This PPT describes everything about IPO's and their regulations. It highlights the key part of an ipo prospectus i.e Disclosures. We have critically analysed 15 disclosures along with SEBI requirements. For this purpose we have taken two companies JustDial and TBZ IPO's and have compared them.Also supported by various casestudies such as DLF, Facebook, Alibaba etc.

1. 15 CRITICAL REQUIREMENTS IN OFFER
DOCUMENT RELEVANT REGULATORY
ASPECTS IN COMPANIES ACT 2013

2. Public Offer & Private Placement
(Companies Act 2013)
• Any business cannot run without funds.
• All subscribers should pay the value of shares agreed
to be taken by them.
• But this initial capital may not be sufficient for
running a business.

3. ISSUE OF SECURITIES BY PRIVATE
COMPANIES
• A company can issue capital by issuing securities.
• There are separate legal methods for public and
private companies for issuing securities.
• A Private Company may issue its securities:
i. By way of right or bonus issue; or
ii.Through private placement.

4. ISSUE OF SECURITIES BY PUBLIC
COMPANIES
• A Public company may issue securities:
i. To public through prospectus i.e. “Public Offer”.
ii. Through private placement;
iii. Through right issue.
• The term “public offer” includes “initial public offer”;
or “further public offer”; or “Offer for sale of securities
to the public by an existing shareholder” through issue
of a prospectus.

5. FUND RAISING OPTIONS

6. WHAT IS AN IPO – TO REFRESH
• Company issues its shares to the public for the first
time.
• Investors can place requests to buy these shares and
once done, the share gets listed in a registered stock
exchange .
• The company uses the share issue proceeds for its
development/growth.

7. REASONS FOR IPOs
For Funding needs
• Funding Capital Requirements for Organic Growth
• Expansion through Projects
• Diversification
• Funding Global Requirements
• Funding Joint Venture and Collaborations needs
• Funding Infrastructure Requirements, Marketing
Initiatives .

8. REASONS FOR IPOs
 Distribution Channels
• Financing Working Capital Requirements
• Funding General Corporate Purposes
• Investing in businesses through other companies
• Repaying debt to strengthen the Balance Sheet
• Meeting Issue Expenses
 For Non-funding Needs
• Enhancing Corporate Stature
• Retention and incentive for Employees through stock options
• Provide liquidity to the shareholders

9. SEBI ENTRY NORMS FOR AN IPO
Entry Norms I or EN I:
1. Net Tangible assets of atleast Rs. 3 crores for 3 full
years
2. Distributable profits in atleast 3 years
3. Net worth of atleast 1 crore in 3 years
4. If there was a change in name, atleast 50% of the
revenue in the preceeding year should be from the
new activity
5. The issue size should not exceed 5 times the pre-issue
networth of the company

10. • SEBI has provided 2 alternate routes to companies that do not
satisfy the criteria for accessing the primary market. They are
as follows:
 Entry Norms II or EN II:
• 1. Issue shall be only through the book building route with
atleast 50% allotted mandatorily to Qualified Institutional
Buyers (QIBs)
• 2. The minimum post issue face value capital shall be Rs. 10
crores or there shall be a compulsory market-making for
atleast 2 years
OR

11. Entry Norms III or EN III:
1. The “Project” is appraised and participated to the extent of
15% by FI’s/Scheduled Commercial Banks of which atleast
10% comes from the appraiser(s).
2. The minimum post issue face value capital shall be Rs. 10
crores or there shall be a compulsory market-making for
atleast 2 years
3. In addition to the above mentioned 2 points, the company shall
also satisfy the criteria of having atleast 1000 prospective
allotees in future

12. Bylaws Related Regulatory bodies
• The Bylaws related regulatory bodies are as follows:
• Companies Act, 2013
• Securities and Exchange Board
• Securities Contract (Regulation) Act, 1956

13. SCRR RULE PRIOR AMENDMENTS
Provides that a company can get listed with just
• 10 per cent holding with the public provided the
minimum net offer to the public is Rs 100 crore
(Rs 1 billion),
• a minimum of 20 lakh (2 million) shares are
offered to the public in an IPO through book-building
method and allocation to qualified
institutional buyers is 60 per cent of the size of
an issue.

14. SCRR- AMENDMENT DATED 4.6.2010
• The minimum threshold level of public holding
will be 25% for all listed companies.
• For new listing, if the post issue capital of the
company calculated at offer price is more than Rs.
4000 crore, the company may be allowed to go
public with 10% public shareholding and comply
with the 25% public shareholding requirement by
increasing its public shareholding by at least 5%
per annum.

15. SEBI allows free pricing of equity
shares in an IPO
• Approval of RBI might be required for public issues by
banks
• Issuer may mention floor price or price band in RHP
OR
• Issuer may announce floor price or price band at least
2 working days before bid opening in IPO and at least 1
day before bid opening in FPO in newspapers
• Cap on the price</= 120% of the floor price. i.e The
spread between floor price & Cap price shall not be
more than 20% (eg: 100-120)

16. • Floor Price/Final Price not to be less than face
value
• Differential pricing is permissible in a public
issue to retail individual investors and retail
individual shareholders
• Retail investors can be offered shares at a
discount to the price offered to other investor
categories (Max discount can be 10%)

17. ALLOTMENT OF SECURITIES
• As per Listing Agreement, a company is
required to complete allotment of securities
offered to the public within 30 days of the
date of closure of the subscription list.
• In case of Book Building issue, Allotment shall
be made not later than 15 days from the
closure of the issue failing which interest at
the rate of 15% shall be paid to the investors.

18. Key terms used in an IPO
• Prospectus/ Offer Document- An offer document
covers all the relevant information to help an
investor to make his/her investment decision.
• "Draft Offer document" -The draft offer documents
are filed with SEBI, at least 21 days prior to the filing
of the Offer Document
• Red Herring Prospectus- is a prospectus which does
not have details of either price or number of shares
being offered or the amount of issue

19. • Abridged Prospectus- means contains all the
salient features of a prospectus. It accompanies
the application form of public issues.
• Shelf Prospectus- a prospectus in respect of
which the securities or class of securities included
therein are issued for subscription in one or more
issues over a certain period without the issue of a
further prospectus

20. STEPS IN AN IPO PROCESS

21. SELECTION OF INVESTMENT BANK
PREPARATION OF REGISTRATION STATEMENT
GETTING THE PROSPECTUS READY
THE ROADSHOW
SEBI APPROVAL & GO AHEAD
DECISION ON PRICEBAND & SHARE NUMBER
AVAILABLE TO PUBLIC FOR PURCHASE
ISSUE PRICE DETERMINATION & SHARE ALLOTMENT
LISTING & REFUND

22. DIFFERENCE BETWEEN IPO IN INDIA &
US
INDIA US
1. In India the books are built directly by
the companies.
1. The underwriter takes the shares on his
books and then allots shares to
the investors.
2. The book-building process is transparent. 2. The book-building process is
confidential.
3. In India the book has to be open for a
minimum of 5 business days and the period
needs to be revised if the price band is
revised.
3. The books can be closed or opened
anytime.
4. In India the price band is fixed 4. The price band is soft – meaning the
bidder can bid for a price outside the price
band too .
5. Retail investors in India have to put in a
cheque or block an equivalent amount
corresponding to the IPO bid in their
DEMAT accounts .
5. In abroad, neither category needs to pay
any margin.

23. METHODS OF PUBLIC ISSUE
Issue
Type
offer Price Demand Payment Reservations
Fixed
Price
Issues
Price at which the
securities are
offered and would
be allotted is made
known in advance
to the investors
Demand for the
securities
offered is known
only after the
closure of the
issue
100 % advance
payment is required
to be made by the
investors at the time
of application.
50 % of the shares
offered are reserved
for applications
below Rs. 1 lakh and
the balance for
higher amount
applications.
Book
Building
Issues
A 20 % price band is
offered by the
issuer within which
investors are
allowed to bid and
the final price is
determined by the
issuer only after
closure of the
bidding.
Demand for the
securities
offered , and at
various prices, is
available on a
real time basis
on the BSE
website during
the bidding
period..
10 % advance
payment is required
to be made by the
QIBs along with the
application, while
other categories of
investors have to
pay 100 % advance
along with the
application.
50 % of shares
offered are reserved
for QIBS, 35 % for
small investors and
the balance for all
other investors.

