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Initial public offer
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- 2. IPO An IPO isan initial public offering. In an IPO, a privately owned company lists its shares on a stock exchange for the first time, making them available for purchase by the general public. .
- 3. NEED FOR IPO •Means of raising capital or boosting a company’s public profile. • The proceeds may be used to expand the business, fund research and development or pay off debt. • Other avenues for raising capital, via venture capitalists, private investors, or bank loans, may be too expensive. • Provide companies with a huge amount of publicity.
- 4. 1. It musthave a pre-issue net worth of not less than Rs. 10,000,000 (Rupees One crore) in 3 out of the preceding 5 years, with a minimum net worth to be met during the 2 immediately preceding years. 2. It must have a track record of distributing dividends for at least 3 out of the immediately preceding 5 years, and 3. The issue size, i.e., the offer through the offer document, the firm allotment and the promoter’s contribution through the offer document, should not exceed five times the pre-issue net worth as per the last available audited account, either at the time of filing the draft offer document with the Securities and Exchange Board of India (“SEBI”) or at the time of opening of the issue. • If the above conditions are not satisfied, then the IPO can be made only through a book-building process, provided that sixty percent (60%) of the issue size must be allotted to Qualified Institutional Buyers (“QIBs”). SEBI guidelines for IPO
- 5. PROCESS OF IPO STEP Hirean investment bank 01 STEP IPO is priced 04 STEP Register with SEBI and Draft the Red Herring document 02 STEP Available to public 05 STEP Go on a road show 03 STEP Going through with the IPO 06
- 6. ROLE OF INVESTMENT BANKERIN AN IPO PROCESS Underwriting New Stock Issues - Underwriting basically involves the investment bank purchasing an agreed-upon number of shares of the new stock, which it then resells through a stock exchange Financial Advisory - Investment banks offer corporations advice on taking the company public or raising capital through alternative means. Mergers and Acquisitions - An investment bank evaluates the worth of an acquisition and arrive at a fair price. An investment bank can also help structure and facilitating the acquisition to make the deal go as smoothly as possible
- 7. SUPPORT SYSTEM IN IPO •Lockup • Quiet Periods • Follow-on and secondary offerings • GreenShoe Option
- 8. About the FutureX-Upcoming technological company based on research and innovation. No of Promoters-4 Capital Requirement-1000 Cr Application of raised funds- 1.Expantion 2.Meet the working Capital Requirement. 3.Research and Development. 4.New acquisitions in the future. CLIENT COMPANY- FUTUREX
- 9. FutureX IPO Offer Date24 – 26 May Price Band Rs. 100 – 110 per Share Minimum Application 10 Shares Face Value Rs. 10 Reserved for QIB 50% Reserved for Non Institutional Bidders 15% Reserved for retail 35% Total Amount to be raised Rs. 1000 Crore Total No. Of Share on sale 1 billion Got BID for 1.62 billion Subscribed by 1.15 times
- 10. Share holding patternpost IPO 74.17 % 11.85 % 3.17 % 10.81 % % Promoter holding FII DII Others
- 11. No. of timesissue is subscribed 1.29 1.91 0.68 1.16 Subscribed by Qualified Institutional Buyers Non Institutional Investors Retail Investors Anchor Investors
- 12. LISTING PROCESS Assess existing governance frameworkto ensure that it is in line with regulatory requirements. Consolidate financial statements in the form and shape as required for a listed company. Reassess its historical financial statements and reports issued by its auditors. Align reporting and legal entity structure. 1 2 3 4
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