This document provides an overview of initial public offerings (IPOs) in India, including the key regulations and processes involved. It discusses the various options for raising funds in India, both from domestic sources like banks and financial institutions as well as international sources. The main reasons companies pursue IPOs are to fund growth initiatives, strengthen their balance sheet, and provide liquidity to shareholders. Key regulations governing IPOs in India include the Companies Act, Securities Contract Regulation Act, and regulations established by the Securities and Exchange Board of India. The document outlines the eligibility criteria, pricing guidelines, minimum promoter contribution requirements, and ongoing corporate governance and disclosure obligations for companies pursuing an IPO.
The document provides information on initial public offerings (IPOs) in India, including the various regulations and processes involved. It discusses the reasons companies pursue IPOs, such as funding growth initiatives or enhancing corporate profile. Key details covered include relevant regulations from the Companies Act, Securities Contract Regulations Act, and SEBI guidelines. The roles of intermediaries in the IPO process are defined. Disclosures required in the offer document like the capital structure, objects of the issue, business overview, and financial statements are also outlined.
The document provides an overview of the key requirements for a first time issuer of securities conducting an initial public offering (IPO) in India. It discusses the eligibility criteria set by SEBI, including minimum public shareholding, promoters' contribution and lock-in period, pricing considerations, and issue structure. It also outlines the corporate governance requirements, disclosures required in the offer document, and the roles of various intermediaries involved. Special dispensations provided to public sector undertakings conducting an IPO are also highlighted.
The document discusses the key aspects of an initial public offering (IPO) process in India. It defines primary and secondary markets and the key differences between them. It then explains the IPO process in detail, including the various methods of raising funds, applicable regulations, roles of intermediaries, necessary disclosures and internal approvals required from a company's board and shareholders.
The document discusses SEBI regulations regarding listing of startups and SMEs on stock exchanges without an IPO. It provides details on:
1) Norms that allow tech startups to list on institutional trading platforms or SME exchanges if they meet criteria like a minimum percentage of shares held by qualified institutional buyers.
2) Requirements for SME listings on different stock exchanges including criteria like net tangible assets, track record, and minimum number of shareholders.
3) Provisions for migration of listed companies between SME exchanges and the main board and exit from institutional trading platforms.
The document provides information on listing small and medium enterprises (SMEs) on stock exchanges in India. It discusses the SEBI regulations for SME listings, eligibility norms for listing on the BSE and NSE SME exchanges, key features of SME listings including relaxed eligibility criteria and disclosure requirements. It also outlines the process for SME listings including pre-IPO preparations, due diligence, offer document preparation, appointment of intermediaries, the IPO process, and obtaining a listing. Some practical difficulties that may arise during an SME listing like non-compliance with regulations and lack of documentation are also discussed along with solutions.
The document provides an overview of India's primary equity market. It discusses key aspects like the primary market itself, ways to issue equity capital, intermediaries involved, eligibility norms set by SEBI, and lock-in requirements for promoters' shares. It also covers the green shoe option, IPO grading process, and escrow accounts maintained during public issues. The primary market allows companies to issue securities to the public for the first time via methods like initial public offerings and rights issues.
Critical IPO disclosures in a prospectus and comparison of JustDial and TBZ IPOtwinkle Chhadwa
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.
The document discusses investment opportunities in Indian small and medium enterprises (SMEs). It notes that SMEs play a vital role in India's economic growth and job creation. Listing on SME stock exchanges can help companies access capital, increase visibility, and attract new investors. The requirements for SME listings are more relaxed than the main board, with lower capitalization thresholds and reporting obligations. Listing provides benefits like financing options, tax incentives, and improving corporate governance.
The document provides information on initial public offerings (IPOs) in India, including the various regulations and processes involved. It discusses the reasons companies pursue IPOs, such as funding growth initiatives or enhancing corporate profile. Key details covered include relevant regulations from the Companies Act, Securities Contract Regulations Act, and SEBI guidelines. The roles of intermediaries in the IPO process are defined. Disclosures required in the offer document like the capital structure, objects of the issue, business overview, and financial statements are also outlined.
The document provides an overview of the key requirements for a first time issuer of securities conducting an initial public offering (IPO) in India. It discusses the eligibility criteria set by SEBI, including minimum public shareholding, promoters' contribution and lock-in period, pricing considerations, and issue structure. It also outlines the corporate governance requirements, disclosures required in the offer document, and the roles of various intermediaries involved. Special dispensations provided to public sector undertakings conducting an IPO are also highlighted.
The document discusses the key aspects of an initial public offering (IPO) process in India. It defines primary and secondary markets and the key differences between them. It then explains the IPO process in detail, including the various methods of raising funds, applicable regulations, roles of intermediaries, necessary disclosures and internal approvals required from a company's board and shareholders.
The document discusses SEBI regulations regarding listing of startups and SMEs on stock exchanges without an IPO. It provides details on:
1) Norms that allow tech startups to list on institutional trading platforms or SME exchanges if they meet criteria like a minimum percentage of shares held by qualified institutional buyers.
2) Requirements for SME listings on different stock exchanges including criteria like net tangible assets, track record, and minimum number of shareholders.
3) Provisions for migration of listed companies between SME exchanges and the main board and exit from institutional trading platforms.
The document provides information on listing small and medium enterprises (SMEs) on stock exchanges in India. It discusses the SEBI regulations for SME listings, eligibility norms for listing on the BSE and NSE SME exchanges, key features of SME listings including relaxed eligibility criteria and disclosure requirements. It also outlines the process for SME listings including pre-IPO preparations, due diligence, offer document preparation, appointment of intermediaries, the IPO process, and obtaining a listing. Some practical difficulties that may arise during an SME listing like non-compliance with regulations and lack of documentation are also discussed along with solutions.
The document provides an overview of India's primary equity market. It discusses key aspects like the primary market itself, ways to issue equity capital, intermediaries involved, eligibility norms set by SEBI, and lock-in requirements for promoters' shares. It also covers the green shoe option, IPO grading process, and escrow accounts maintained during public issues. The primary market allows companies to issue securities to the public for the first time via methods like initial public offerings and rights issues.
Critical IPO disclosures in a prospectus and comparison of JustDial and TBZ IPOtwinkle Chhadwa
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.
The document discusses investment opportunities in Indian small and medium enterprises (SMEs). It notes that SMEs play a vital role in India's economic growth and job creation. Listing on SME stock exchanges can help companies access capital, increase visibility, and attract new investors. The requirements for SME listings are more relaxed than the main board, with lower capitalization thresholds and reporting obligations. Listing provides benefits like financing options, tax incentives, and improving corporate governance.
This document summarizes the key regulations around initial public offerings (IPOs) and further public offerings (FPOs) in India as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018. It outlines the eligibility criteria for issuers, promoters and directors. It also describes the important aspects of pricing, offer documents, advertising, underwriting, minimum subscription levels, allotment process and post-issue requirements. Key points include minimum net worth, profit and asset requirements for issuers, lock-in periods for promoter shares, minimum 90% subscription threshold and proportionate allotment to retail and non-anchor investors.