24. BOOK-BUILDING METHOD
• The Process:
• The Issuer who is planning an offer nominates lead merchant banker(s) as 'book
runners'.
• The Issuer specifies the number of securities to be issued and the price band for the
bids.
• The syndicate members input the orders into an 'electronic book'. This process is
called 'bidding' and is similar to open auction.
• The book normally remains open for a period of 5 days.
• Bids have to be entered within the specified price band.
• Bids can be revised by the bidders before the book closes.
• On the close of the book building period, the book runners evaluate the bids on the
basis of the demand at various price levels.
• The book runners and the Issuer decide the final price at which the securities shall
be issued.
• Generally, the number of shares are fixed, the issue size gets frozen based on the
final price per share.
• Allocation of securities is made to the successful bidders. The rest get refund orders

25. Bookbuilding and allotment of shares
FACE VALUE-
10
PRICE-BAND-
Rs
48- Rs.55
Issue size-
1 mn
shares
Total 6 lac
shares will
be sold
@54-
4lac
shares
@55- 2 lac
share
Price is
lowered
@53- 4lac
shares are
sold
Cut-oof price is
@53- 1mn
shares are sold

26. Application Supported by Blocked
Amount (ASBA)
• The system, which ensures that the applicant's money
remains in his/her bank account till the shares are
allotted, was introduced by Sebi for retail investors,
corporate investors and HNIs.
• an authorisation to block his/her application money in
the bank account for subscribing to the IPO.
• His/her bank account is debited only after the basis of
allotment is finalised, or the IPO is withdrawn or fails.
• You can avail of ASBA only to subscribe to book-built
public issues and a select few rights issues

27. MERCHANT BANKERS
• Merchant Bankers to the issue or Book Running Lead
Managers (BRLM), syndicate members, Registrars to the
issue, Bankers to the issue, Auditors of the company,
Underwriters to the issue, Solicitors, etc. are the intermediaries
to an issue.
• The issuer discloses the addresses, telephone/fax numbers
and email addresses of these intermediaries.
• In addition to this, the issuer also discloses the details of the
compliance officer appointed by the company for the purpose
of the issue.

28. ROLE OF MERCHANT BANKERS
• Deciding on the size and timing of a public issue in the light of the
market conditions.
• Preparing the base of successful issue marketing from the initial
documentation to the preparation of the actual launch.
• Optimum underwriting support.
• Appointment of bankers and brokers as well as issue houses.
• Professional liaison with share market functionaries like brokers,
portfolio managers and financial press for pre-selling and media
coverage.
• Preparation of draft prospectus and other documents.
• Wide coverage throughout the country for collection of
applications.
• Preparation of advertising and promotional material

29. TYPES OF INVESTORS
There are three kinds of investors in a book-building issue.
• The retail individual investor (RII),
• The non-institutional investor (NII) and
• The Qualified Institutional Buyers (QIBs).
• Example

30. Origin of the Greenshoe
• The term "greenshoe" came from the Green Shoe
Manufacturing Company (now called Stride Rite
Corporation), founded in 1919.
• It was the first company to implement the greenshoe
clause into their underwriting agreement.
Guidelines for exercising green shoe option
• The guidelines require the promoter to lend his
shares (not more than 15% of issue size) which is to
be used for price stabilisation to be carried out by a
stabilising agent on behalf of the company.

31. GREEN SHOE OPTION
 Over-allotment option
• The green shoe option allows companies to intervene in the
market to stabilise share prices during the 30-day stabilisation
period immediately after listing.
• The green shoe option is also often referred to as an over-allotment
provision.
• It allows the underwriting syndicate to buy up to an additional
15% of the shares at the offering price if public demand for the
shares exceeds expectations and the stock trades above its
offering price.

32. Process of a greenshoe option on
over-allotment of shares.
• For instance, a company plans to issue 1 lakh shares, but to
use the greenshoe option; it actually issues 1.15 lakh shares,
in which case the over-allotment would be 15,000 shares.
• The 15,000 shares actually borrowed from the promoters with
whom the stabilising agent signs a separate agreement.
• For the subscribers of a public issue, it makes no difference
whether the company is allotting shares out of the freshly
issued 1 lakh shares or from the 15,000 shares borrowed from
the promoters.
• Once allotted, a share is just a share for an investor. For the
company, however, the situation is totally different. The
money received from the over-allotment is required to be kept
in a separate bank account (i.e. escrow account)

33. Alibaba's Blockbuster IPO
The e-commerce giant filed for an initial public
offering in the United States
Four months later
it achieved the biggest market debut in history
• the company priced its shares at $68
a pop, raising $21.8 billion
On
Sept. 18
• the stock began trading at a stunning
$92.70
on Friday,
Sept. 19

34. Alibaba's various ventures have made it arguably
the largest e-commerce company in the world
Alibaba Group Holding Ltd's shares soared 38 percent in their first day of trading.
The stock opened at $92.70 - quickly rose to a high of $99.70 - close at
$93.89. Some 271 million shares changed hands.
The pricing of the IPO raised $21.8 billion for Alibaba.
underwriters also exercise their option for an additional 48 million shares,
to bring the IPO's size to about $25 billion.
At its closing share price, Alibaba has a market value of $231 billion,
exceeding the combined MCAP of Amazon and eBay.
Alibaba is valued at 39 times its estimated EPS for its current fiscal year,
which ends in March.

35. ALIBABA’s Green shoe option
• The greenshoe allowed Alibaba’s banks to buy
the extra 48 million shares they sold to investors
at the IPO price of $68.
• So Alibaba’s underwriters were able to use the
overallotment option to increase the IPO size
because of the high demand the first day
of trading-- and make $39.2 million in fees just
from the greenshoe, bringing their total to $300
million.
• They raked in $261.2 million after completing the
IPO, according to a regulatory filing.

36. Role of the stabilising agent
• Starts its process only after trading in the share starts at
the stock exchanges.
• In case the shares are trading at a price lower than the
offer price, the stabilising agent starts buying the shares
by using the money lying in the separate bank account.
• Puts the brakes on falling prices by buying the shares
when others are selling and are handed over to
promoters from whom they were borrowed.
• In case the newly listed shares start trading at a price
higher than the offer price, the stabilising agent does
not buy any shares.

37. The botched Facebook IPO
In May 2012 Facebook initial public offering
Initial share price at $38.00
after the company’s first full day of TRADING
Facebook was down $4.00 per share and back to its
issue price
continued to slide in subsequent weeks and months of TRADING

38. Morgan stanley played a “stabilising agent” it was the firm's job to keep the
shares above the offering price
It had to dip into an emergency reserve of around
63 million Facebook shares—worth more than
$2.3 billion at the offer price—to boost the price
and create a floor around $38 a share
In successful IPOs, the reserve, known as the "overallotment" or "green
shoe," is used by underwriters to meet soaring demand but in this case, it
was used to prop up Facebook's ailing share price..
The underwriters have the extra shares available to either sell or buy for
a period after the IPO.
If demand is strong, they sell them like all the other shares. But if the
stock price falls, they can buy them back, effectively creating a floor for
the price.

39. Greenshoe option in action
• It is very common for companies to offer the
greenshoe option in their underwriting agreement.
• In 2009, most realty companies in India, who
were planning to raise funds from the primary
market, had opted for green shoe option in their
IPOs to stem volatility in share prices .
• Companies such as Sahara Prime City, DB Realty,
Lodha Developers and Ambience had opted for
the green shoe option, which helped them
stabilise share prices in the event of extreme
volatility or prices moving below offer price.

41. IPO STATISTICS
• The table below shows the number of IPO’s being conducted
and the amount raised

43. CRITICAL DISCLOSURES IN OFFER
DOCUMENT
1.Insustry Analysis
2. Risk Factors
3. Capital Structure
4. Object of Issue
5. Means of Finance
6. Basis of issue Price
7. Promoter’s Contribution
8. Lock-in Requirement

44. 9. Management
10. Financial Details
11. Litigations
12. IPO Grading
13. Eligibility for the
Issue
14. Allotment of shares
15. Safety net

45. ISSUE DETAILS
JUST DIAL TBZ
Issue Open May 20, 2013 - May 22, 2013 Apr 24, 2012 - Apr 26, 2012
Issue Type 100% Book Built Issue IPO 100% Book Built Issue IPO
Issue size 17,497,458 Equity Shares of Rs. 10 16,666,667 Equity Shares of Rs. 10
Issue size Rs. 919.14 Crore Rs. 200.00 Crore
Face value Rs. 10 Per Equity Share Rs. 10 Per Equity Share
Issue price Rs. 470 - Rs. 543 Per Equity Share Rs. 120 - Rs. 126 Per Equity Share
market lot 25 Shares 45 Shares
Minimum Order
25 Shares 45 Shares
Quantity
Listing at BSE, NSE, MCX-SX BSE, NSE
lead managers citi bank, morgan Stanley A. Avendus capital, IDFC
Listing Date: Wednesday, June 05, 2013 Wednesday, May 09, 2012
Issue Price: Rs. 530.00 Per Equity Share Rs. 120.00 Per Equity Share

