applicant. hand over the application forms of the successful applicants who have paid the application money. The broker shall ensure that each successful client/applicant submits the duly filled-in and signed application form to him along with the amount payable towards the application money. • The broker shall.
the company shall allot the shares to the applicants. Shares will be credited to their demat accounts.e-IPO • On receipt of the sum payable on application for the amount towards minimum subscription. .
. • In case there is a change in the the name of the issuer company within the last 1 year the revenue accounted for by the activity suggested by the new name is not less than 50% of its total revenue in the preceding 1 full-year period.Follow on Public Offer • The aggregate of the proposed issue and all other issues in the same financial year must not exceed 5 times pre-issue networth as per audited financial statements of last FY.
.ADR/GDR 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 USD Mn.
• DRs are traded on listed and traded on Stock Exchanges in the US & other overseas capital markets.ADR/GDR • Depository Receipts (DRs) are negotiable securities issued outside India by a Depository bank. . on behalf of an Indian company. 1993 and guidelines issued by the Government of India thereunder from time to time. • In the Indian context. DRs are treated as FDI. • Scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme. which represent the local Rupee denominated equity shares of the company held as deposit by a Custodian bank in India.
ADR/GDR • Unlisted companies. the Indian company can invest the funds. • There is no monetary limit up to which an Indian company can raise ADRs / GDRs. while seeking to issue such overseas instruments. would require prior or simultaneous listing in the domestic market. • The proceeds so raised have to be kept abroad till actually required in India. which have not yet accessed the ADR/GDR route for raising capital in the international market. Pending repatriation or utilisation of the proceeds. . • There are no end-use restrictions except for a ban on deployment/investment of such funds in real estate or the stock market.
.ADR/GDR • The pricing of ADR / GDR issues should be made at a price not less than the higher of the following two averages: – The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the 2 months preceding the relevant date. • The "relevant date" means the date when the BoD of the issuer passes a resolution authorizing the issue. – The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange during the 2 weeks preceding the relevant date.
DVR SHARES • • • • • Authorized by Articles Approval of shareholders in general meeting Distributable profits in 3 preceding financial years No defaults in compliance with regulations DVR shares not to exceed 25% of total share capital issued Pantaloon Retail DVR .Additional 5% Dividends.DVR – 177/- . Equity – 260/. 10 Shares= 1 Vote.
market capitalization (during the last 3 years) in its parent country of at least US$ 100 mn • a continuous trading record or history on a stock exchange in its parent country for at least 3 immediately preceding years • track record of distributable profits for at least 3 out of immediately preceding 5 years • Min issue size of INR 50 crs.IDR Foreign issuing company shall have ‐: • pre‐issue paid‐up capital and free reserves of at least US$ 50 million • Min. Avg. .
final with ROC.000 • Atleast 50% of issue for QIB & balance for non institutional. . • Can be converted to equity shares after expiry of 1 year from date of issue. • Subscriber can be purchased by any person resident in India (FEMA) • Min.IDR • Draft prospectus to be filed with SEBI. application of INR 20.
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