This document provides an overview of the IPO and FPO process in India. It defines IPO as the first sale of stock by a company to the public and FPO as when an already listed company makes a fresh issue of securities or an offer for sale. The key steps in the IPO process are Board approval, filing documents with SEBI and exchanges, IPO grading, setting the price band, book building, allotment and issuing the final prospectus. Intermediaries that help facilitate the process include merchant bankers, underwriters, syndicate members, registrars and bankers to the issue. The document also outlines SEBI regulations around eligibility criteria, minimum public shareholding and lock-in periods for IPOs and
It provides a comprehensive analysis of the SEBI Invetsor Protection Guideline 2000 from the point of view of the companies. It covers offer documents, exceptions, price discovery, green shoe option, e-IPO, etc.
This document discusses the process and requirements for small and medium enterprises (SMEs) to conduct an initial public offering (IPO) and get listed on the SME stock exchange in India. It covers the stages of SME fundraising and growth, benefits of listing, criteria for listing, roles of intermediaries like merchant bankers, listing procedures and timelines. Key requirements include a post-issue paid up capital of less than Rs. 2500 lakh, a track record of over 3 years, and appointment of merchant bankers to undertake activities like due diligence, offer document preparation, and market making for 3 years post-listing. The overall process takes around 3-4 months from initial preparation to final listing on the exchange.
The document summarizes a webinar on the regulatory framework for initial public offerings (IPOs), rights issues, private placements, and alternative investments in Bangladesh. It outlines the types of companies, relevant capital market laws, eligibility criteria for different capital raising methods, and post-issue requirements. The key points are:
1) BSEC regulates Bangladesh's capital market and has laws for different types of private and public companies.
2) Eligibility for IPOs, rights issues, and private placements includes minimum paid-up capital, profitability, and post-issue promoter shareholding.
3) The process involves appointing advisors, issuing a prospectus, allotting shares, and complying
This document outlines the eligibility criteria, process, and regulations for companies seeking to list securities on the SME exchange in India. Key points include:
- To be eligible, a company must have a minimum net worth and tangible assets, distributable profits for the last two of three years, and a post-issue paid up capital of at least Rs. 3 crore.
- The process involves pre-IPO restructuring, preparing offering documents, due diligence, and listing compliance. The issue must be 100% underwritten by the merchant banker.
- Regulations are less stringent than for the main board, with no minimum application value or requirements to file certain documents with SEBI. Companies can migrate
The document provides information on initial public offerings (IPO) and their requirements in India. Some key points:
- An IPO is when a company issues shares to the public for the first time. There are two main methods - fixed price and book building.
- Qualified institutional bidders (QIBs) make up 50% of shares in a book build IPO. Retail investors can apply for up to Rs. 2 lakhs worth of shares.
- Promoters must contribute at least 20% of the post-issue capital in an IPO. This contribution is locked in for 3 years along with any excess over 20%. Other pre-issue capital is locked in for
The document discusses various considerations and requirements for companies seeking to conduct an initial public offering (IPO) and become publicly listed on Bursa Malaysia, the stock exchange of Malaysia. It outlines the quantitative criteria such as operating history, profitability, market capitalization, and public shareholder requirements that companies must meet to qualify for listing on the Main Market or alternative ACE Market. Additional qualitative criteria and processes such as management experience, core business operations, and regulatory approvals are also discussed. The document also separately addresses requirements for foreign companies seeking a primary or secondary listing in Malaysia and listings of special purpose acquisition companies.
Fundraising through SME Exchange Platform Sumedha Fiscal
This document discusses the process of fundraising through an SME exchange platform. It begins with an overview of the stages of SME fundraising and the chronicle of SME exchanges in India. It then discusses some of the key challenges SMEs face in listing, the benefits of listing, eligibility criteria, and the roles of merchant bankers. It provides details on the listing procedure and getting prepared for listing. It also compares SME exchanges to the main board and discusses important post-listing considerations like corporate governance. Finally, it outlines the typical stages involved in an SME IPO process.
The document discusses primary markets and the process of issuing securities through an initial public offering (IPO). It describes how companies can raise funds through public offers, rights issues, follow-on offers, and private placements in the primary market. The steps of an IPO include appointing merchant bankers, drafting a prospectus, fulfilling regulatory norms, marketing the issue, and listing the securities on a stock exchange. Requirements for listing include minimum market capitalization, issue size, and post-issue paid up capital. The document outlines various pricing methods and guidelines for listing on an exchange.
The document outlines SEBI guidelines for initial public offerings (IPOs) in India. Some key points include:
1) IPOs under 5 crores must go through OTCEI and have separate guidelines.
2) The public issue must be at least 25% of the total issue (10% for IT/media/telecom with conditions).
3) Promoters must contribute 20-25% before the issue and have a 5-year lock-in period.
4) There must be at least 30 collection centers including major stock exchange cities.
5) The net public offer must be at least 25% of total issue size for stock exchange listing.
The document provides an overview of the Indian securities market, including its key participants and functions. It discusses the primary market where companies first issue securities, and the intermediaries involved such as merchant bankers. It also covers the secondary market, how trading works on the exchanges through order matching systems, and the clearing and settlement process where obligations are calculated and funds and securities are transferred.
The document provides an overview of the process and guidelines for an Initial Public Offering (IPO) by Nureca Limited, an Indian healthcare company. It discusses the key steps in the IPO process including compliance with SEBI guidelines, drafting the prospectus, receiving necessary approvals, opening subscription, allotment of shares, and post-issue compliance. It also outlines the eligibility norms, alternative routes, and terms involved in the IPO process as well as the various parties that assist the company such as merchant bankers, registrars, bankers and underwriters.
The document provides an overview of the Karachi Stock Exchange (KSE) in Pakistan. It notes that as of 2013, there were 652 listed companies with a total market capitalization of $53.3 billion. It also lists the major participants in the KSE market such as local and foreign investors, mutual funds, institutions, and banks. Requirements for listing on the KSE are also summarized, including a minimum paid-up capital of 10 million Pakistani rupees and a minimum public offering of 5 million rupees or 25% of capital. Fees for initial and annual listing on the KSE are also outlined.
The document provides an overview of the Karachi Stock Exchange (KSE) in Pakistan. It notes that as of 2013, there were 652 listed companies with a total market capitalization of $53.3 billion. It also lists the major participants in the market such as local and foreign investors, mutual funds, and institutions. Requirements for listing on the KSE are also summarized, including a minimum paid-up capital of 10 million Pakistani rupees and a minimum public offering of 5 million rupees or 25% of capital. Fees for initial listing and annual listing on the KSE are also outlined.
The document summarizes the key aspects of SEBI (ICDR) Regulations 2009, which govern public and rights issues of specified securities in India. It discusses the eligibility requirements for issuers, types of public issues, allocation process, pricing considerations, promoters' contribution and lock-in periods. It also provides an overview of recent amendments made to the regulations in areas such as book building process, minimum public shareholding, and facilitation of issues by small and medium enterprises.
This material is for PGPSE / CSE students of AFTERSCHOOOL. PGPSE / CSE are free online programme - open for all - free for all - to promote entrepreneurship and social entrepreneurship
This document provides an overview of initial public offers (IPOs) in India, including:
- IPOs allow unlisted companies to raise funds by offering shares to the public for the first time. They are an important process for transforming a company.
- Companies must be at an appropriate stage of growth and meet regulatory eligibility requirements before pursuing an IPO. The process takes at least one year to plan and execute properly.