46. Tribhovandas Bhimji Zaveri Ltd
• Incorporation : 1949
• Core Business : Gold jewellery, diamond-studded jewellery,
Platinum jewellery and jadau jewellery.
• Location : 14 showrooms in 10 cities across 5 states.
• Award : 'Readers Digest Trusted Brand Asia' in the category
of 'Jewellery Shop' in 2006, 2007 and 2008.
• Revenue from Operations FY2011 : Rs 11,939.31 million

47. TBZ IPO HIGHLIGHTS
• TBZ came out with an initial public offer of 16,666,667
equity shares to raise Rs 210 crore .
• Proceeds usage- The company will use Rs 19.2 crore to
finance the establishment of new showrooms and Rs 160.4
crore for the incremental working capital, mainly for
inventory.
• Valuations - When compared with Titan Industries
(Tanishq), the company's shares are being offered at a big
discount.
• Business - Prior to IPO, In the last five years, TBZ's sales
have more than quadrupled, while its net profit has
become eight fold

48. TBZ IPO HIGHLIGHTS
• Positives- The company recorded an average
sales growth of a robust 41 per cent between
FY07 and FY11, while the operating profit margin
(OPM) has improved from 6.2 per cent to 7.3 per
cent in same period
• Concerns- Decline in the prices of gold and
diamonds, no exact location mentioned for new
stores
• Final outcome- "Glittering pedigree alone can't
justify higher discounting."

49. JustDial Limited
• Incorporation : 1996
• Core Business : Local Search Service Provider
- Selling advertisement and qualified leads
- Just dial is a 24/7 Free Search service on a
single national number 08888888888
- Provides reliable information about local
businesses, products and services to the users
in over 2000 cities in India. 300 million
customer base.

50. JUST DIAL IPO HIGHLIGHTS
• The Company Gets None of The Money- All the
money raised in the IPO will go to pay existing
shareholders, who will exit to the extent of 25% of
the company’s shares.
• The US version of “Just Dial” is owned by
promoters, not by Just Dial India- . The promoters
and principal shareholders own shares in a company
called JD Global, which has licensed the Just Dial
brand from Just Dial India

51. JUST DIAL IPO HIGHLIGHTS
• Sequoia significantly lifts Just Dial Networth in July
2012 - Just Dial’s Networth was just over Rs 100 crs on
March 31,2012 .
- It rose dramatically to over Rs 400 crs on December
31,2012 because Sequoia I & II each invested Rs 125.50
crs aggregating Rs 251 crs by subscribing for 2568243
shares each at Rs 488.66/share on July 21,2012
• Safety net
• Final outcome- . The Rs.950-crore IPO, the biggest
issue so far in 2013, received bids for over 15.76 crore
shares, as against 1.35 crore shares on offer

52. DISCLOSURE 1- Industry Analysis
JustDial
• The Indian advertising industry- , India is the
14th biggest advertising market globally With
a growing internet user base of over 200
million.
• Local Indian Search Market
-online
-offline

53. COMPETITIVE STRENGTHS
• First Mover Advantage in the Indian Local Search
Market
• Strong Brand Recognition
• Offer Attractive Value Proposition for SMEs
• Experience and Expertise in Local Indian Markets
• Efficient and Profitable Business Model
• Advanced and Scalable Technology Platform
• Multiple Platform Service on a Large Scale

54. DISCLOSURE 1- Industry Analysis
TBZ
• Gems and Jewellery Industry in India- In FY 14, the Indian gems
and jewellery industry has contributed US$ 34,746.90 million.
• Market size- FDI inflows from April 2000-June 2014 was Rs
2,154.55 crore . Domestic market size- Rs.251 crore in 2013.
• Investments - Surat plans to house a world-class diamond bourse
that will offer a TRADING facility
• Government initiatives- RBI has liberalised gold import norms
under the 80:20 rule.
• Road Ahead- Exports from the gems and jewellery industry could
touch US$ 58 billion by 2015,

55. Competitive strength
• They Have a Long History and a Strong Brand
Name
• Design, Innovation and Product Range
• Well-Established Systems and Procedures
• Expansion Experience
• They have their our own Manufacturing Facilities
• Experienced Management
• Procurement Advantage

56. DISCLOSURE 2- RISK FACTORS
Risk Factor
Internal Factor
(Specific to project and
internal to the issuer
company)
External Factor
(Beyond the control of the
issuer company)

57. SEBI Requirements:
Risk factors shall be determined on the basis of
their materiality.
The Risk factors shall appear in the prospectus
in the following manner:
• Risks envisaged by Management.
• Proposals, if any, to address the risks.

58. JustDial Ltd
Internal Risk Factors
• Controlled by Promoters and
Promoter Group after the
Offer i.e 33.1% of outstanding
Equity shares.
• Adapt to technological
developments.
• Proper functioning of the
company’s website.
• Reliability on
telecommunications and
information technology system
External Risk Factors
• 1. Changing laws, legal
uncertainties, adverse application
of tax laws and regulations.
• Sales of the Equity Shares by the
Promoters may adversely affect
the trading price of the Equity
Shares.
• Failure to successfully adopt IFRS
when required under Indian law
could have a material adverse
effect on stock price.

59. TBZ Ltd
Internal Risk Factors
• No definitive expansion plans due
to low consumer sentiments.
• Subject to decrease in value of gold
and diamonds which would reduce
value of inventory.
• Adapt to changing consumer
preferences.
• RBI has declared jewellers ‘high-risk’
accounts thus adversely
affecting ability to obtain financing
in a timely manner and on
acceptable terms.
• Stringent regulatory curbs on gold
imports, which included raising the
import duty from 2 to 10 per cent.
External Risk Factors
• Jewellery purchases are
discretionary and may be
particularly affected by adverse
trends in the Indian economy.
• The Indian retail jewellery
industry is extremely competitive.
• Increases in the prices of gold
and diamonds may have an
adverse effect on the demand for
jewellery, which may adversely
effect their results of operations.
• Any increases in interest rates
would have an adverse effect on
the results of operations.

60. Our Opinion
• Risk Factor should be carefully reviewed
before Investing.
• TBZ is price sensitive and has higher risk of
operation than Justdial.
• Justdial, leading e-business enjoys monopoly
on stock exchange.
• Since their listing the share price of Justdial
has appreciated by 200% and TBZ by only 35%

61. DISCLOSURE 3- CAPITAL STRUCTURE
• SEBI Requirements:
• (a) Authorized, issued, subscribed and paid up capital (Number of
instruments, description and aggregate nominal value)
• (b) Size of the present issue, giving separately promoters’ contribution, firm
allotment/ reservation for specified categories and net offer to public.
Name(s) of group companies to be given, in case reservation has been made for
shareholders of the group companies; Applicable percentages may be given in case
of book built issue.
• (c) Paid-up Capital:
(i) After the issue.
(ii) After conversion of securities (if applicable)
• (d) Share Premium Account (before and after the issue)

62. Just Dial – Capital Structure
Aggregate Value at
Face Value
Aggregate Value at
Offer Price
a AUTHORISED SHARE CAPITAL
100,000,000 Equity Shares 1,000,000,000
1,200,000 Preference Shares 12,000,000
total 1,012,000,000
b ISSUED, SUBSCRIBED AND PAID-UP
CAPITAL BEFORE THE OFFER
69,872,750 Equity Shares 698,727,500
c PRESENT OFFER IN TERMS OF THIS RED
HERRING PROSPECTUS
Offer for sale of 17,497,458 Equity Shares
Of which-retail
investors- 1,749,745
QIB’s-10,272,647
anchor investors- 3,936,925
non- institutional- 2,624,618
174,974,580 9,191,410,000
d SECURITIES PREMIUM ACCOUNT
before the offer 2,478,533,441
after the offer 2,478,533,441
E PAID-UP CAPITAL AFTER THE OFFER
69,872,750 Equity Shares 698,727,500

63. TBZ – Capital Structure
Aggregate Value at
Face Value
Aggregate Value at
Offer Price
a AUTHORISED SHARE CAPITAL
75,000,000 Equity Shares 750,000,000
b ISSUED, SUBSCRIBED AND PAID-UP
CAPITAL BEFORE THE OFFER
50,000,000 Equity Shares 500,000,000
c PRESENT OFFER IN TERMS OF THIS RED
HERRING PROSPECTUS
16,666,667 Equity Shares
of which-retail
investors- 3,476,385
QIB’s-7,515,990
anchor investors- 2,499,999
non-institutional- 3,174,293
166,666,670 2,000,000,000
d SECURITIES PREMIUM ACCOUNT
before the offer NIL
after the offer NIL
E PAID-UP CAPITAL AFTER THE OFFER
66,666,667 Equity Shares 666,666,670

64. Our Opinion
• It gives information on how much does the company
wants to raise and how many shares are subscribed to
after the IPO.
• Sebi forced key changes to Justdial IPO. Scaled-down
valuations force company to sell 25%, instead of 10%
-Justdial intended to sell 10% in IPO
-Was seeking valuations of about Rs 4,000 cr
-Sebi questioned the bankers on valuations
-Rule forces Justdial to sell 25% instead of 10%
-Sebi also asked promoters to provide ‘safety net’
option
-IPO is 75% QIB-backed based on profitability criteria

65. DISCLOSURE 4 – OBJECTS OF THE
OFFER
• SEBI Requirements:
• The object of raising funds through the issue,
that is whether for fixed asset creation and/ or
for working capital or any other purpose, shall
be disclosed clearly in the prospectus.

