amruta ipo

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INITIAL PUBLIC OFFER

UNIVERSITY OF MUMBAI

ACADEMIC YEAR

2009-10

SUMMER INTERNSHIP

PROJECT REPORT ON


SUBMITTED BY

MR. RAHUL SAWANT

MMS (SEMESTER III)

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DECLARATION

I, Mr. RAHUL SAWANT. of S.A.V. AACHARYA INSTITUTE OF

MANAGEMENT & STUDIES of M.M.S. (Semester 3) hereby declare that I

have completed the project on IPO for the academic year 2011 - 2012. The

information submitted is true and original to the best of my knowledge.

___________________

RAHUL SAWANT.

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ACKNOWLEDGEMENT

This project on INITIAL PUBLIC OFFER is a result of co-operation and hard

work of many people. I, student of S.A.V.AACHARYA INSTITUTE OF

MANAGEMENNT& STUDIES would like to thank my Project Guide Prof.

--------

for her involvement in my project work and timely assessment that provided me

inspiration and valued guidance throughout my study.

I owe the debt to Mr. Ashok gauda (Director) of SAVIMS for giving me an

opportunity to present a creative outcome in the form of project work.

I also thank some employees from the organization without whose co-operation

my research would not have been accurate. I also express my sincere gratitude to

the library staff that has provided me with study material from time to time. I owedebt to my family, colleagues and friends who in some or the other way are

responsible for the completion of this project. I am also thankful to all those

people who have been of direct or indirect help in some or the other way in the

completion of this project.

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CERTIFICATE

I, Prof. ----------------- hereby certify that MR. Rahul Sawant of SAVIMS of

M.M.S. (Semester 3) has completed the project on IPO in the academic year

2011 - 2012 under my guidance. The information submitted is true and original to

the best of my knowledge.

____________________ ______________________

-------------- Dr. ASHOK GAUDA.

(PROJECT GUIDE) (DIRECTOR SAVIMS)

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TABLE OF CONTENTS

CHAPTER

NO.TOPIC PAGE

NOS.

1 EXECUTIVE SUMMARY

2

CONCEPTUAL FRAMEWORK

FINANCIAL MARKETS AND THEIR TYPES

CAPITAL MARKET, EQUITY MARKET, DEBT MARKET,

FOREX MARKET, PRIMARY MARKET, SECONDARY

MARKET

TYPES OF ISSUES

PUBLIC ISSUE, RIGHTS ISSUE, PREFERENTIAL ISSUE

3

OVERVIEW

MEANING OF IPO

MERITS

IPO METHODS

IPO PROCESS

4

STAKE HOLDERS

PLAYERS IN IPO

ROLE OF PLAYERS IN IPO, SEBIs ROLE

IMPORTANT PROVISIONS

TECHNICAL REJECTIONS

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5

PARAMETERS TO JUDGE AN IPO

DEMERITS OF AN IPO

6

IPO GRADING

FUNDAMENTALS OF THE ISSUE OF IPO

RECENT IPOs

7 CASE STUDY

8 CONCLUSION

BIBLIOGRAPHY

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CHAPTER 1

EXECUTIVE SUMMARY

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As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the current industry,

mainly because of India being a developing country and lot of growth in various sectors which

leads a country to ultimate success. And when we talk about countrys growth which is dependent

on the kind of work and how much importance to which sector is given. And when we say or talk

about industries growth which leads the economy of country has to be balanced and given proper

finance so as to reach the levels to fulfill the needs of the society. And industries which have

massive outflow of work and a big portfolio then its very difficult for any company to work with

limited finance and this is where IPO plays an important role.

This report talks about how IPO helps in raising fund for the companies going public, what are

its pros and cons, and also it gives us detailed idea why companies go public. How and what are

the steps taken by the companies before going for any IPO and also the role of (SEBI) Securities

and Exchange Board ofIndia the BSE and NSE , what are primary and secondary markets and

also the important terms related to IPO. It gives us idea of how IPO is driven in the market and

what are various factors taken into consideration before going for an IPO. And it also tells us

how we can more or less judge a good IPO. Then we all know that scams have always been a

part of any sector you go in for which are covered in it and also few recommendations are given

for the same. It also gives us some idea about what are the expenses that a company undertakes

during an IPO.

IPO has been one of the most important generators of funds for the small companies making

them big and given a new vision in past and it is still continuing its work and also for many

coming years.

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2.1 FINANCIAL MARKETS

In economics, typically, the term market means the aggregate of possible buyers and sellers of a

thing and the transactions between them.

A financial market is a mechanism that allows people to easily buy and sell (trade) financial

securities (such as stocks and bonds), commodities (such as precious metals or agricultural goods),

and other fungible items of value at low transaction costs and at prices that reflect the efficient-

market hypothesis.

Financial markets have evolved significantly over several hundred years and are undergoing constant

innovation to improve liquidity.