- Key aspects of IPOs that are discussed include procedures and timelines, regulatory frameworks, eligibility requirements, pricing norms, and requirements for promoters' contributions and lock-ins. Book building and fixed price issue types are compared.
Primary markets involve the issuance of new securities. There are various types of issues like public issues, rights issues, and private placements. Public issues can be initial public offerings (IPOs) of unlisted companies or further public offerings (FPOs) of listed companies. Rights issues allot new shares to existing shareholders. Private placements issue new shares to select investors. SEBI sets eligibility norms for public issues but not rights or private placements. Eligible companies must meet requirements related to net assets, profits, and net worth. SEBI can provide exemptions from norms. Issuers must follow lock-in periods for promoter shares after IPOs. SEBI reviews public offer documents but not for private placements. Its role is
SEBI was formed to protect investors in securities markets and promote orderly development of those markets. It regulates stock exchanges, registers and regulates intermediaries like brokers, merchant bankers, and mutual funds. SEBI's functions include prohibiting market manipulation and insider trading, promoting investor education, inspecting regulated entities, and vetting public issuances. It aims to boost confidence in capital markets through strict regulation and investor protection.
Forwards contracts are agreements between two parties to buy or sell an asset at a predetermined future date and price. The buyer agrees to purchase the asset at the future date while the seller agrees to deliver it. No money changes hands until delivery. Forwards are customized bilateral contracts that expose parties to counterparty risk. Futures contracts are standardized exchange-traded contracts to buy or sell an asset at a future date and preset price. Futures are marked to market daily where gains and losses are settled to maintain margin levels and limit counterparty risk.
Byju's, once India's leading online education company, is facing multiple financial and governance issues that threaten its survival. It is struggling to raise funds due to economic downturns and scrutiny of its financial practices. Byju's has been accused of overcharging customers, misrepresenting product effectiveness, using aggressive sales tactics, and failing to deliver on promises. It faces investigations over anti-competitive behavior and unfair practices. To succeed, Byju's must address legal issues, manage debts, rebuild investor trust, and improve its competitive position in the edtech market through skillful navigation of current challenges.
This document summarizes the key regulations around initial public offerings (IPOs) and further public offerings (FPOs) in India as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018. It outlines the eligibility criteria for issuers, promoters and directors. It also describes the important aspects of pricing, offer documents, advertising, underwriting, minimum subscription levels, allotment process and post-issue requirements. Key points include minimum net worth, profit and asset requirements for issuers, lock-in periods for promoter shares, minimum 90% subscription threshold and proportionate allotment to retail and non-anchor investors.
This document provides an overview of the IPO and FPO process in India. It defines IPO as the first sale of stock by a company to the public and FPO as when an already listed company makes a fresh issue of securities or an offer for sale. The key steps in the IPO process are Board approval, filing documents with SEBI and exchanges, IPO grading, setting the price band, book building, allotment and issuing the final prospectus. Intermediaries that help facilitate the process include merchant bankers, underwriters, syndicate members, registrars and bankers to the issue. The document also outlines SEBI regulations around eligibility criteria, minimum public shareholding and lock-in periods for IPOs and
It provides a comprehensive analysis of the SEBI Invetsor Protection Guideline 2000 from the point of view of the companies. It covers offer documents, exceptions, price discovery, green shoe option, e-IPO, etc.
This document discusses the process and requirements for small and medium enterprises (SMEs) to conduct an initial public offering (IPO) and get listed on the SME stock exchange in India. It covers the stages of SME fundraising and growth, benefits of listing, criteria for listing, roles of intermediaries like merchant bankers, listing procedures and timelines. Key requirements include a post-issue paid up capital of less than Rs. 2500 lakh, a track record of over 3 years, and appointment of merchant bankers to undertake activities like due diligence, offer document preparation, and market making for 3 years post-listing. The overall process takes around 3-4 months from initial preparation to final listing on the exchange.
The document summarizes a webinar on the regulatory framework for initial public offerings (IPOs), rights issues, private placements, and alternative investments in Bangladesh. It outlines the types of companies, relevant capital market laws, eligibility criteria for different capital raising methods, and post-issue requirements. The key points are:
1) BSEC regulates Bangladesh's capital market and has laws for different types of private and public companies.
2) Eligibility for IPOs, rights issues, and private placements includes minimum paid-up capital, profitability, and post-issue promoter shareholding.
3) The process involves appointing advisors, issuing a prospectus, allotting shares, and complying
This document outlines the eligibility criteria, process, and regulations for companies seeking to list securities on the SME exchange in India. Key points include:
- To be eligible, a company must have a minimum net worth and tangible assets, distributable profits for the last two of three years, and a post-issue paid up capital of at least Rs. 3 crore.
- The process involves pre-IPO restructuring, preparing offering documents, due diligence, and listing compliance. The issue must be 100% underwritten by the merchant banker.
- Regulations are less stringent than for the main board, with no minimum application value or requirements to file certain documents with SEBI. Companies can migrate
The document provides information on initial public offerings (IPO) and their requirements in India. Some key points:
- An IPO is when a company issues shares to the public for the first time. There are two main methods - fixed price and book building.
- Qualified institutional bidders (QIBs) make up 50% of shares in a book build IPO. Retail investors can apply for up to Rs. 2 lakhs worth of shares.
- Promoters must contribute at least 20% of the post-issue capital in an IPO. This contribution is locked in for 3 years along with any excess over 20%. Other pre-issue capital is locked in for
The document discusses various considerations and requirements for companies seeking to conduct an initial public offering (IPO) and become publicly listed on Bursa Malaysia, the stock exchange of Malaysia. It outlines the quantitative criteria such as operating history, profitability, market capitalization, and public shareholder requirements that companies must meet to qualify for listing on the Main Market or alternative ACE Market. Additional qualitative criteria and processes such as management experience, core business operations, and regulatory approvals are also discussed. The document also separately addresses requirements for foreign companies seeking a primary or secondary listing in Malaysia and listings of special purpose acquisition companies.
Fundraising through SME Exchange Platform Sumedha Fiscal
This document discusses the process of fundraising through an SME exchange platform. It begins with an overview of the stages of SME fundraising and the chronicle of SME exchanges in India. It then discusses some of the key challenges SMEs face in listing, the benefits of listing, eligibility criteria, and the roles of merchant bankers. It provides details on the listing procedure and getting prepared for listing. It also compares SME exchanges to the main board and discusses important post-listing considerations like corporate governance. Finally, it outlines the typical stages involved in an SME IPO process.
The document discusses primary markets and the process of issuing securities through an initial public offering (IPO). It describes how companies can raise funds through public offers, rights issues, follow-on offers, and private placements in the primary market. The steps of an IPO include appointing merchant bankers, drafting a prospectus, fulfilling regulatory norms, marketing the issue, and listing the securities on a stock exchange. Requirements for listing include minimum market capitalization, issue size, and post-issue paid up capital. The document outlines various pricing methods and guidelines for listing on an exchange.
The document outlines SEBI guidelines for initial public offerings (IPOs) in India. Some key points include:
1) IPOs under 5 crores must go through OTCEI and have separate guidelines.
2) The public issue must be at least 25% of the total issue (10% for IT/media/telecom with conditions).
3) Promoters must contribute 20-25% before the issue and have a 5-year lock-in period.
4) There must be at least 30 collection centers including major stock exchange cities.
5) The net public offer must be at least 25% of total issue size for stock exchange listing.