66. JUSTDIAL – OBJECTS OF THE OFFER
• To achieve the benefits of listing the Equity
Shares on the Stock Exchanges and to carry
out the sale of 17,497,458 Equity Shares by
the Selling Shareholders.
• The listing of the Equity Shares will enhance
their brand name.
• Providing liquidity to the existing
shareholders.
• Public market for the Equity Shares in India.

67. TBZ- OBJECTS OF THE ISSUE
• The Company intends to utilise the Net
Proceeds for the following objects:
1. To finance the establishment of new
showrooms; opening of 43 new showrooms
by the end of Fiscal 2015.
2. To finance incremental working capital
requirements; and
3. General corporate purposes.

68. DISCLOSURE 5- MEANS OF FINANCE
Just Dial- Issue proceeds utilization
• Selling 17.5 million shares priced between Rs 470-543 each, raising
between Rs 822 to 950 crores from its issue.
• Already raised Rs 580 crore from Sequoia Capital, SAP Ventures, SAIF
Partners, EGCS, and Tiger Global. These PE firms together hold close to
60% stake in the company. Company valuation at Rs. 2,600 crore.
• The net proceeds of the IPO would not come into the company, as it is an
exit opportunity for the existing investors (16 per cent of the OFS by
promoters and the remaining 84 per cent by PE Investors).
• Funds raised would not be used towards business development.
• Enhance the brand name and provide liquidity to the existing
shareholders.

69. TBZ- Issue proceeds utilization
• Entire requirement of funds towards the
objects of the Issue, other than working
capital requirements, will be met from the Net
Proceeds.
Utilisation of Net Proceeds- (In millions)
sr.no particulars utilization of IPO
proceeds as on 31st
march, 2013
1 To finance the establishment of new showrooms 191.94
2 To meet incremental working capital requirements 1,604.49
3 General corporate purposes 44.94
4 issue related expenses 158.6
total amount 2,000

70. Working Capital Requirement- TBZ
• Working capital requirements will be from banks loans and
internal accruals.

71. Our Opinion
• Justdial IPO proceeds only beneficial to promoters as there is no
fresh issue only existing shares are offered for sales. Nothing for the
company.
• TBZ requires intensive WC in the ordinary course of its business
from various banks and from its internal accruals.
• Dec 31 2011- WC funding from banks- Rs 1908.23 mn
• Total WC requirement as of March 31, 2013 is estimated to be Rs.
5,875.6 mn
• Loans sanctioned from SBI- Rs 1400 mn and from HDFC Bank – Rs
480 mn
• 75% of the total working capital funding from the banks as of March
31, 2013 amounts to Rs. 1,867.55 mn.
• Company requires additional WC primarily for financing the
inventory in the new showrooms that it is proposing to set up
pursuant to this issue

72. DISCLOSURE 6 – BASIS OF THE ISSUE
PRICE
• SEBI Requirements:
1. Earnings per share i.e. EPS pre-issue for the last three
years (as adjusted for changes in capital);
2. P/E pre-issue
3. Average return on net worth in the last three years
4. Minimum return on increased net worth required to
maintain pre-issue EPS
5. Net Asset Value per share based on last balance
sheet
6. Net Asset Value per share after issue and comparison
thereof with the issue price

73. TBZ- BASIS FOR ISSUE PRICE
• Quantitative Factors :
1. Basic and diluted EPS-Standalone
Period Ended Basic EPS(Rs.) Diluted EPS(Rs.) weight
March 31, 2011 8.08 8.07 3
March 31, 2010 3.39 3.39 2
March 31, 2009 2.14 2.14 1
Weighted Average 5.53 5.52
December 31,2011 10.10 10.08
2. Basic and Diluted EPS- Consolidated
Period Ended Basic EPS(Rs.) Diluted EPS(Rs.)
March 31, 2011 8.00 8.00
March 31, 2010 3.38 3.38
December 31,2011 10.06 10.04

74. 3. P/E ratio in relation to the issue price of Rs.120 per equity
share
particulars consolidated
4. Industry P/E*
P/E
current P/E CMP
P/E ratio based on basic EPS
for the year ended March 31,
2011 at the issue price
15x 31.23x 163
P/E ratio name of the company Face value of
equity shares (rs)
current P/E
highest 39x Titan Industries Limited 1.00 46.81
lowest 7.63x Thangamayil Jewellery Limited 10.00 8.3
Industry P/E 18x 22.5

75. 5. P/E ratio in relation to the cap price and floor price per equity
share
Particulars consolidated P/E
P/E ratio based on basic EPS for the year ended March
31, 2011 at the floor price
6. Return on Networth (RoNW) – Standalone
15x
P/E ratio based on basic EPS for the year ended March
31, 2011 at the cap price
15.62x
period ended RoNW(%)-
standalone
Weight RoNW(%)-
Consolidated
March 31, 2011 36.78 3 36.55
March 31, 2010 24.74 2 24.71
March 31, 2009 20.25 1 31.37
Weighted
30.01 32.06
Average
December
31,2011
31.44 36.38

76. Net Asset Value
• NAV (Consolidated) as at March 31, 2011 : ` 21.90 per Equity Share
• NAV (Standalone) as at March 31, 2011 : ` 21.98 per Equity Share
• NAV (Consolidated) as at December 31, 2011 : ` 32.08 per Equity Share
• NAV (Standalone) as at December 31, 2011 : ` 32.13 per Equity Share
• Issue Price : ` 120 per Equity Share
• NAV (Consolidated) after the Issue : ` 61.48 per Equity Share
• NAV (Standalone) after the Issue : `61.5 per Equity Share
Note:
(i) Net Asset Value per Equity Share (`) = Net worth as per statement of adjusted assets
and liabilities divided by the number of Equity Shares adjusted for the bonus issue
on October 7, 2010.
P/E ratio name of the
company
Face value of
equity
shares (rs)
current P/E
INDUSTRY P/E
highest 39x Titan Industries
Limited
1.00 46.81
lowest 7.63x Thangamayil
Jewellery Limited
10.00 8.3
Industry P/E 18x 22.5

77. 7. Comparison with other listed companies
Diluted EPS as
of Mar 31,
2011 (Rs.)
P/E
Ratio
RoNW
(%)
NAV per
Equity Share
Sales
(Rs.` in
million)
Tribhovandas
Bhimji
Zaveri Limited
8.07 36.78 21.98 11,939.31
PEERS
Titan Industries
Limited*
96.96 50.37 41.98 231.00 65,208.95
Gitanjali Gems
Limited
22.84 14.29 10.03 265.88 51,224.72
Thangamayil
Jewellery
Limited
22.84 7.63 31.90 71.58 6582.68
• Own manufacturing facility for diamond-studded jewellery.
• Competition from few organised players and large number of
small unorganised players who capture 90% of the market.

