India’s Inflation Rate for Jul 2010

Inflation rate (Based on Wholesale

Price Index) jumped to 9.97 per
cent for the month of Jul 2010 as
compare to 10.55 per cent (Jun
2010) on month over month basis.
Note: Inflation rate updates second
week of every month and last
updated on Mon, Aug 16, 2010.
 CREDIT RATING AGENCIES

CRISIL-Credit Rating and Information

Services of India Ltd. (CRISIL)
ICRA-India / Information and Credit
Rating Agency
CARE-Credit Analysis & Research Ltd.
Public Sector Undertaking (PSU)
FOREX

MEANING: The foreign exchange

market is a market where foreign
currencies are bought and sold.
Ex:if an Indian importer imports goods
from USA and has to make payments
in US dollars
A FOREX market helps business convert one
currency to another.
The purpose of FOREX is to help international
trade and investment.
In a typical foreign exchange transaction a
party purchases a quantity of one currency by
paying a quantity of another currency.
The foreign exchange market started forming
during the 1970s
Trading Characteristics

It is called as the over counter market (OTC)

There is no single unified foreign exchange
market

There are rather a number of interconnected

marketplaces ,where different currency
instruments are traded.

The main trading centers are in London,

Newyork,Tokyo,Hongkong,Singapore,but banks
throughout the world participate
Capital Market

The capital market is the market for

securities, where companies and
governments can raise long term funds.
It is a market in which money is lent for
periods longer than a year.
It consist of:
Primary Market
Secondary Market
 Primary Market
The primary market is that part of the capital market that
deals with the issuance of new securities.
Companies, governments or public sector institutions
can obtain funding through the sale of a new stock or
bond issue.
Include all types of securities being sold for the first
time.
After being offered in primary market it becomes the
part of secondary market.

Primary offer consists of :

IPO (initial public offering) :-where unlisted company is
selling the securities to the public for the first time.
FPO (follow on public offering) :-new offering of the
listed company that have sold securities before.
 Features of primary markets
This is the market for new long term capital. Therefore it
is also called the new issue market (NIM).
In a primary issue, the securities are issued by the
company directly to investors.
The company receives the money and issues new
security certificates to the investors.
Primary issues are used by companies for the purpose
of setting up new business or for expanding or
modernizing the existing business.
The primary market performs the crucial function of
facilitating capital formation in the economy.
The new issue market does not include certain other
sources of new long term external finance, such as
loans , debts etc
Secondary market

The secondary markets are where existing securities

are sold and bought from one investor or speculator to
another, usually on an exchange.
Also
Secondary market is the market where stocks are
traded after they are initially offered to the investor in
primary market (IPO's etc.) and get listed to stock
exchange. Secondary market comprises of equity
markets and the debt markets.

Secondary market is a platform to trade listed equities,

while Primary market is the way for companies to enter
in to secondary market
Placement of Issue

Offer through prospectus

Offer for sale
Private placement
Book building
Right issue
Offer through prospectus

Invites offer for subscription or purchase of any share…

The salient feature of prospectus are:

General information of company
Capital structure of company
Terms of the present issue
Particulars of the issue
Company management and project
Details of the outstanding litigations
Management perception of risk factors
Justification of the issue premium
Cost of project, projected earning
Offer for sale

Promoter places his share with an

investment banker who offer it to the
public at later date.
Hold on period is 70 to year
Bought out dealer decide the price
after analyzing the viability and future
projections
Bought out dealer sheds the share at
the premium to the public
Private placement

Small number of financial intermediaries like

unit trust of India, mutual funds, insurance
companies purchase the shares and sell them
to the investor at later at suitable prices.

Advantages:
Cost effective
Time effective
Access effective
Structure effectiveness
Right issue
Offers shares at the first to existing share holder.
In proportion to the share held by them at time of offer.
Offered at advantageous rate compared to the market.

Certain conditions:
A notice should be issued to specify the number of
shares issued
The time given to accept should not be less than 15
days
Right of share holder to renounce the offer in favor of
other
Book building

Process of price discovery.

Not a fixed priced for its shares.
Indicate a price band which give highest
(the cap price) and lowest (the floor) prices
The spread between floor and cap of the price
band should not be more than 20%.
The cap should not be more than 120% of the
floor.
The price is finalized by the book runner
and issuer
Intermediaries to issue
Underwriter to the issue.

Lead Managers.

Registrar to the issue.

Financial Institutions

Advertising agencies

Government agencies
Lead Manager

Appointed by the company to manage public

issue program
He should posses valid SEBI registration
Main duties:
Drafting of Prospectus.
Preparing Budget of expenses related to
issue.
Suggesting appropriate timings of the issue.
Assisting in marketing of the public issue.
Advising the company in appointing
registrars , underwriter , brokers,
advertising
agency , bankers etc
 Registrar

Finalizes the list of eligible allotees

after deleting the invalid application.
Action for crediting the shares to
demat account of applicants.
Dispatch of refund order to those
applicable.
Receive the share application from
various collection centre.
Arrange for dispatching of shares
certificate
Bankers to the issue

Ensure that funds are collected

and transferred to escrow
accounts.
Estimate of collection and
advising the issuer about the
closer of the issue.
Underwriters

Underwriting means they will subscribe to the

balance share if all share are not picked up at
IPO.
Can be a banker ,broker or financial
institutions.
Done for a commission.

Aspect considered before appointing:

Reputation.
Network of investor Clientele
Past performance
Experience
THANK YOU.