The document provides an overview of the Indian securities market, including its key participants and functions. It discusses the primary market where companies first issue securities, and the intermediaries involved such as merchant bankers. It also covers the secondary market, how trading works on the exchanges through order matching systems, and the clearing and settlement process where obligations are calculated and funds and securities are transferred.
The document provides an overview of the process and guidelines for an Initial Public Offering (IPO) by Nureca Limited, an Indian healthcare company. It discusses the key steps in the IPO process including compliance with SEBI guidelines, drafting the prospectus, receiving necessary approvals, opening subscription, allotment of shares, and post-issue compliance. It also outlines the eligibility norms, alternative routes, and terms involved in the IPO process as well as the various parties that assist the company such as merchant bankers, registrars, bankers and underwriters.
The document provides an overview of the Karachi Stock Exchange (KSE) in Pakistan. It notes that as of 2013, there were 652 listed companies with a total market capitalization of $53.3 billion. It also lists the major participants in the KSE market such as local and foreign investors, mutual funds, institutions, and banks. Requirements for listing on the KSE are also summarized, including a minimum paid-up capital of 10 million Pakistani rupees and a minimum public offering of 5 million rupees or 25% of capital. Fees for initial and annual listing on the KSE are also outlined.
The document provides an overview of the Karachi Stock Exchange (KSE) in Pakistan. It notes that as of 2013, there were 652 listed companies with a total market capitalization of $53.3 billion. It also lists the major participants in the market such as local and foreign investors, mutual funds, and institutions. Requirements for listing on the KSE are also summarized, including a minimum paid-up capital of 10 million Pakistani rupees and a minimum public offering of 5 million rupees or 25% of capital. Fees for initial listing and annual listing on the KSE are also outlined.
The document summarizes the key aspects of SEBI (ICDR) Regulations 2009, which govern public and rights issues of specified securities in India. It discusses the eligibility requirements for issuers, types of public issues, allocation process, pricing considerations, promoters' contribution and lock-in periods. It also provides an overview of recent amendments made to the regulations in areas such as book building process, minimum public shareholding, and facilitation of issues by small and medium enterprises.
This material is for PGPSE / CSE students of AFTERSCHOOOL. PGPSE / CSE are free online programme - open for all - free for all - to promote entrepreneurship and social entrepreneurship
This document provides an overview of initial public offers (IPOs) in India, including:
- IPOs allow unlisted companies to raise funds by offering shares to the public for the first time. They are an important process for transforming a company.
- Companies must be at an appropriate stage of growth and meet regulatory eligibility requirements before pursuing an IPO. The process takes at least one year to plan and execute properly.
- Key aspects of IPOs that are discussed include procedures and timelines, regulatory frameworks, eligibility requirements, pricing norms, and requirements for promoters' contributions and lock-ins. Book building and fixed price issue types are compared.
Primary markets involve the issuance of new securities. There are various types of issues like public issues, rights issues, and private placements. Public issues can be initial public offerings (IPOs) of unlisted companies or further public offerings (FPOs) of listed companies. Rights issues allot new shares to existing shareholders. Private placements issue new shares to select investors. SEBI sets eligibility norms for public issues but not rights or private placements. Eligible companies must meet requirements related to net assets, profits, and net worth. SEBI can provide exemptions from norms. Issuers must follow lock-in periods for promoter shares after IPOs. SEBI reviews public offer documents but not for private placements. Its role is
SEBI was formed to protect investors in securities markets and promote orderly development of those markets. It regulates stock exchanges, registers and regulates intermediaries like brokers, merchant bankers, and mutual funds. SEBI's functions include prohibiting market manipulation and insider trading, promoting investor education, inspecting regulated entities, and vetting public issuances. It aims to boost confidence in capital markets through strict regulation and investor protection.
Forwards contracts are agreements between two parties to buy or sell an asset at a predetermined future date and price. The buyer agrees to purchase the asset at the future date while the seller agrees to deliver it. No money changes hands until delivery. Forwards are customized bilateral contracts that expose parties to counterparty risk. Futures contracts are standardized exchange-traded contracts to buy or sell an asset at a future date and preset price. Futures are marked to market daily where gains and losses are settled to maintain margin levels and limit counterparty risk.
Byju's, once India's leading online education company, is facing multiple financial and governance issues that threaten its survival. It is struggling to raise funds due to economic downturns and scrutiny of its financial practices. Byju's has been accused of overcharging customers, misrepresenting product effectiveness, using aggressive sales tactics, and failing to deliver on promises. It faces investigations over anti-competitive behavior and unfair practices. To succeed, Byju's must address legal issues, manage debts, rebuild investor trust, and improve its competitive position in the edtech market through skillful navigation of current challenges.
Marginal costing and absorption costing are two methods used to ascertain product costs. Marginal costing only includes variable costs in product costs, while absorption costing includes both fixed and variable costs. Key terms in marginal costing include variable costs, fixed costs, marginal costs, contribution, and break-even point. Formulas are provided to calculate metrics like profit-volume ratio, break-even point, margin of safety, and profits at different production levels using marginal cost principles. Limiting factors that can restrict growth, like material shortages or lack of capacity, are also discussed.
Derivatives are financial contracts whose value is based on an underlying asset such as a commodity, currency, or stock. There are several types of derivatives including futures, forwards, options, and swaps. Derivatives are traded both over-the-counter (OTC) between private parties and on exchanges. Derivatives help transfer risk, discover prices, catalyze business activity, and increase savings and investment over the long run. Participants in derivatives markets include hedgers seeking to reduce risk, speculators betting on price movements, and arbitrageurs looking to profit from price discrepancies.
The document discusses various aspects of derivatives markets, including defining what a derivative is, the functions of derivatives markets, participants in derivatives markets, and classifications of different types of derivatives contracts. It provides details on over-the-counter derivatives markets and exchange-traded derivatives markets. It also defines key terms related to forwards, futures, swaps, and options contracts.
This document discusses various tax considerations related to managerial decisions such as expenses allowed as deductions, treatment of losses, replacement of assets, make or buy decisions, sale of assets used for scientific research, and owning or leasing assets. It provides details on tax provisions and calculations for comparing options. For example, when deciding between owning and leasing an asset, it recommends calculating the present value of post-tax cash outflows for both options and selecting the one with the lower present value. The document also includes an example problem comparing the options of purchasing an asset with borrowed funds versus leasing it.
This document discusses inventory valuation methods. It defines inventory as assets held for sale, in production, or as materials. The key inventory valuation methods are periodic, which counts inventory annually, and perpetual, which counts continuously. Cost flow methods like FIFO and LIFO assign costs based on assumed flow of goods. FIFO uses oldest costs first while LIFO uses newest costs first. Weighted average assigns an average cost. The methods impact profit differently based on price trends. International standards require lower of cost or net realizable value for valuation.
The document provides an overview of various methods for analyzing financial statements, including horizontal analysis, vertical analysis, common-size statements, trend percentages, and ratio analysis. It provides examples of each type of analysis using sample financial statement data from fictional companies. Horizontal analysis involves calculating dollar or percentage changes in items from one period to the next. Vertical analysis expresses each financial statement item as a percentage of a total. Trend percentages show changes over time. Ratio analysis expresses logical relationships between financial statement items.