78. JUSTDIAL - BASIS FOR ISSUE PRICE
Quantitative Factors :
1) Earnings Per Share (“EPS”)
As per the restated unconsolidated summary statements
Period Ended Basic EPS(Rs.) Diluted EPS(Rs.) weight
March 31, 2010 2.93 2.93 1
March 31, 2011 4.75 4.6 2
March 31, 2012 8.93 7.78 3
Weighted Average 6.54 5.91
Nine month period ended
7.19 6.89
December 31,
2012
As per the restated consolidated summary statements
Period Ended Basic EPS(Rs.) Diluted EPS(Rs.) weight
March 31, 2010 2.74 2.74 1
March 31, 2011 4.72 4.57 2
March 31, 2012 9.37 8.13 3
weighted average 6.72 6.05

79. 2) Price Earnings Ratio (“P/E” Ratio)
P/E Ratio in relation to Price Band of Rs.470-543 per Equity
Share
particulars P/E at the lower end
of Price Band (47 no.
of times)
P/E at the
higher end of
Price Band (54.3
no. of times)
P/E at the issue price
of Rs. 530
Based on Unconsolidated EPS
for the nine month
period ending December 31,
2012
65.36 75.15 73.71
Based on Unconsolidated EPS
for Fiscal 2012
52.63 60.8 59.35
Based on Unconsolidated
Weighted Average EPS
71.86 83 81
particulars P/E at the
lower end of
Price Band
(no. of times)
P/E at the
higher end of
Price Band
(no. of times)
P/E at the
issue price
of Rs. 530
Based on consolidated EPS for
fiscal
2012
50.16 57.95 56.56
Based on consolidated
Weighted Average EPS
69.94 80.80 78.86

80. 3) Return on Net Worth (RoNW) as per restated unconsolidated
summary statements
Period Ended RoNW (%) Weight
March 31, 2010 29.39% 1
March 31, 2011 30.21% 2
March 31, 2012 48.93% 3
Weighted Average 39.43%
Nine month period ended December 31,
2012
As per the restated consolidated summary statements
• No Industry Peers
11.63%
period ended RoNW (%) weight
March 31, 2010 28.88% 1
March 31, 2011 30.72% 2
March 31, 2012 51.09% 3
Weighted Average 40.59%

81. • 4) Net Asset Value (“NAV”) Per Equity Share after
considering the increased share capital(1)
• Net Asset Value (after retrospective adjustment of
bonus issue and outstanding financial instruments) per
Equity Share as of December 31, 2012 is ` 57.51 as per
the restated unconsolidated summary statements.
• After the Offer: 76.18
• Offer Price: 530

82. Our Opinion
• Justdial company valued at post-IPO issue market cap of Rs
37.9 billion, which translates into an annualised FY13E P/B &
P/E valuation of 8.1x and 52.3x respectively.
• JDL has a high cash conversion ratio (FCF/EBITDA - 92 percent
over FY10-12), due to 100 percent pre-payment by paid
advertisers and the low capex intensive nature of the
business.
• Just dial’s IPO valuations are quite high as it is the only
company in its industry which has got listed.
• Also its an offer for sale and not a fresh issue. Therefore
technically there is no change in the networth as the
promoters just wanted to exit from that stock.
• Taking that as an advantage the stock was listed at a premium
whereas

83. • Considering the P/E valuation of TBZ on the upper end of the price
band of Rs 126 the stock is priced at pre issue P/E of 9.39x on its
annualised FY11 EPS of 13.42.
• Post issue, the stock is priced at a P/E of 12.52 on its annualised EPS
of 10.06.
• Company which has peers like Titan and Gitanjali gems which
although fall in the same sector aren't strictly comparable due to
their size and reach.
• TBZ was trading at a discount on its debut.
• Currently Justdial’s PE ratio is 100.3 whereas of TBZ it’s at 31.23x.
the issue price of TBZ was fixed at the lower band that is atRs.120
per share. The issue price of justdial was fixed at the upper band
that is Rs. 530

84. DISCLOSURE 7- PROMOTER’S
CONTRIBUTION
SEBI Requirements:
 In a public issue by an unlisted company, the
promoters shall contribute not less than 20% of the
post issue capital.
 The promoters shareholding after offer for sale shall
not be less than 20% of the post issue capital.

85. • Just Dial- Promoter’s Contribution
Shareholders Pre-issue(%) Post-issue(%)
Promoter & promoter group 37.2% 33.1%
others 62.9% 41.8%
public 25%
• TBZ- promoter’s contribution
Shareholders Pre-issue Post-issue
No.of
shares
% No.of shares %
Promoter &
promoter group
46,599,775 93.2 46,599,775 71
others 2,700,000 5.4 2,700,000 4
public 700,225 1.4 16,670,000 25
TOTAL 50,000,000 100 65,969,775 100

86. Current Shareholding Pattern
JUSTDIAL TBZ
Holder's Name
No of
Shares
%
Share
Holding
Holder's Name
No of
Shares
%
Share
Holding
Promoters 23149199 32.99% Promoters 49459775 74.13%
ForeignOcb 23469121 33.45% ForeignInstitutions 10916919 16.36%
ForeignInstitutions 21039574 29.98% GeneralPublic 3165156 4.74%
GeneralPublic 1803989 2.57% OtherCompanies 2825887 4.24%
OtherCompanies 298547 0.43% Others 167163 0.25%
NBanksMutualFunds 271066 0.39% ForeignNRI 137587 0.21%
Others 93947 0.13% NBanksMutualFunds 39748 0.06%
ForeignNRI 38843 0.06% FinancialInstitutions 7665 0.01%
FinancialInstitutions 4152 0.01%

87. Our Opinion-
• Just Dial contribution in Post-Issue Capital is 33.1% which is only 4% less than
pre- Issue Capital of 37.2%. Wherein TBZ Promoter’s contribution in Post-Issue
Capital is 71% which is only 20% less than pre- Issue Capital of 93.2%.
• Both companies promoter’s contribution after post-issue is more than 20%
therefore both the companies are complying with the requirements of SEBI
guideline.
• However Just dial is reducing promoter’s contribution by only 4% compare to
20% of TBZ. The promoter holding post issue is more in TBZ(70%) than in
JUST DIAL (33%), which influences an investors confidence.
• More the promoter contribution the higher the trust of the promoters of the
company in the company, but on the other hand it also indicates more control.
SEBI has given the limit to promoter’s contribution of 75%.
• More the promoter contribution more is the benefit of dividend.
• Eg:- SUN group has promoter contribution of 75% and 200% dividend was
declared on 5 paid up(2013), thus promoters earning more in this process.

88. DISCLOSURES 8- LOCK IN
REQUIREMENTS
 SEBI Requirements:
 In case of any issue of capital to the public the minimum promoters’
contribution shall be locked in for a period of 3 years.
 In case of a public issue by unlisted company, if the promoters’
contribution in the proposed issue exceeds the required minimum
contribution, such excess contribution shall also be locked in for a
period of (one year).
 The entire pre-issue capital, other than that locked-in as minimum
promoters’ contribution, shall be locked-in for a period of one year
from the date of allotment (in the proposed public issue).

89. JUSTDIAL
• 20.06% of the post-Issue shareholding of the Company held by the
Promoters and locked in for three years, the balance pre-Issue share
capital of the Company will be locked in for a period of one year from
the date of Allotment in this Issue.
• The details of the equity shares held by their promoters –
Date of
Transaction
and when
made fully
paid-up
Nature of
Transaction
No. of
Equity
Shares
Face
Value(Rs. )
Issue/ Acquisition
Price per Equity
Share (rs)
percentage
of post-offer
paid-up
capital(%)
V.S.S Mani
April 24,
2010
Bonus issue 11,948,430 10 - 17.08
Anita Mani
April 24,
2010
Bonus issue 329,142 10 - 0.48
Ramani Iyer
April 24,
2010
Bonus issue 855,080 10 - 1.22
V. Krishnan
April 24,
2010
Bonus issue 855,233 10 - 1.22
Total 20.00

90. TBZ
• In addition to the 20% of the fully diluted post-
Offer shareholding of the Company held by
Promoters and locked in for three years.
• Accordingly, Equity Shares, aggregating up to
13,375,020 i.e 20.06 % of the post Issue capital of
the Company held by the Promoter, shall be
locked in for a period of three years from the date
of Allotment in the Issue.