Both general markets (where many commodities are traded) and specialized markets (where only

one commodity is traded) exist. Markets work by placing many interested buyers and sellers in one

"place", thus making it easier for them to find each other. An economy which relies primarily on

interactions between buyers and sellers to allocate resources is known as a market economy

Financial Markets facilitate

A.The raising ofcapital (in the capital markets);

B. The transfer ofrisk(in the derivatives markets);

C. International trade (in the currency markets)

A. RAISING F CAPITAL - in Capital Markets

Without financial markets, borrowers would have difficulty finding lenders themselves.

Intermediaries such asbanks help in this process. Banks take deposits from those who have money

to save. They can then lend money from this pool of deposited money to those who seek to borrow.Banks popularly lend money in the form of loans and mortgages. A good example of a financial

market is a stock exchange. A company can raise money by selling shares to investors and its

existing shares can be bought or sold.

B. TRANSFER OF RISKS - in Derivative Markets

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http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Fungiblehttp://en.wikipedia.org/wiki/Transaction_costhttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Market_liquidityhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Risk#Risk_in_financehttp://en.wikipedia.org/wiki/Derivatives_markethttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Currency_markethttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Tradehttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Fungiblehttp://en.wikipedia.org/wiki/Transaction_costhttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Market_liquidityhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Risk#Risk_in_financehttp://en.wikipedia.org/wiki/Derivatives_markethttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Currency_markethttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Investors


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During the 1980s and 1990s, a major growth sector in financial markets is the trade in so called

derivative products, orderivatives for short.

In the financial markets, stock prices, bond prices, currency rates, interest rates and dividends go

up and down, creating risk. Derivative products are financial products which are used to control risk

or paradoxically exploit risk. It is also called financial economics.

C. INTERNATIONAL TRADE - in Currency Market

The most obvious buyers and sellers of foreign exchange are importers/exporters. While this may

have been true in the distant past, whereby importers/exporters created the initial demand for

currency markets, importers and exporters now represent only 1/32 of foreign exchange dealing,

according to BIS.[1]

The picture of foreign currency transactions today shows:

Banks/Institutions

Speculators

Government spending (for example, military bases abroad)

Importers/Exporters

Tourists

D. MATCH THOSE WHO WANT CAPITALTO THOSE WHO HAVE IT

Without financial markets, borrowers would have difficulty finding lenders themselves.

Intermediaries such asbanks help in this process. Banks take deposits from those who have money

to save. They can then lend money from this pool of deposited money to those who seek to borrow.

Banks popularly lend money in the form ofloans and mortgages.

A good example of a financial market is a stock exchange. A company can raise money by selling

shares to investors and its existing shares can be bought or sold.

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http://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Risk#Risk_in_financehttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Bank_for_International_Settlementshttp://en.wikipedia.org/wiki/Financial_market#cite_note-0http://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Risk#Risk_in_financehttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Bank_for_International_Settlementshttp://en.wikipedia.org/wiki/Financial_market#cite_note-0http://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Investors


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2.2 TYPES OF FINANCIAL MARKETS

Capital markets which consist of:

Stock markets, which provide financing through the issuance of shares orcommon

stock, and enable the subsequent trading thereof.

Bond markets, which provide financing through the issuance ofbonds, and enable

the subsequent trading thereof.

Commodity Markets, which facilitate the trading of commodities.

Money Markets, which provide short term debt financing and investment.

Derivatives Markets, which provide instruments for the management offinancial risk.

Futures Markets, which provide standardized forward contracts for trading products at

some future date; see also forward market.

Insurance Markets, which facilitate the redistribution of various risks.

Foreign Exchange Markets, which facilitate the trading offoreign exchange.

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http://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_markethttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Derivatives_markethttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Futures_exchangehttp://en.wikipedia.org/wiki/Forward_contracthttp://en.wikipedia.org/wiki/Forward_markethttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_markethttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Commodity_marketshttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Derivatives_markethttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Futures_exchangehttp://en.wikipedia.org/wiki/Forward_contracthttp://en.wikipedia.org/wiki/Forward_markethttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_market


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2.3 PRIMARY MARKET

The primary market provides the channel for sale of new securities. Primary market provides

opportunity to issuers of securities; Government as well as corporates, to raise resources to meet

their requirements of investment and/or discharge some obligation.

They may issue the securities at face value, or at a discount/premium and these securities may take a

variety of forms such as equity, debt etc. They may issue the securities in domestic market and/or

international market.

The primary market issuance is done either through public issues or private placement. A public

issue does not limit any entity in investing while in private placement, the issuance is done to select

people. In terms of the Companies Act, 1956, an issue becomes public if it results in allotment to

more than 50 persons. This means an issue resulting in allotment to less than 50 persons is private

placement. There are two major types of issuers who

issue securities. The corporate entities issue mainly debt and equity instruments (shares, debentures,

etc.), while the governments (central and state governments) issue debt securities (dated securities,

treasury bills). The price signals, which subsume all information about the issuer and his business

including associated risk, generated in the secondary market, help the primary market in allocation of

funds.