This document contains a quiz on accounting concepts with 9 multiple choice questions. It tests understanding of concepts like matching principle, revenue recognition, accounting period concept, and realization concept. It also has questions about basic accounting elements like journals, trial balance, and financial statements. The quiz is divided into 3 rounds with 3 questions each to comprehensively assess knowledge of fundamental accounting principles and practices.
The document discusses various terms related to initial public offerings (IPOs) in India. It defines acronyms like FPO, RII, NII, QIB, ASBA, and SCSB. It describes the different types of offering documents used for public issues, rights issues, qualified institutional placements, and shelf registrations. It outlines the entry norms, pricing methods, and timeline for listing shares post-issue for companies undertaking IPOs on Indian stock exchanges.
The document discusses the determination of residential status and its significance for tax liability in India. It outlines the different types of residential statuses (ordinarily resident, resident but not ordinarily resident, non-resident) for individuals, HUFs, firms, companies and others. It also examines how residential status impacts whether income earned in or outside India is taxable, depending on whether the income accrues or arises in India. The relationship between residential status, scope of tax and incidence of tax for different entities is also summarized.
The document discusses India's Goods and Services Tax (GST) policies and regulations related to input tax credit. Key points include:
- Under GST, input tax credit is available for goods, services, and capital goods used in the course of business. This is a significant expansion of credit compared to earlier tax systems.
- The credit can be claimed by registered businesses against their GST liability if the supplier has paid the taxes and the claimant has records like invoices. There are restrictions like credit must be claimed within a year and only for business purposes.
- Special rules apply to capital goods, input tax distribution, stock transfers between branches, tax on supplies becoming exempt, and recovery of wrongful credits.
The document provides an overview of the definition and scope of "supply" under the GST regime in India. Some key points:
1) Supply is defined broadly under GST and includes all forms of supply of goods/services for consideration in the course of business. Certain activities like permanent transfers of business assets are deemed supplies even without consideration.
2) Schedules I, II, and III outline activities that are treated as supply, classify activities as supply of goods or services, and exclude certain activities from supply respectively.
3) Key elements of a supply are consideration, in the course/furtherance of business, and import of services. Related/distinct persons and agents are also addressed.
4
The document provides an overview of the Indian financial system, outlining its key components such as financial institutions, markets, instruments, and services. It describes how the system channels savings from households to seekers of funds like firms and governments through various intermediaries and markets. The roles of merchant banking in providing various financial services and its regulatory framework in India are also summarized.
The document discusses provisions related to baggage and stores brought into India by passengers and crew.
It provides details on duty exemptions and allowances for baggage, including used personal effects, gifts, souvenirs and household items. It also discusses special provisions for Indian residents returning after a period abroad.
The document also summarizes rules for warehousing, transit and export of imported stores for vessels and aircraft without payment of import duties. Specific concessions are outlined for supplies to the Indian Navy.
This document discusses stock indices and the stock market in India. It provides information on key stock indices like the SENSEX and Nifty 50, which track the performance of major companies listed on the Bombay Stock Exchange and National Stock Exchange, respectively. These indices are important because they help investors allocate funds and allow analysts to predict market trends. The document also outlines some determinants of stock indices and how stock exchanges impact the Indian economy and listed companies.
Customs duty is levied on goods imported into or exported from India. The key aspects covered in the document include:
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- Special circumstances for duty liability such as re-importation of goods.
- Provisions for remission of duty on goods that are lost, destroyed or abandoned.
- Exemptions from customs duty available under general or special orders.
- Conditions for availing exemptions for goods used for inward or outward processing.
Customs duty is levied on goods imported into or exported from India. The key points are:
- Importation or exportation of goods is the taxable event for customs duty. Duty is determined based on the date of presentation of documents.
- There are provisions for remission of duty on goods that are lost, destroyed or damaged. Duty may also be abated for goods that deteriorate after import.
- The government can provide exemptions from whole or part of customs duty through notifications for goods used for inward or outward processing.
- Importers intending to avail an exemption must follow procedures like providing estimates to customs and maintaining proper records of imported goods.
Valuation is a complex process that considers many financial and non-financial factors. It requires calibrating knowledge from various disciplines like art, science, economics, and law. Valuation is used for many purposes including taxation, transactions, financial reporting, and strategic planning. There are several approaches to valuation such as asset-based, income-based, and market-based methods. The appropriate valuation approach and method depends on the nature of the business or assets being valued.
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2. OPTIONS FOR RAISING FUNDS
Fund Raising Options
Hybrid
Debt Equity
In India
From Banks & FIs
Public issue of
Bonds/Debentures
IPO
FPO
Rights Issue
Pref. Issue
Various forms of
Convertibles
outside India ECB ADR/GDR FCCB & FCEB
3. WHY 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 and
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
4. RELATED REGULATIONS
Companies
Act, 1956
--Provisions Relating
to Prospectus
--Provisions on
Minimum Subscription,
Allotment, Return of
Allotment
--Power to SEBI under
section 55 A relating to
Issue & transfer of
securities
Securities
Contract
(Regulation)
Act, 1956
Securities
and Exchange
Board of
5. SCRR- RULE 19(2)(B) - PRIOR TO
4.6.2010
Rule 19 (2)(b) 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.
6. SCRR- AMENDMENT DATED 4.6.2010
The minimum threshold level of public holding will be 25% for
all listed companies.
Existing listed companies having less than 25% public holding
have to reach the minimum 25% level by an annual addition of
not less than 5% to public holding
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.
7. SCRR- AMENDMENT DATED 4.6.2010
For companies whose draft offer document is pending with
Securities and Exchange Board of India on or before these
amendments are required to comply with 25% public shareholding
requirement by increasing its public shareholding by at least 5%
per annum, irrespective of the amount of post issue capital of the
company calculated at offer price.
A company may increase its public shareholding by less than 5%
in a year if such increase brings its public shareholding to the level
of 25% in that year.
The requirement for continuous listing will be the same as the
conditions for initial listing.
Every listed company shall maintain public shareholding of at least
25%. If the public shareholding in a listed company falls below
25% at any time, such company shall bring the public
shareholding to 25% within a maximum period of 12 months from
the date of such fall.
8. ISSUE OF CAPITAL AND DISCLOSURE
(REQUIREMENTS) REGULATIONS, 2009
Common Conditions for Public Issues and Rights Issues
Provisions as to Public Issue
Eligibility Requirements
Pricing in Public Issue
Promoters’ Contribution
Restriction on Transferability (Lock-in) of Promoters’
Contribution, etc.
Minimum Offer to Public, Reservations, etc.