91. Date Of
acquisition
And
allotment
Nature of
Transaction
Nature of
consideration
No. of
Equity
Shares
Face
Value(Rs. )
Issue/ Acquisition
Price per Equity
Share (rs)
percentage
of post-offer
paid-up
capital(%)
Shrikant Zaveri
October 7,
2010
Bonus issue Bonus issue
in the ratio of
1:4*
10,545,730 10 - 15.82
Binaisha Zaveri
October 7,
2010
Bonus issue Bonus issue
in the ratio of
1:4*
1,516,895 10 - 2.28
Raashi Zaveri
October 7,
2010
Bonus issue Bonus issue
in the ratio of
1:4*
1,312,395 10 - 1.97
Total 13,375,020 20.06

92. OUR OPINION
 Pursuant to the SEBI Regulations, an aggregate of 20% of the
post-Issue Equity Share capital of the Company shall be locked
in by the Promoter for a period of three years from the date of
Allotment.
 Accordingly, just dial locked in Equity Shares of 13,987,855
aggregating up to 20% of the post-Issue capital of the Company
held by the Promoter, for a period of three years from the date
of Allotment in the Issue.
 And TBZ locked in Equity Shares of 13,375,020 aggregating up
to 20.06% of the post-Issue capital of the Company held by the
Promoter, for a period of three years from the date of Allotment
in the Issue

93. DISCLOSURE 9- MANAGEMENT
 SEBI Requirements:
 Name, age, qualifications, Director Identification Number, experience,
address, occupation and date of expiration of the current term of office
of manager, managing director, and other directors giving their
directorships in other companies.
 The nature of any family relationship between any of the directors.
 Any arrangement or understanding with major shareholders,
customers, suppliers or others, pursuant to which of the directors was
selected as a director or member of senior management.
 Details of service contracts entered into by the directors with the issuer
company providing for benefits upon termination of employment and a
distinct negative statement in the absence of any such contract

94. TBZ- MANAGEMENT
NAME DESIGNATION
Ajay Mehta Independent Director
Binaisha Zaveri Whole Time Director
Kamlesh Vikamsey Independent Director
Niraj Oza Co. Secretary & Compl.
Officer
Niraj Oza Secretary
Prem Hinduja Chief Executive Officer
Raashi Zaveri Whole Time Director
Sanjay Asher Independent Director
Saurav Banerjee Chief Financial Officer
Shrikant Zaveri CEO

95. Justdial- Management
NAME DESIGNATION
B Anand Chairman(NonExe.&Ind.Director)
Ramani Iyer Non Exe.Non Ind.Director
Ravi Adusumalli Non Exe.Non Ind.Director
Malcolm Monteiro Ind. Non-Executive Director
V S S Mani Managing Director
V Krishnan Non Ind.& Exe.Director
Sanjay Bahadur Ind. Non-Executive Director
Shailendra Jit Singh Non Exe.Non Ind.Director

96. Our Opinion-
• Shrikant Zaveri, Aged 52,TBZ CEO
• Education : Matriculation
• Experience : More than 30 years in jems and
jewellery industry.
• He took over as the managing partner of the
business in 2001.
• He was the founding member and chairman of the
Gems and Jewellery Trade Federation.
• He has been awarded the Retail Jeweller Award
for lifetime achievement in the year 2007.

97. • Justdial founded by V.S.S Mani, MD & CEO
• Education: Discontinued Bachelor’s degree in Commerce
after completing two years and undertook articleship
under member of the Institute of Chartered Accounts of
India.
• Experience :23 years of experience in the field of media
and local search services.
• Co-founded Ask Me Services and has also worked with
United Database India Private Limited. He is involved in
the formulation of corporate strategy and planning, overall
execution and management, and concentrates on the
growth and diversification plans of Company.
(Both are dynamic and have the expertise in their respective
fields)

98. Disclosure 10- Financial Details
SEBI Requirements-
• a) Stand-alone and consolidated financial statements of the issuer
company in respect of the last completed accounting year
• b) For the period between the last date of the balance sheet and profit
and loss account sent to the shareholders and up to the end of the last
but one month preceding the date of the letter of offer following shall
be furnished.
I. Working results of the issuer company under following heads: Sales,
Other income, Estimated gross profit / loss, Provision for
depreciation, Provision for taxes., Estimated net profit /loss
II. Material changes and commitments, if any affecting financial
position of the issuer company
III. Week-end prices for the last four weeks of equity shares.

99. c) Stock market quotation of shares/ convertible instruments of the
company (high/ low price in each of the last three years and
monthly high/low price during the last six months).
d) Accounting and other ratios: EPS, Return on Net worth: Net
Asset Value per share , on the basis of Indian Accounting
Standards.
e) A Capitalisation Statement showing total debt, net worth, and
the debt/equity ratios before and after the issue is made shall be
incorporated. One standard financial unit shall be used in the
Letter of Offer
f) A statement to the effect that the price has been arrived at in
consultation between the issuer company and the Merchant
banker.
g) Any material development after the date of the latest balance
sheet and its impact on performance and prospects of the issuer
company.

100. Just Dial - P&L at the time of the
IPO
Net Asset value per share
10.53 15.13 15.87
60.4
76.19
80
60
40
20
0
FY10 FY11 FY12 FY13 FY14
(in ₹)
FY10
(in ₹) FY11
(in ₹) FY12
(in ₹) FY13
(in ₹) FY14
• NAV per share is the expression of the value of a company or fund per
share.
• NAV rose sharply, 4 times to 60.4 during FY13. Post-issue the NAV has
risen to 76.19 due to increase in assets to 7650 million in FY14 from
6074 million in FY13.

101. 1347.63
1876.6
TOTAL INCOME
2752.15
3764.11
5012.42
6000
5000
4000
3000
2000
1000
0
FY10 FY11 FY12 FY13 FY14
• The Company operates a prepaid revenue model and advances. Revenue
from local search operations is derived from various service offerings to
Small and Medium Enterprises (SMEs).
• Post issue the total income has increased by 33% in FY14.
FY10
FY11
FY12
FY13
FY14
CAGR
38.87%
in ₹ million

102. 193.25
288.25
Profit After Tax
505.81
684.57
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
• Profit after tax for the year increased by 76.18% from `684.57
million in FY 2012-13 to `1,206.08 million in FY 2013-14.
• The pre-issue PAT growth stood at 35%.
1,206.08
-
FY10 FY11 FY12 FY13 FY14
FY10
FY11
FY12
FY13
FY14
CAGR
58.06%

103. 303.70
453.87
1,600.00
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
EBITDA
• The Company’s (EBITDA) margin stands at 30.83% of the total
income in the year ended March 31, 2014.
• CAGR of 47% is recorded.
672.30
1,007.19
1,421.98
-
FY10 FY11 FY12 FY13 FY14
FY10
FY11
FY12
FY13
FY14
CAGR
47.1%

104. 34.89 35.77
Return on Networth
49.92
25.72* 25.14
60.00
50.00
40.00
30.00
20.00
10.00
-
FY10 FY11 FY12 FY13 FY14
• Networth rose dramatically in FY 2012 as SEQUIOA
INVESTED HEAVILY in The business.
• There is no significant changes in the networth of the company
as it was an offer for sale and not an fresh issue
FY10
FY11
FY12
FY13
FY14
In Percentage%

105. TBZ - P&L at the time of the IPO
8825.2
11944.6
21000
18000
15000
12000
9000
6000
3000
TOTAL INCOME
• The increase in revenue primarily pertains to full year of operations
of new showrooms added during the previous year.
• The increase is also attributed to higher sales emanating from the
addition of new showrooms.
13870.8
16642.2
18309.6
0
FY10 FY11 FY12 FY13 FY14
FY10
FY11
FY12
FY13
FY14
CAGR
20%

106. 169.40
404.20
Profit After Tax
571.90
850.00
550.60
900.00
800.00
700.00
600.00
500.00
400.00
300.00
200.00
100.00
-
FY10 FY11 FY12 FY13 FY14
• The Company witnessed a decline in PAT of 35.23% as compared to
the previous year. The drop in the PAT margin was due to higher
interest costs on account of gradual phasing out of low-cost gold loan
model.
• Post issue the company’s PAT increased by 50%in the FY13.
FY10
FY11
FY12
FY13
FY14
CAGR
34%

107. 1,800.00
1,600.00
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
EBITDA
• The Company has witnessed a 9.88% decline in EBITDA in 2013-14.
The decline is attributed to reduction in Gross Profit margins and
increase in overheads on account of addition of new showrooms.
• Post issue in FY13 the ebitda declined to 23% as compared to 44% pre
issue
474.70
873.20
1,236.70
1,531.00
1,393.40
-
FY10 FY11 FY12 FY13 FY14
FY10
FY11
FY12
FY13
FY14
CAGR
31%

108. 28.20
45.30
Return on Networth
42.40
50.00
40.00
30.00
20.00
10.00
• The Company’s networth increased as on 31st March, 2013-2014.
• The company reported losses in FY14 thus impacting the return on
networth.
• The returns networth declined from 29.8% to 12.8% in FY14.post
issue returns have not been attractive so far
29.80
12.80
-
FY10 FY11 FY12 FY13 FY14
FY10
FY11
FY12
FY13
FY14

109. Our opinion- Comparing Justdial &TBZ
• At the time of the issue TBZ’s PAT was more than Just dial
which is reverse in current scenario. Just dial went for the IPO
in 2011 while TBZ in 2012 and Just dial has increased its PAT 4
times since the time of the issue while TBZ is still having
problems to make it a multiple of 2 since the time of issue.
• As per quarter results 30 June 2014, Just dial has PAT of 341.5
million ₹ while TBZ has a PAT of 116.98 million ₹. TBZ s
suffering from high debt levels due to stoppage of the gold-loan
scheme. The finance cost have shot up by 47% in the FY14.
• Just Dial is growing at a much faster rate than TBZ and is good
to invest, but in the long run TBZ would prove to be a good
investment as gold prices are starting to drop.

