Issue Of Equity Shares-B.V.Raghunandan


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issue procedure, various financial intermediaries in the issue of equity shares in India including book-building

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Issue Of Equity Shares-B.V.Raghunandan

  1. 1. Primary Market <br />
  2. 2. Rationale for Issue of Equity Shares<br />
  3. 3. Benefits of Issue of Shares<br />Liquidity<br />Evaluation of Securities<br />Enabling Future Funding<br />Higher Reputation<br />Better valuation of Shares<br />Take-Over of Companies<br />
  4. 4. Demerits of Issue of Shares<br />Huge Issue Expenses<br />Huge Administrative Expenses<br />Severe Regulation<br />Volatile Stock Market<br />Annual Listing Fee<br />
  5. 5. Public Issue of Equity Shares<br />1.Appointment of a Merchant Banker<br /> -Advisory Service<br /> -Preparation of Basic Documents<br /> -Appointment of other Merchant Bankers<br /> -Preparation of Other Documents : MOU and Due Diligence Certificate<br /> -Preparation and Filing of Final Prospectus<br /> -Allocation of Responsibilities<br />
  6. 6. Public Issue of Equity Shares…<br />2.Application to a Stock Exchange<br />3.Agreement with Depositories <br />4.Appointment of Underwriters<br />5.Appointment of Registrar to the Issue: Functions of Registrar<br />6.Appointment of Bankers<br />7.Appointment of Brokers<br />8.Appointment of Advertising Agencies: Statutory & Non-Statutory<br />9.Issue of Shares………..<br />
  7. 7. Issue of Shares<br />Filing Prospectus with SEBI, Registrar of Companies and Stock Exchanges<br />Convening Press Conference or Investors’ Meet<br />Despatch of Application Forms<br />Opening of Subscription List<br />Closure of Subscription List<br />Allotment of Shares<br />Listing of Shares<br />
  8. 8. Rights Issue of Equity Shares<br />Appointment of Merchant Bankers<br />Appointment of a Lead Manager<br />Appointment of Underwriters<br />Appointment of Registrar to the Issue<br />Application for Listing<br />Agreement with Depositories<br />Actual Issue<br />Listing of Shares<br />
  9. 9. Book-Building<br />A process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document.<br />-SEBI (Disclosure & Investor Protection) Guidelines 2000<br />
  10. 10. Features of Book-Building<br />Quantity Assessment<br />Price Discovery<br />A Series of Documents at Different Stages to Invite the Investors<br />QIB Portion and Public Issue Portion<br />Lead Book-Running Manager<br />
  11. 11. Rationale for Book-Building<br />Institutional Investors<br />Legal Compulsion : Issue Exceeding 5 times the pre-issue networth<br />Irrelevant Quantum of Finance<br />Shorter Process of Issue<br />
  12. 12. Financial Intermediaries<br />Merchant Banker as Lead Book-Runner<br />Co-Book Runners<br />Syndicate Members<br />Registrar to the Issue<br />Bankers to the Issue<br />
  13. 13. Merchant Banker As Book Runner<br />Facilitating Appointment of Other Book Runners<br />Facilitating Appointment of Syndicate Members<br />Circulation of Information Memorandum<br />Gathering the Input through IM<br />Filing Red Herring Prospectus with SEBI along with IM<br />Facilitating Appointment of other Fis<br />Filing Due Diligence Certificate with SEBI<br />Determination of Price Band<br />Opening & Closure of Subscription List<br />Allotment of Shares<br />Getting the Shares Listed<br />Filing Final Prospectus<br />
  14. 14. Functions of Syndicate Members<br />Facilitating Quantity Assessment<br />Underwriting<br />Collection of Bid-cum-Application Forms<br />
  15. 15. Functions of Registrar to the Issue<br />Appointment of Bankers<br />Printing & Supply of Forms<br />Allotment<br />Other Procedure<br />
  16. 16. Issue Procedure<br />A. Quantity Assessment Stage<br />B. Pre-Issue Stage<br />C. Actual Issue Stage<br />D. Allotment Stage<br />
  17. 17. Quantity Assessment Stage<br />Appointment of Financial Intermediaries<br />Preparation of Information Memorandum<br />Sending Information Memorandum<br />Determination of Quantity & Price-Band<br />Underwriting<br />
  18. 18. Pre-Issue Stage<br />
  19. 19. Actual Issue Stage<br />
  20. 20. Allotment Stage<br />
  21. 21. Merits of Book-Building<br />
  22. 22. Demerits of Book-Building<br />
  23. 23. THANK YOU<br />