Manner of Disclosures in the Offer Documents
General Obligations of Issuer and Intermediaries with respect
to Public
Issue and Rights Issue
Preferential Issue
Qualified Institutions Placement
Bonus Issue
Issue of Indian Depository Receipts
9. ICDR….. REGULATION 4
Reg4..provides for following general eligibility conditions
for for the issue…
Issuer, its promoter group or directors or persons in control of
the issuer should not be debarred from accessing capital
market
Promoters, directors or persons in control of the issuer should
not be a promoter, director or person in control of any other
company which is debarred from accessing capital market
Issuer to make application to one or more recognized stock
exchanges for listing of shares
Issuer to enter into agreement with a depository for demat of
specified securities
All partly-paid up equity shares have been made fully paid-up
Made firm arrangements of finance through verifiable means
towards 75% of the stated means of finance excluding the
amount to be raised through the issue or thru internal accruals
10. ICDR ……REG. 26 (REGARDING IPO)
Companies with track record Companies without track record
Primary Criteria
Track record of distributable profits for 3 out of the
immediately preceding 5 years
Pre-issue net worth of not less than Rs. 1 Crore in
each of the preceding 3 full years
Net tangible assets of atleast Rs. 3 Crores for each
of the preceding 3 full years
Not more than 50% of these to be held in the
form of monetary assets
(Proposed IPO + Previous Issues in the same
financial year) < 5 times the pre-issue net worth
In case the company has changed its name within
the last one year, atleast 50% of the revenue for
the preceding 1 full year is earned by the company
from the activity suggested by the new name
Prospective allottees in the IPO should not be less
than 1000 in number
Choice of Route: Fixed Price or
Book Building
50% of the net offer to
public being allotted to
QIBs
At least 15% of the project cost
is contributed by scheduled
commercial banks and at least
10% of the net offer to public is
allotted to QIBs
Choice of Route: Book
Building
Minimum post-issue face
value capital must be Rs.
10 Crores
OR
Compulsory market
making for at least 2
years from the date of
listing of shares
Minimum post-issue face value
capital must be Rs. 10 Crores
OR
Compulsory market making for
at least 2 years from the date of
listing of shares
Choice of Route: Fixed Price or
Book Building
+
+
Book built route mandatory with 50% QIB participation if all issues during the same financial year (including proposed IPO) >
5X pre-issue net worth
11. ICDR ……REGULATION 30-31
Reg30-31 deals with pricing and price band:
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)
Floor Price/Final Price not to be less than face value
If the issue price is above Rs.500 then the issuer can fix the FV of shares below Rs.10
but a minimum of Rs.1.
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%)
FACTORS DETERMINING PRICE:
• Financials of the Company – Net worth, EPS, profit margin.
• Industry P/E Ratio.
• Standing of the Company in the relevant industry
• Future prospect of the Industry as well as the Company
• Background of the promoters
12. ICDR ……REGULATION 32-48
Reg32-40 – deals with Minimum Promoter’s Contribution,
Lock-in
Promoter’s
Contribution
• Minimum of 20% of the post issue capital of the Company for unlisted companies; for listed
companies, either to extent of 20% in issue or to ensure post issue holding of 20%
• Following shares are ineligible for the computation of Promoter’s contribution
– Issued in last one year at a price lower than issue price, unless topped up
– Issued in last three years out of bonus issue or revaluation reserve for consideration other
than cash
Lock-in period
• For Promoters:
– Lock-in for a period of 3 years from the date of allotment or from the date of commencement
of commercial production, whichever is later
• Balance pre-issue capital, other than held by Indian and Foreign Venture Funds (registered with
SEBI) and shares held for at least one year and being offered for sale in the issue
– Must be locked-in for a period of 1 year from the date of allotment
Exemption
• In case of public issue of securities by a company which has been listed on a stock exchange
for at least 3 years and has a track record of dividend payment for at least 3 immediately
preceding years.
• In case of companies where no identifiable promoter or promoter group exists.
• In case of rights issues.
13. Corporate Governance Requirements (As per SEBI the requirements of
clause 49 is applicable to all the companies seeking listing first time)
• A separate section on Corporate Governance to be included in the Annual Reports with
disclosures on compliance of mandatory and non-mandatory requirements
• Submission of quarterly compliance report to the stock exchanges
• CEO/CFO to certify the financial statements and cash flow statements
Composition
of the Board
• Optimum number of executive and non executive directors with at least 50% being non-
executive. If the chairman, has executive powers then 50% of Board comprises of
Independent directors. While if chairman has non-executive powers then 1/3 of the Board
comprises of Independent directors.
Audit
Committee
• Mandatory constitution of Audit Committee with minimum three directors and headed by an
Independent director.
• All members shall be financially literate (should be able to understand financial statements)
and at least one member should have accounting and financial management expertise.
Investor
Committee
Subsidiary
Company
• Shareholder/Investor Grievances Committee to be formed under the chairmanship of a non
executive director to look into the redressing of shareholder and investor complaints like
transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends
• At least one director on the Board of the holding company shall be a director on the Board of
a material non listed Indian subsidiary Company
- Material non-listed subsidiary means a subsidiary whose turnover or net worth exceeds
20% of the consolidated turnover or net worth in the preceding accounting year
• Audit committee of the listed holding company shall also review the financial statements, in
particular, the investments by the unlisted subsidiary Company
Report on
Corp.
Governance
CEO/CFO
Certification
14.
15. INTERMEDIARIES AND THEIR ROLES
Lead Managers
• Overall Co-ordination
• Conduct due diligence and finalize disclosure in Offer Document
• Assist the legal counsel in drafting of Offer Document
• Interface / ensure compliance protocol with SEBI / NSE / BSE
Domestic &
International
Legal Counsels
• Legal Due Diligence
• Drafting the offer document
• Guidance on any other incidental legal matters
• Assistance in complying with requirement for selling in international
geographies
• Reviewing and auditing financials and preparing financial statements for
inclusion in the Offer Document
• Verify/audit various financial and other data used in the Offer document and
provide Comfort Letter
Auditors
Upfront
Existing
Auditors
Registrars
• Co-ordination with the Issuer and Bankers regarding collections,
reconciliation, refunds etc
• Securing allocation approval from Stock Exchanges
• Post issue co-ordination collation and reconciliation of information
4 weeks
before filing
DRHP with
SEBI
Upfront
Party Key Responsibility Appointment
16. • Bulk printing of the Red Herring Prospectus Bid Forms, final Prospectus,
CAN, Refund orders etc.
• Ensure timely dispatch and distribution of stationery to all centers
Printers
• Preparing and getting published all statutory notices
• Creating all advertisement materials
Advertisers
Escrow
Collections Banks
& Bankers ot the
Issue
• Acting as collecting agents
• EscrowAccount & Refund account
• TripartiteAgreement
• Dematerialization of Company’s shares
• Demat transfer of Shares
• Credit of Shares to Allottees
After
Depository Appointment of
Registrar
(NSDL, CDSL)
Before Filing
DRHP with SEBI
Before Filing
DRHP with SEBI
Before Filing
RHP with ROC
Self Certified
Syndicate Bank
(SCSB)
• To receive bids and block bid amount in the investor’s bank account
based on applications submitted;
• To provide FC on account transfer/ unblock funds post finalization of basis
of allotment,
• To address investor grievances on account ofASBA bids
Approved by
SEBI
IPO Grading
Agency
• Provides IPO Grading 2 weeks before
filing RHP with
ROC
17. VARIOUS LEGAL AGREEMENTS UNDERTAKEN
BY THE ISSUER COMPANY
Agreements Parties to the Agreement Purpose of Agreements
Engagement
Letter
BRLM MoU
Company and individually with
Investment Bankers, Counsels to the
Company, Auditors, Registrar and
other intermediaries
Company and BRLMs
Engaging the intermediaries for the
Services
Lays down the roles, responsibilities,
reps of BRLM and Company
Registrar MoU Company and Registrar Lays down the roles, responsibilities of
the Registrar
Escrow
Agreement
Company, BRLMs, Syndicate Members,
Registrar and Escrow Bankers to the
Issue
Lays down the process for receipt of
Issue proceeds and release of funds
to the Company
18. Agreements Parties to the Agreement Purpose of Agreements
Syndicate
Agreement
Company, BRLMs and Syndicate
Members
Lays down the process of marketing
and handling the forms
Underwriting
Agreement
Company and the Underwriters (BRLM
and Syndicate members)
Lays down the terms of Underwriting
and the extent of underwriting
Tripartite
Agreement
with
Depository
Company, NSDL and CDSL Lays down the provisions of NSDL /
CDSL acting as the Depositories of
the Company
Listing
Agreement
Company and Stock Exchanges Binds the Company to the requirements
of the Listing rules of the Stock
Exchanges
VARIOUS LEGAL AGREEMENTS (CONT..)