110. Why Higher Growth?
• JUST launched more than 10 new products in the ‘Search Plus’,
which currently has 85,000 sign-ups (12,500 in restaurants,
20,000 in grocery, 20,000 in healthcare and balance in other
categories).
• The initial response to JD Search Plus has been encouraging,
with recordings of more than 1,000 orders per day in order food,
250+ doctor’s appointment per day and 350+restaurant table
bookings per day.
• Management guided that it plans to incur one-time ad spends to
create a viral impact for these recent launches. Company plans
to start monetizing certain recent product launches in FY15

111. • Financial Front: JD has a high cash conversion ratio
(FCF/EBITDA - 92 percent over FY10-12), due to 100
percent pre-payment by paid advertisers and the low
capex intensive nature of the business.
• Growth front: As the business model continues to move
more towards non-linearity through increased
penetration in the high growth internet and mobile
internet platform, JD should see expansion of operating
margins and strong growth in earnings.
• As the Company has no debt on its Balance Sheet, there
is no interest burden on the Company which makes it
more attractive for investment

112. DISCLOSURE 11 - LITIGATIONS
SEBI Requirements-
• Outstanding litigations involving the promoter and group companies
1] All pending litigations in which the promoters are involved, defaults
to the financial institutions/ banks,, shall be listed in the prospectus
together with the amounts involved and the present status of such
litigations/ defaults. The likely adverse effect of these litigations/
defaults, etc. on the financial performance of the issuer company shall
also be mentioned.
2] Further, the cases of pending litigations, defaults, etc. in respect of
companies/ firms/ ventures with which the promoters were associated
in the past but are no longer associated shall also be disclosed in case
their name(s) continues to be associated with particular litigation(s).

113. TBZ
• Litigation against the Company
SR.
NO.
NATURE OF CASES
NO. OF
OUTSTANDING
CASES
AMOUNT INVOLVED (IN
MILLION)
1 Property
Proceedings
1 Not ascertainable
2 Labour Proceeding 1 Not ascertainable
3 Tax Proceeding
4 4.98
• Litigation against Subsidiaries
SR.
NO.
NATURE OF
CASES
NO. OF OUTSTANDING
CASES
AMOUNT INVOLVED (IN
MILLION)
1 Tax Proceeding
1 0.19

114. • Litigation against Directors
SR.
NO.
NAME OF
DIRECTORS
NO. OF
OUTSTANDING CASES
AMOUNT INVOLVED (IN
`MILLION)
1 Ajay mehta 2 Not ascertainable
• An adverse outcome in any of these proceedings
may affect the reputation and standing and could
have an adverse effect on business, financial
condition and results of operations.

115. JUST DIAL
• Litigations Against the Company
NATURE OF LITIGATION
NUMBER OF OUTSTANDING
LITIGATION
AMOUNT INVOLVED
(RS. IN MILLION)
Criminal Cases 3 -
Civil Cases 3 0.2
Consumer Complaints 14 1.9
Income Tax 8 14.8
ESI Act 1 6.5
Employees Compensation
1 0.2
Act
Notices 66 15.7
Other Proceedings 1 -
Past penalties 1 0.2

116. • Litigations against the Directors
NAME OF DIRECTOR
NATURE OF LITIGATION NUMBER OF
LITIGATION
AMOUNT INVOLVED
(RS. IN MILLIONS)
V.S.S. Mani
Consumer Complaint 2 1.1
Criminal Cases 3 -
Income Tax 2 1.6
Notices 3 2.7
Sanjay Bahadur Consumer complaints 1 0.8
Criminal Cases 1 -
Excise cases 2 -
Ramani Iyer Consumer Complaints 1 0.8
Criminal Cases 1 -
V. Krishnan Consumer Complaints 1 0.8
Criminal Cases 1 -
Ravi Adusumalli Consumer Complaints 1 0.8
Criminal Cases 1 -
B. Anand Consumer Complaints 1 0.8
Criminal Cases 1 -
Malcom Monterio Consumer Complaints 1 0.8
Criminal Cases 1 -
Shailendra Jit Singh Consumer Complaints 1 0.8
Criminal Cases 1 -

117. OUR OPINION-
• TBZ’S promoters are not involved in any litigation. Also
the total number of litigations and the risk of business
getting affected is far less.
• Ajay Mehta is involved in a criminal case for obtaining
ammonia at a discount. The matter is still pending.
• In the case of justdial a number of litigations against the
company and the promoters have been filed involving
cheating etc
• Thus on comparison , based on the number of litigations
and their grievousness Company TBZ holds a better stand
than that of Just Dial and hence would be fair enough to
invest into TBZ on this basis .

118. DISCLOSURE 12: IPO GRADING
• SEBI Requirements-
• No unlisted company shall make an IPO of equity shares or any
other security which may be converted into or exchanged with
equity shares at a later date.
(i) the unlisted company has obtained grading for the IPO from at
least one credit rating agency;
(ii) disclosures of all the grades obtained, along with the
rationale/ description furnished by the credit rating agency(ies)
for each of the grades obtained, have been made in the
Prospectus (in case of fixed price issue) or Red Herring
Prospectus (in case of book built issue); and
(iii) the expenses incurred for grading IPO have been borne by
the unlisted company obtaining grading for IPO.)

119. JUSTDIAL
• CRISIL has assigned CRISIL IPO grade ‘5/5’
• This grade indicates that the fundamentals of the IPO are strong
relative to other listed equity securities in India.
• Just Dial- the first phone-based search engine in India.
• The assigned grade takes into account Just Dial’s huge local search
database (9.0 mn products and service providers), and a business
model, difficult to replicate.
• Its search volume has grown multi-fold courtesy quick service, relevant
search results, updated database and technology, leading to a strong
brand image.
• It has successfully grown its paid campaigns by more than four times
over FY09-12 to 171,000 in end-FY12 (195,100 in 9MFY13) and enjoys
100% advance payments from its clients, who are mostly micro, small
and medium enterprises (MSMEs).

120. • Maintaining management bandwidth to oversee the
growth will be a challenge, in the expansion in US and
Canada through a different promoter entity.
• Just Dial has grown its revenues at a four-year CAGR
of 39% to ₹2,621 mn in FY12 and improved its PAT
margin to 20% in FY12 from 2.4% in FY08.
• Accordingly, RoE improved to 53.6% in FY12 from
6.7% in FY08. It reported EPS of ₹9.4 in FY12. The
company is debt-free with a negative working capital
cycle

121. TBZ
• CRISIL has assigned a CRISIL IPO grade of ‘3/5’
• This grade indicates that the fundamentals of the IPO are
average relative to other listed equity securities in India.
• The grade factors in the resilience of demand for gold jewellery
in India despite a significant rise in gold prices, 28% y-o-y in
2011, which has added shine to TBZ’s top line. Compared to
other gold jewellery players, TBZ’s revenue mix leans towards
higher-margin diamond jewellery.
• The grade is restrained by competition is likely intensify
following planned expansions by regional/traditional players.
TBZ too plans to expand to 22 stores by end-FY13 at a faster-than-
ever pace, which could throw up execution challenges even
though its strategies are in place.

122. • Opening of new stores will also put pressure on profitability due
to higher marketing expenses and working capital requirement.
• Tribhovandas Bhimji Zaveri brand being used by other Zaveri
family members, the risk of brand dilution cannot be ignored,
especially if they underperform on quality.
• TBZ’s revenues increased at 40% CAGR between FY08 -11 to
Rs 11.9 bn, largely driven by branch additions and a steady
increase in gold prices.
• A higher proportion of diamond-studded jewellery has
supported 6-7% EBITDA margin in a competitive market.
EBITDA increased at a CAGR of 52% over FY08-11. During the
same period, PAT increased at a CAGR of 74% and was Rs 394
mn in FY11.

123. Our Opinion-
• An IPO grade of 5/5 makes just dial IPO very attractive
to invest.
• Rating is not a signal to buy or sell a company. It just
gives the overview of the business.
• Just Dial displays a strong fundamentals and TBZ holds
relatively weaker fundamentals. Hence it would better to
invest in a company which holds strong fundamentals
there by making Just dial viable for Investment.
• But we do feel a 5/5 rating was a very high and
overvalued rating whereas TBZ was given a fair rating.

