FINANCIAL SERVICES

POST ISSUE OBLIGATION

PRESENTED BY: SHAILLY

3rd semester
 POST-ISSUE OBLIGATION

• Post-issue Monitoring Reports

• Co-ordination with Intermediaries
• Post-issue Advertisements
• Basis of Allotment
 POST-ISSUE MONITORING REPORTS
• The due date for submitting post-issue
monitoring reports in the case of public issues by
listed/unlisted companies are:
• (a) 3-day monitoring report for book-built
portion, in the case of issue through book
building: the due date of the report would be the
third day from the date of allocation in the book-
built portion, or one day prior to the opening of
the fixed price portion, whichever is earlier,
(b) 3-day monitoring report in other cases ,including
fixed price portion of the book – built issue ; the due
date for the report would be the third day from the
date of closure of the issue ,

(C) Final post-issue monitoring report for all issues. The

due date for this report would be the third party from
the date of listing or 78 days from the date of closure of
the subscription of the issue , whichever is earlier

The post-issue monitoring report in case of rights issues

should be submitting with in the three working days
from the due dates.
Public Issues : In the case of public issues , 3-
day,78-day monitoring reports are to be submitted

3-Day Post-Issue Monitoring Report :

The due date for this report would be the third day
from the date of closure ofsubscription of the issue.

Final Post-Issue Monitoring Report :

The due date for this report would be the 78th day
from the date of closure of subscription of the issue.
Rights Issues for rights issues ,3-day and 50-day
monitoring reports are required.

3-day Post-Issue Monitoring Report : The

due date for this report would be the third day
from the date of closure of subscription of the
issue.

50-Day Post-Issue Monitoring Report : The

due date for this report would be the 50th day from
the date of closure of subscription of the issue
 CO-ORDINATION WITH INTERMEDIARIES

The post-issue lead merchant banker should maintain close

coordination with the registrars to the issue and arrange to
depute its officers to the offices of the various intermediaries at
regular intervals ,after the closure of the issue , to monitor the
flow of applicants from collecting branches of banks , processing
of the application , including those accompanied by the stock
invest ,and other matters till the basis of allotment is finalised ,
despatch of security certificates and refund orders completed
and securities listed. Any act of omission or commission on the
part of any of the intermediaries noticed during such visits
should be duly reported to the SEBI.
 UNDERWRITERS
If the issue is proposed to be closed at the earliest
date,the lead merchant banker must satisfy himself that
the issue is fully subscribed before announcing closure of
the issue. In the case there is no definite information
about subscription figures , the issue should be kept open
for the required number of days to be take care of the
underwriters interests and avoid any dispute , at a later
date , by the underwriters , with respect to their liability.
In case there is a devolvement on underwriters honour
their commitments within 60 days of the date of closure of
the issue in the case of undersubscribed issues , he should
furnish information in respect of underwriters who have
failed to meet their underwriting devolvement to the SEBI.
 BANKERS TO AN ISSUE
The Post-issue lead merchant banker should
ensure that money received pursuant to the
issue and kept in a separate bank (i.e. bankers
to an issue),as per the provisions of section
73(3) of the companies Act,1956, is released
by the bank only after the listing permission
has been obtained from all the stock
exchanges where the security was proposed
to be listed as per the offer document.
 POST-ISSUE ADVERTISEMENTS
The post-issue lead merchant banker should ensure that in
all issue advertisements giving details relating to
oversubscription , basis of allotment ; number, value and
percentage of application received ; number , value and
percentage of successful allottees ; date of completion of
despatch of refund orders ; date of despatch of
certificates and date of filing of listing application are
released within 10 days from the date of completion of
the various activities , in at least one english national
daily with a nationwide circulation.one Hindi national
paper and one regional language daily circulated in the
place where the registered office of the issuer company is
situated and
(ii) The issuer company/advisor/broker or anyother
agencies connected with the issue do not publish
any advertisement stating that the issue has been
oversubscribed or indicate or indicate investors
response to the issue , during the period when the
issue is still open for subscription by the public . An
advertisement stating that ‘the subscription to the
issue has been closed’ may be issued after the
actual closure of the issue.
 BASIS OF ALLOTMENT
In the public issue of securities , the Executive
Director/Managing Director of the designated
stock exchange along with the post-issue lead
merchant banker and the registrar to the issue
would be responsible to ensure that the basis
of allotment is finalised in a fair and proper
manner on the basis of proportionate
allotment.
PROPORTIONATE ALLOTMENT PROCEDURE

Allotment should be on proportionate basis within the specified

categories subject to a minimum allotment being equal to the
minimum application size as fixed disclosed by the issuer , as
illustrated below :

Assume 10 crore share @ Rs 600 per share are on offer . The

shares on offer for retail category are 2.5 crore share. While the
total issue is oversubscribed 4 times , the oversubscription in the
retail category are is 8.25 times . The issuer decides to fix the
minimum application/bid size as 9 shares (falling within the
range of Rs 5000- Rs 7000), that is, applications can be made for
a minimum of 9 shares and multiples.