19. DISCLOSURES IN THE OFFER DOCUMENT
Capital Structure
• Shareholding Pattern (pre-issue and post-issue)
• Securities Premium Account (pre-issue and post-issue)
• Holding of the promoter and promoter group
• Disclosure about ESOPs if any
Objects of the
Issue
• Total requirements of funds
• Means of Financing
– Undertaking by the issuer company confirming firm arrangements of finance through
verifiable means towards 75% of the stated means of finance (excluding proposed
IPO)
• Details about the appraisal of the project
• Interim use of funds
Business
• Description about the Industry in which the Company operates
• Detailed description about the business of the Company
• Risks related to the Company
• External Risk Factors
• Details about the Board of Directors and various committees
• Details about key management persons
Risk Factors
Company
Management
20. DISCLOSURES IN THE OFFER DOCUMENT
(CONT’D)
Financial
Disclosures
• Auditors Report to have five year restated financials for the
– Issuer Company, and
– All Subsidiaries of the Issuer Company or Consolidated Financials of the Issuer
Company
• Audited financials presented should not be more than six months old at the time of filing
DRHP with SEBI and must be updated to be not more than six months old on the date
of filing the prospectus with the ROC
• All financials should be presented based on Indian GAAP
MD&A
• Detailed discussion on performance for the past 3 years
• Capital Expenditure
• Cash Flow and Liquidity
Litigations and
Defaults
• All pending litigations in which the Company/Promoters / Promoter Group / Directors /
Group companies are involved.
– Both, litigations filed by or against the Company/Promoters / Promoter Group /
Directors / Group companies
• Outstanding litigations, defaults, etc., pertaining to matters likely to affect operations
and finances of the company.
• The pending proceedings initiated for economic offences against the directors, the
promoters, companies and firms promoted by the promoters indicating their present
status.
21. KEY INTERNAL APPROVALS FROM BOARD AND
SHAREHOLDERS
Board Meeting for the IPO including taking on record a potential
offer for sale through the IPO process and setting up an IPO
Committee
Approval/ authorization for Offer for Sale by Selling
Shareholder(s)
Call for a Shareholders meeting to approve the following
— Fresh issue of shares under Section 81 (1A) of the Companies
Act (including reservations, Greenshoe etc.)
— ESOP/ ESPS, if any
— Increase in authorised capital, if any
— Amendment in the Articles of Association of the Company
22. KEY INTERNAL APPROVALS FROM BOARD AND
SHAREHOLDERS
„Appointment of intermediaries by the Board/ IPO Committee
— BRLMs/ Syndicate Members/ Stabilisation Agent
— Domestic and International Legal Counsel
— Registrars to the Issue
— Advertising and PR Agency
— Printers
— Escrow Collection Bank to the Issue
— IPO Grading agency
— Monitoring agency, if applicable
„
23. KEY INTERNAL APPROVALS FROM BOARD AND
SHAREHOLDERS
Declarations/ Undertakings enclosed with the filing of the DRHP
with SEBI
—That the complaints received in respect of this Issue shall be
attended to by the Company expeditiously and
satisfactorily. The Company to appoint a Compliance Officer and
authorize the Compliance Officer and the Registrar to
the Issue to redress complaints, if any, of the investors;
— That all steps will be taken for the completion of the necessary
formalities for listing and commencement of trading at all
the stock exchanges where the Equity Shares are proposed to be
listed within 12 working days from the issue closure „
24. KEY INTERNAL APPROVALS FROM BOARD AND
SHAREHOLDERS
Declarations/ Undertakings enclosed with the filing of the DRHP
with SEBI (cont’d.)
— Confirmation that adequate funds will be made available to the
Registrars to the Issue for refunds
— That the refund orders or Allotment advice to all the successful
Bidders shall be dispatched within specified time
— That no further offer of Equity Shares shall be made till the Equity
Shares offered through the RHP are listed or until the Bid monies
are refunded on account of non-listing, under-subscription etc.
— Declaration that the transactions of shares between Promoters
and Promoter Group would be disclosed to SEBI
— Undertaking that the Equity Shares being sold pursuant to the
Offer for Sale are free and clear of any liens or encumbrances,
and shall be transferred to the successful Bidders within the
specified time
— Undertaking regarding utilization of issue proceeds.
25. KEY INTERNAL APPROVALS FROM BOARD AND
SHAREHOLDERS
Approve the offer documents at various stages (and all directors
to sign the offer document individually).
— DRHP prior to filing with SEBI
— RHP prior to filing with RoC
— Final Prospectus prior to filing with RoC
— Changes in RHP and Prospectus directed by RoC to be initialled
— Public notices, if any, amending the RHP or the Prospectus
Finalize the Price Band at least two working days prior to Issue
opening
Post Issue Decisions and Actions along with the Company
— Finalization of Issue Price based on demand
— Approve the basis of allotment as finalized in consultation with the
Designated Stock Exchange and allot shares
26. IPO GRADING PROCESS
IPO grading is a service aimed at facilitating the assessment of equity
issues offered to public and is mandatory as per SEBI Regulations
Aimed at providing an independent assessment of fundamentals to aid
comparative assessment
Intended to serve as an Information and Investment tool for investors
IPO grading does not take cognizance of the price of the security. It is
not an investment recommendation
The Issuer must first contact one of the grading agencies and mandate it
for the grading exercise. The agency would then follow the process
outlined below :
• Seek information required for the grading from the Issuer
• On receipt of required information, have discussions with the company’s
management and visit the company’s operating locations, if required
• Meetings with the promoters and independent directors separately
• Prepare an analytical assessment report
27. IPO GRADING PROCESS
Present the analysis to a committee comprising senior executives of the
concerned grading agency. This committee would discuss all relevant
issues and assign a grade
Review SEBI observations and update their report if required.
Communicate the grade to the company along with an assessment
report outlining the rationale for the grade assigned
Though this process will ideally require 2 – 3 weeks for completion, our
initial interaction with Credit Rating Agencies indicates that it may be a
good idea for Issuers to initiate the grading process about 6 – 8 weeks
before the targeted IPO date to provide sufficient time for any
contingencies
IPO Grading is required prior to marketing of the IPO and needs to be
disclosed in the RHP and Prospectus
The Credit Rating Agencies have to forward the names and details of
IPOs graded by them on a monthly basis to SEBI / Stock Exchanges for
uploading on their website for public information
28. FIXED PRICE ISSUES
Offer Price: Price at which the securities are offered
and would be allotted is made known in advance to
the investors
Demand : Demand for the securities offered is known
only after the closure of the issue
Payment :100 % advance payment is required to be
made by the investors at the time of application.