124. DISCLOSURE 13- ELIGIBILITY FOR
THE ISSUE
SEBI Requirements :
• An unlisted company needs to satisfy following criteria to be
eligible for making a public issue:
a) Net tangible assets of at least Rs 3 crore for three full years
b) Distributable profits in at least three years
c) Net worth of at least Rs 1 crore in three years
d) If change in name, at least 50 per cent of revenue for
preceding one year should be from the new activity
e) The issue size should not exceed five times the pre-issue net
worth
f) SEBI also provides alternate routes to the companies not
satisfying any of the above parameters, for accessing the
primary market.

125. • The alternative conditions are as follows:
a) Issue shall be made through book-building
route, with at least 50 per cent to be mandatory
allotted to the QIBs
b) The minimum post-issue face value capital shall
be Rs 10 crore or there shall be a compulsory
market-making for at least two years.

126. TBZ
• The Company is eligible for the Issue in accordance with Regulation 26
(1) of the SEBI Regulations as explained under the eligibility criteria
calculated in accordance with financial statements under Indian GAAP:
• It has net tangible assets of at least ` 30 million in each of the preceding
three full years (of 12 months each), of which not more than 50% are
held in monetary assets.
• The Company has a track record of distributable profits for at least three
of immediately preceding five years on a standalone basis, and has net
profits on a consolidated basis for Fiscals 2010 and 2011.
• The Company has a net worth of at least ` 10 million in each of the three
preceding full years (of 12 months each);
• The aggregate of the proposed Issue and all previous issues made in the
same financial years in terms of the issue size is not expected to exceed
five times the pre-Issue net worth of the Company; The Company has
not changed its name in the last one year

127. JUSTDIAL
• They are complying with Regulation 26(2) of the SEBI
Regulations and at least 75% of the Offer is proposed to be
Allotted to QIBs and in the event we fail to do so, the full
application monies shall be refunded to the Bidders.
• Non-Institutional Bidders and Retail Individual Bidders
will be allocated not more than 15% and 10% of the Offer,
respectively
• Hence, they are eligible for the Offer under Regulation
26(2) of the SEBI Regulations.
• The Company shall ensure that the number of prospective
Allottees to whom the Equity Shares will be allotted shall
not be less than 1,000 failing which the entire application
money shall be refunded.

128. DISCLOSURE 14- ALLOTMENT OF
SHARE
• Sebi Requirement
• For book building process:
• Qualified institutional buyers – at least 50% of the net
issue being allotted. However upto 5% of the net QIB
portion shall be available for allocation proportionately to
mutual funds only.
• Non institutional bidders – not less than 15% of the net
issue or the net issue less allocation to QIBs and retail
institutional bidders.
• Retail individual investors - Not less than 35% of the net
issue or the net issue less allocation QIBs and non
institutional bidders.

129. JUSTDIAL
• At least 75% of the Offer shall be Allotted on a
proportionate basis to QIBs.
• The Offer received 155,879 applications for 158,800,243
Equity Shares resulting in 9.08 times subscription.
• Public offer -17,497,458 equity shares
• Price -₹ 530 per equity share for QIB and non institutional
bidders
• Price - ₹ 483 per equity share for retail individual bidders
aggregating up to rs. 9,191.41 million (the "offer").
• A discount of rs. 47 per equity share has been offered to
retail individual bidders

130. TBZ ALLOTMENT OF SHARES
• Not more than 50% of the Issue was allocated on a
proportionate basis QIB.
• Public issue - 16,666,667 equity shares
• Price -₹120 per equity share aggregating to rs. 2,000
million (the "issue").
• The Issue received 7,252 applications for 19,474,470 equity
shares resulting in 1.17 times subscription

131. OUR ANALYSIS
• The justdial IPO was a successful one as it got
oversubscribed by 9.09 times.
• Nonetheless, TBZ was fairly oversubscribed by 1.17% as
it received 7,252 bid applications as compared to 155,879
applications in justdial.
• The overall investor participation was seen much more
higher for just dial as compared to TBZ.
• When an issue is oversubscribed shares are being alloted
on proportionate basis and lottery system is used.

132. DISCLOSURE15- SAFETY NET
Why a safety net?
• Out of 117 scripts listed during 2008 to 2011 , 72 were
trading below the Issue price after 6-months of their
listing.
• The sentiments of the investors would get affected and
they may lose confidence in the capital market.
• So to protect the interest of RII’s safety net was introduced
in 2012.

133. Safety Net Trigger
• In cases where the price of the shares depreciate by more
than 20% from the issue price for a period of 3 months
from the date of listing.
Illustration-1
• Assume listing price for share is Rs. 100 and market index
on listing date is 1000.
• After 3 months, volume-weighted average market price of
the shares is Rs. 79 (drop of 21%) and the market index is
1000 (drop of 0%). The Safety Net provision will trigger
since relative fall of 21% (21%-0%) is more than 20%
trigger level.

134. Safety Net Trigger
• The 20% depreciation in share price shall be considered
over and above the general fall, if any, in market index.
Illustration-2
• Assume listing price for share is Rs. 100 and market index
on listing date is 1000.
• After 3 months, volume-weighted average market price of
the shares is Rs. 79 (drop of 21%) and the market index is
900 (drop of 10%).
• The Safety Net provision will not trigger since relative fall
of 11% (21%-10%) is less than 20% trigger level

135. JUSTDIAL SAFETY NET
• Retail investors that apply for less than 200,000 rupees
worth shares get a safety net.
• After 180 days, if the volume weighted average price
(VWAP) for the previous 60 days is less than the retail
issue price, the promoter brothers will buy the shares from
you and return your money if you want.

136. AFTER LISTING
• The ‘safety net’ option for Just Dial Ltd was redundant in
less than two months of listing.
• Over 95 per cent of the retail investors, who had received
allotment through the IPO, had exited, Following a sharp
40 per cent run-up in the share price of the company since
its listing.
• The company released nearly Rs 80 crore from its escrow
as the safety net was not exercised.

137. Recent developments
• In sep 2013, Sebi decided to let go of a proposal to
introduce a safety net for retail investors in IPO’s due to
the stiff resistance by investment bankers.
• A new price stabilising mechanism will be introduced on
the lines of market- making.
• Two new conditions for the offer documents to get cleared-discount
to peer group prices and a special discount for
retail investors

138. DLF CASE- INADEQUATE DISCLOSURE
IN IT’S IPO

139. • DLF has estimated it may face a financial liability of up to
Rs 100 crore for the various legal cases.
• In 2011, A Delhi-based businessman, Kimsuk Krishna
Sinha, had alleged that the KP Singh-controlled company
had intentionally made a false statement.
• The Sebi investigation shows that Sudipti Estates is part of
the DLF group.
• A criminal liability can be imposed on DLF

140. THE VERDICT
• Investors dumped DLF shares after market regulator Securities and
Exchange Board of India (Sebi) barred the company and its six
executives from accessing capital markets for 3 years.
• The STOCK fell as much as 24.2 percent intraday on 13th october
2014.
• Brokerages believe this SEBI order banning DLF is a big negative
development and may impact FUND raising plans and listing of
REITs but they are hopeful of some resolution.
• finally, SEBI took a swift decision and acted as a regulator and gave
a clear signal to all the others that such misleading disclosures in
the prospectus will not be tolerated

141. THE BOTCHED FACEBOOK IPO
In May 2012 Facebook initial public offering
Initial share price at $38.00
after the company’s first full day of TRADING
Facebook was down $4.00 per share and back to its
issue price
continued to slide in subsequent weeks and months of TRADING

142. Facebook's management and investment bankers
were sharply criticized by investors
for
dramatically
raising both the price and the size of the company's IPO
at the 11th hour
Morgan Stanley cut Facebook’s future revenue estimates before
Facebook increased its initial share price from $34 to $38 per
share
pulled this move to tip insiders off to sell their shares on the first
day of trading, knowing that they would be bought up by eager
retail investors looking to invest in Facebook.
This led to shares being traded roughly flat on its first
day, it fell by 50% in its first four months of public
trading

143. For simultaneously tipping off insiders to sell their shares while
pumping up retail investor demand for Facebook

144. RECOMMENDATIONS
• Money can be made in IPOs, but the focus should shift
from the QUICK BUCK to the long-term outlook.
• One should not put all their faith in IPO document, and
should never skip reading the disclosures mentioned in
IPO documents.
• Also reading the projected accounting figures carefully.
• Investors should be cautious while investing .
• Investors in IPOs should look at the growth the company
and the industry in which it is operating in.
• “STAY AWAY FROM TIPS”

145. CONCLUSION
• Disclosures say a lot about the company bringing the IPO.
• The above mentioned disclosures are very critical for the
investor’s point of view.
• A rosy picture of the company on paper is not always the
real situation
Example-Facebook IPO.
Therefore , invest in an IPO only after analyzing its
disclosures well

146. • Thank you