Professional Documents
Culture Documents
A. Credit Rating
Not below investment grade form not less than two agencies.
Not in the list of willful defaulters RBI.
Not in default of payment of interest > 6 months.
No allotment of Non Convertible Debentures through public issue if allottees are less
than fifty (50).
Refund within 8 days any delay beyond this, interest @ 15%.
B. IPO Grading
Grading for IPO from at least one credit rating agency.
Disclosure of grades obtained
Expenses for grading of IPO to be borne by the Company.
C. Others
No outstanding warrants (financial instruments to be entitled for equity share post IPO)
No partly paid up shares (existing)
Means of finance to be tied up at least 75% of total financing.
Pricing of Issues
A. Pricing of Issue
• Free pricing allowed in respect of Public/Rights, Infrastructure Company, IPO by
Banks
• Differential pricing
1. Firm Allotment category v/s public Firm Allotment price must be higher than
public
2. Rights cum public offer
3. Justification of the price to be disclosed.
B. Price Band
- Price band of 20% i.e. cap price not more than 20% of the floor price
- Price fixation through Board Resolution
- In case of listed companies 48 hours notice to the Designated Stock Exchange
for passing resolution for determination of price
- Draft prospectus stage , price or price band need not be disclosed.
C. Discount/Commission
Not allowed to those who received firm allotment.
Freedom to determine denomination
(i) If issue price more than `500 /- share face value can be
below `10/- subject to minimum of `1/-
(ii) If issue price not more than `500/- share face value shall be
`10/-
Promoters’ Contribution & Lock in of shares
• Draft offer document filed with Board shall be made public for a period of atleast
21 days from the date of filing of the document.
• Hosting of draft and final offer document on the website of lead
managers/syndicate members, website of Exchange and SEBI.
• Filing of offer document with the Stock Exchange where the securities are
proposed to be listed.
• Obtain and furnish to the Board an ‘in principle’ approval of Stock Exchanges
within 15 days of filing draft document with Exchanges
• Pre-issue Advertisement.
• Issuer company soon after receiving final observation on the offer document
from the Board make an advertisement in:
-One English National Daily with wide circulation
-One Hindi National Daily with wide circulation
-One regional language newspaper with wide circulation at place of registered
office of company.
• IPO Grading
Grade obtained along with rationale description must be disclosed in the
prospectus, issue advertisement and all other places where issuer company is
advertising for IPO.
• Despatch of issue material
Public issue offer document, other issue materials including forms for ASBA are
dispatched to various stock exchanges, bankers underwriters, Bankers to the
issue, Investors’ association and Self Certified Syndicate Banks.
In case of rights issue merchant banker shall ensure that letter of offers are
dispatched to all shareholders at least one week before the date of opening of
the issue.
• No complaint certificate
After a period of 21 days from the date of offer document was made public Lead
Merchant Banker shall file statement with the Board.
List of complaint
Statement by it whether it is proposed to amend the draft offer document.
Collection Centres
• Mandatory collection centre
(Minimum number of collection centres for an issue of capital shall be)
Four metropolitan centres situated at Mumbai, Delhi, Kolkata, Chennai
AllRegion
such centres where the stock exchanges are located in the region in which
Exchanges
the registered office of the company is situated (Schedule VII
Northern Ludhiana, Delhi, Jaipur, UP
Industry segment for which the issue is proposed has contributed 25% of
revenue in last 3 years
Dependence on business upon specific segment or single customer or few
customers
If listing of any securities of the issuer, subsidiaries or associates has been
refused at any time by any stock exchange in India/abroad to be disclosed
with reasons
Penalties imposed by SEBI
If issuer/subsidiary/group/associate has failed to meet listing
requirements
Outstanding debentures/bonds with default compliance either in the form
of security creation/interest/redemption
Default in payment of deposit or any liability. Even if liability is rolled over
the fact of rollover shall be disclosed
If promoters / directors are involved with one or more ventures with same
line of activity, potential conflict of business to be disclosed.
Risk factors (contd ..…)
Net worth before issue (as per audited statement) and issue size
cost per share to promoters and book value per share
Interest of promoters / directors / key management personnel other than
reimbursement of expenses incurred and normal remuneration
If issuer company transacted with group / subsidiary companies during
the year; the nature of transaction and its cumulative values.
Related party disclosures
Loans/advances made to any person or company in which Directors are
interested.
Introduction
• Tax benefits to cover provisions Income tax Act, Capital gains and other
special provisions
• Corporate profile
• Milestones and achievements in the past (chronological order)
• Other details like PAN, bank account, passport details
• Whether promoters are companies , similar details as above
as well as financial details and shareholding pattern
• Currency presentation ( one standard financial unit through
out the prospectus to be disclosed)
• Dividend policy of the company
Financial Statements
• Financial statements of the issuer company to be disclosed
• Report by the auditors must cover :
- Profit & loss account , Statement of assets & liabilities & cash flow for
last five full years (latest being not later than 6 months preceding the date of prospectus)
- Rate of Dividend
- in case of issuer company having subsidiaries, consolidated statement as
well as individual statements for each of the subsidiaries
- principal terms of loans and assets charged as security
- all significant accounting policies
- break up of turnover in terms of products manufactured and traded
- other income details if it exceeds 20% of Profit before taxes
- accounting and other ratios with definitions
- capitalisation statement
- unsecured loans
• Changes in accounting policies in last three years
Management Discussion and Analysis
• Overview of the business of the company
• Significant development subsequent to the last financial year
• Factors that may materially affect results of operations
• Discussion on results of operations
• Comparison of recent financial years (last 3 years) inter alia following:
- unusual and infrequent events
- significant economic changes
- extent of material increase in net sales due to increased volume,
introduction of new products
- extent to which the business is seasonal
- significant dependence on single or few suppliers / customers
- competitive conditions
Legal & other information
• Pending litigations & material Developments
• Govt approvals/ licensing arrangements
- investment approvals (FIPB/ FDI)
- technical approvals
• Other regulatory & statutory disclosures
- authority for issue and details of resolution
- prohibition by SEBI
- eligibility of the issuer company
• Disclaimer Clauses ( SEBI, Stock exchanges , RBI –if applicable , grading agency)
• Listing (Names of exchanges where securities are proposed to be listed)
• Consent of directors , auditors, solicitors, Managers to the issue, registrars, bankers to the
issue and experts)
• Expenses of the issue
• Details of the fees payable to intermediaries, underwriting commission , brokerage
• Details of previous rights / public issue
• Details of other listed companies under same management
• Stock market data
Offering information
3. Offer for sale by listed No provision. Provided for and defined as follows: Further
companies public offer means an offer of specified
securities by a listed issuer to the
public for subscription and includes an offer for
sale of specified securities to the public by any
existing holders of such securities in a listed
issuer