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Case study on issues related to primary market

Types of Issues
Primary Subsequent Bonus Right Buyback

Primary Issue
Primary issue is also known as Initial Public Offer(IPO) When an unlisted company makes either a fresh issue of securities or offers its existing securities for sale or both for the first time to the public, it is called an IPO. This paves way for listing and trading of the issuers securities in the Stock Exchanges.

TCS
Issue Open Date 29/07/2004 Issue Close Date05/08/2004 Listing Date25/08/2004 Face Value (Rs).1.00 Offer Price/Range (Rs).0.00-0.00 Issued at (Value)Premium(849.00) Issue Size(Retail)49907340.00Shares@850.00/share Issue Type Public Issue

Birla Pacific Medspa Ltd


The price band of Birla Pacific Medspa Ltds Initial Public Offering (IPO) of Rs 65 crore has been fixed at Rs 10-11 a share. The issue opens on June 20 and closes on June 23. The promoters stake post the issue would be 41 per cent. The company plans to utilise the IPO proceeds on brand promotion and working capital and more importantly to establish 55 outlets of Evolve Medspa across various cities in India. The issue has been assigned BWR IPO Grade 2 by Brickworks Rating India indicating below average fundamentals. Arihant Capital Markets Ltd is the Book Running Lead Manager (BRLM) and Adroit Corporate Services is the registrar to the issue.

Subsequent Issue
Subsequent issue is also known as Further Public Offer(FPO) When an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, it is called a FPO.

ONGC
ONGCs much anticipated follow-on public offer may come by the second week of March, by which time the state-run explorer expects to settle the royalty issue with Cairn India and have clarity in the subsidy regime, Chairman and Managing Director R S Sharma said today. At the current market capitalisation of about Rs 2.7 lakh crore, a 5 per cent divestment by the government will make it an Rs 13,000-crore issue, he told reporters on the sidelines of a conference here. He further said the company will be meeting investment bankers later this month for the issue.

Bonus Issue
When an issuer makes an issue of securities to its existing shareholders as on a record date, without any consideration from them, it is called a bonus issue. The shares are issued out of the Companys free reserve or share premium account in a particular ratio to the number of securities held on a record date.

CUMMINS INDIA
Cummins India, one of the leading manufacturers of diesel and natural gas engines, has fixed September 21 as a record date for the purpose of issuing fully paid bonus equity shares in the ratio of 2:5. The shareholders will get two additional shares for every 5 shares held. Cummins India is a subsidiary of Cummins Inc. The company entered the country in 1962 in a joint venture with Kirloskar. In 1997, Kirloskar sold its stake and Cummins India increased its holding to 51%.

Right Issue
When an issue of securities is made by an issuer to its shareholders existing as on a particular date fixed by the issuer (i.e. record date), it is called an rights issue. The rights are offered in a particular ratio to the number of securities held as on the record date.

Bajaj Hindusthan
Bajaj Hindusthan is trading nearly 4% higher at Rs 55.5 on the Bombay Stock Exchange (BSE) after the company fixed September 22 as the record date for its Rights Issue. The Board of Directors of the Company at its meeting held on September 12, 2011 approved Rs 36 per share as issue price and fixed September 22, 2011 as Record Date for the Purpose of deciding the shareholders who are eligible to apply for Equity Shares on Right basis in the proposed issue on Right Basis to the existing Shareholders of the Company.

Buyback
The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

Abbott India
The buy-back price of Rs 630 a share represents a close to 15% premium to the ruling market price. Abbott India, in an announcement made after market hours yesterday, 9 July 2008 said that the public announcement setting out the timeline for the buyback and other statutory details will be released in due course in accordance with the Securities and exchange board of India (Sebi) (Buyback of Securities) Regulations, 1998. The meeting of the buy-back committee of the board of directors of the company was held yesterday, 9 July 2008