Reservation: 50 % of the shares offered are reserved
for applications below Rs. 1 lakh and the balance for
higher amount applications.
29. BOOK BUILDING ISSUES
Offer Price: 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 :Demand for the securities offered , and at various
prices, is available on a real time basis on the BSE website
during the bidding period
Payment :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.
Reservations : 50 % of shares offered are reserved for
QIBS, 35 % for small investors and the balance for all other
investors.
30. BOOK BUILDING 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 Issuer also appoints syndicate members with whom orders are to
be placed by the investors.
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.
31. BSE'S BOOK BUILDING
SYSTEM
BSE offers the book building services through the Book Building
software that runs on the BSE Private network.
This system is one of the largest electronic book building networks
anywhere spanning over 350 Indian cities through over 7000 Trader
Work Stations via leased lines, VSATs and Campus LANS
The software is operated through book-runners of the issue and by the
syndicate member brokers. Through this book, the syndicate member
brokers on behalf of themselves or their clients' place orders.
Bids are placed electronically through syndicate members and the
information is collected on line real-time until the bid date ends.
In order to maintain transparency, the software gives visual graphs
displaying price v/s quantity
32. LISTING WITH BSE
In respect of Large Cap Companies with a minimum issue size of Rs. 10
crores and market capitalization of not less than Rs. 25 crores.
The minimum post-issue paid-up capital of the applicant company
(hereinafter referred to as "the Company") shall be Rs. 3 crores; and
The minimum issue size shall be Rs. 10 crores; and
The minimum market capitalization of the Company shall be Rs. 25
crores (market capitalization shall be calculated by multiplying the post-
issue paid-up number of equity shares with the issue price).
33. LISTING WITH BSE
B. In respect of Small Cap Companies other than a large cap company.
The minimum post-issue paid-up capital of the Company shall be Rs. 3
crores; and
The minimum issue size shall be Rs. 3 crores; and
The minimum market capitalization of the Company shall be Rs. 5 crores
(market capitalization shall be calculated by multiplying the post-issue paid-
up number of equity shares with the issue price); and
The minimum income/turnover of the Company should be Rs. 3 crores in
each of the preceding three 12-months period; and
The minimum number of public shareholders after the issue shall be 1000.
A due diligence study may be conducted by an independent team of
Chartered Accountants or Merchant Bankers appointed by the Exchange,
the cost of which will be borne by the company. The requirement of a due
diligence study may be waived if a financial institution or a scheduled
commercial bank has appraised the project in the preceding 12 months.
34. LISTING WITH BSE
Permission to use the name of the Exchange in an Issuer
Company's prospectus:
The Exchange follows a procedure in terms of which companies
desiring to list their securities offered through public issues are
required to obtain its prior permission to use the name of the
Exchange in their prospectus or offer for sale documents before
filing the same with the concerned office of the Registrar of
Companies. The Exchange has since last three years formed a
"Listing Committee" to analyse draft prospectus/offer documents of
the companies in respect of their forthcoming public issues of
securities and decide upon the matter of granting them permission to
use the name of "Bombay Stock Exchange Limited" in their
prospectus/offer documents. The committee evaluates the
promoters, company, project and several other factors before taking
decision in this regard.
35. LISTING WITH BSE
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 and approach the Regional Stock Exchange, i.e. Stock
Exchange nearest to its Registered Office for approval of the basis of
allotment.
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.
36. LISTING WITH BSE
Trading Permission
As per SEBI Guidelines, the issuer company should complete the
formalities for trading at all the Stock Exchanges where the securities
are to be listed within 7 working days of finalization of Basis of Allotment.
A company should scrupulously adhere to the time limit for allotment of
all securities and dispatch of Allotment Letters/Share Certificates and
Refund Orders and for obtaining the listing permissions of all the
Exchanges whose names are stated in its prospectus or offer
documents. In the event of listing permission to a company being denied
by any Stock Exchange where it had applied for listing of its securities, it
cannot proceed with the allotment of shares. However, the company
may file an appeal before the Securities and Exchange Board of India
under Section 22 of the Securities Contracts (Regulation) Act, 1956.
37. IPO PROCESS – BOOK BUILT ISSUE
Due diligence
Appointment of
BRLM and legal
counsel
Drafting of Draft
Red Herring
Filing with SEBI &
Stock Exchanges
SEBI Clearance
& ROC Filing
Pre-Marketing
Decision to go for
IPO
Issuer
Book building
RoC filing of final
Prospectus
Pricing & Allocation
Listing
Funds transferred
to issuer
Preparation /
Approvals
Roadshows
Marketing and Estimation of Price Range
Launch & Completion
38.
39. EXECUTION PROCESS TIMELINE
Activity IP
OP
ro
cess-23w
eeks
Preparation Phase
Due Diligence
Filing of Draft
Document Sebi
Observation
Finalization & filing of offer
Document
Issue Period
Post IssueActivities
2
weeks
4 - 5 weeks
1
w
e
e
k
4 - 8 weeks
2 - 3
weeks
Min.
3
D
a
y
s
2 - 3
weeks
40. FAST TRACK
ISSUE
The equity shares of the issuer have been listed on any
recognized stock exchange having nationwide trading
terminals for a period of at least three years immediately
preceding the reference date;
The average market capitalization of public shareholding of
the issuer is at least 5000 crore rupees;
The annualised trading turnover of the equity shares of the
issuer during 6 calendar months immediately preceding the
month of the reference date has been at least 2%. of the
weighted average number of equity shares listed during
such 6 months’ period;
The issuer has redressed at least 95% of the complaints
received from the investors till the end of the quarter
immediately preceding the month of the reference date;
41. FAST TRACK ISSUE
(CONT..)
The issuer has been in compliance with the equity listing
agreement for a period of at least 3 years immediately
preceding the reference date
The impact of auditors’ qualifications, if any, on the audited
accounts of the issuer in respect of those financial years for
which such accounts are disclosed in the offer document
does not exceed 5%. of the net profit or loss after tax of
the issuer for the respective years;
No show-cause notices have been issued or prosecution
proceedings initiated or pending against the issuer or its
promoters or whole time directors as on the reference date;
The entire shareholding of the promoter group of the issuer
is held in dematerialized form on the reference date.
42. IPOS - SPECIAL ISSUES
Employee reservation is now capped at up to 5% of the post issue
capital instead of 10% of issue size (as under the DIP Guidelines),
application size for and value of allotment to an employee under
employee reservation capped at Rs 1 lakh, retail discounts to
employees in the reservation portion also limited to application size Rs
1 lakh
ASBA Process introduced on July 30, 2008 as an alternate mode of
payment for Retail Individual Investors expanded in 2009 to all
categories of bidders excluding QIB
Pre Ipo Allotment/Transfer: Under ICDR regulations capital
structure must be frozen at DRHP stage and details of any pre IPO
allotments/transfers must be disclosed.
The ICDR Regulations introduced the concept of anchor investors
in 2009 allowing up to 30% allocation at price equal to or above issue
price to QIBs buyers applying for shares of a minimum value of Rs 10
crore in a book built public issue
43. THANK YOU
Neha Soni
M: 9428510772
(Company Secretary & Compliance Officer)
GYSCOAL ALLOYS LTD.
2nd Floor Mrudul Tower,
B/h Times of India,
Ashram Road, Ahmedabad, 380009