SECONDARY MARKET

Secondary market refers to a market where securities are traded after being Initially offered to the

public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in

the secondary market. Secondary market comprises of equity markets and the debt markets. The

secondary market enables participants who hold securities to adjust their holdings in response to

changes in their assessment of risk and return. They also sell securities for cash to meet their

liquidity needs. Once the new securities are issued in the primary market they are traded in the stock

(secondary) market. The secondary market is operated through two mediums, namely, the Over-the-

Counter (OTC) market and the Exchange- Traded market.

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2.4 TYPES OF ISSUES

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3.1 INTRODUCTION TO IPO

Initial public offering (IPO), also referred to simply as a "public offering" or "flotation," is when a

company issues common stockorshares to the public for the first time. They are often issued by

smaller, younger companies seeking capital to expand, but can also be done by large privately-

owned companies looking to becomepublicly traded.

Initial Public Offering ( IPO ) is when a company makes either a fresh issue of securities or an

offer for sale of its existing securities or both for the first time to the public. This paves way for

listing and trading of the issuers securities.

A corporate may raise capital in the primary market by way of an initial public offer, rights

issue or private placement.

An Initial Public offer (IPO) is the selling of securities to the public in the primary market.

It is the largest source of funds with long or indefinite maturity for the company.

Companies fall into two broad categories

A. Private

B. Public

A privately held company has fewer shareholders and its owners don't have to disclose much

information about the company. Anybody can go out and incorporate a company: just put in some

money, file the right legal documents and follow the reporting rules of your jurisdiction. Most small

businesses are privately held. But large companies can be private too.

It usually isn't possible to buy shares in a private company. You can approach the owners about

investing, but they're not obligated to sell you anything. Public companies, on the other hand, have

sold at least a portion of themselves to the public and trade on a stock exchange. This is why doing

an IPO is also referred to as going public

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Public companies have thousands of shareholders and are subject to strict rules and regulations. They

must have a board of directors and they must report financial information every quarter. In the

United States, public companies report to the Securities and Exchange Commission (SEC). In other

countries, public companies are overseen by governing bodies similar to the SEC. From an investor's

standpoint, the most exciting thing about a public company is that the stock is traded in the open

market, like any other commodity. If you have the cash, you can invest. The CEO could hate your

guts, but there's nothing he or she could do to stop you from buying stock.

The first sale of stock by a private company to the public, IPOs are often issued by smaller, younger

companies seeking capital to expand, but can also be done by large privately-owned companies

looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting

firm, which helps it determine what type of security to issue (common or preferred), best offering

price and time to bring it to market. IPOs can be a risky investment. For the individual investor, it is

tough to predict what the stock will do on its initial day of trading and in the near future since there

is often little historical data with which to analyze the company. Also, most IPOs are of

companies going through a transitory growth period, and they are therefore subject to additional

uncertainty regarding their future value.

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3.2 MERITS OF GOING PUBLIC

Basically, going public (or participating in an "initial public offering" or IPO) is the process in which

a business owned by one or several individuals is converted into a business owned by many. It

involves the offering of part ownership of the company to the public through the sale of debt or more

commonly, equity securities (stock).

Going public raises cash and usually a lot of it. Being publicly traded also opens many financial

doors:

INCREASE IN THE CAPITAL

An IPO allows a company to raise funds for utilizing in various corporate operational purposes likeacquisitions, mergers, working capital, research and development, expanding plant and equipment

and marketing.

LIQUIDITY

The shares once traded have an assigned market value and can be resold. This is extremely helpful as

the company provides the employees with stock incentive packages and the investors are provided

with the option of trading their shares for a price.

VALUATION

The public trading of the shares determines a value for the company and sets a standard. This works

in favor of the company as it is helpful in case the company is looking for acquisition or merger. It

also provides the share holders of the company with the present value of the shares.

INCREASED WEALTH

The founders of the companies have an affinity towards IPO as it can increase the wealth of the

company, without dividing the authority as in case of partnership.

Because of the increased scrutiny, public companies can usually get better rates when they

issue debt.

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Being on a major stock exchange carries a considerable amount of prestige. In the past, only private

companies with strong fundamentals could qualify for an IPO and it wasn't easy to get listed.

The internet boom changed all this. Firms no longer needed strong financials and a solid history to

go public. Instead, IPOs were done by smaller startups seeking to expand their businesses. There's

nothing wrong with wanting to expand, but most of these firms had never made a profit and didn't

plan on being profitable any time soon.

When a company lists its shares on a public exchange, it will almost invariably look to issue

additional new shares in order to raise extra capital at the same time. The money paid by investors

for the newly-issued shares goes directly to the company (in contrast to a later trade of shares on the

exchange, where the money passes between investors). An IPO, therefore, allows a company to tap a

wide pool of stock market investors to provide it with large volumes of capital for future growth. The

company is never required to repay the capital, but instead the new shareholders have a right to

future profits distributed by the company and the right to a capital distribution in case of dissolution.

The existing shareholders will see their shareholdings diluted as a proportion of the company's

shares. However, they hope that the capital investment will make their shareholdings more valuable

in absolute terms.

In addition, once a company is listed, it will be able to issue further shares via a rights issue, thereby

again providing itself with capital for expansion without incurring any debt. This regular ability to

raise large amounts of capital from the general market, rather than having to seek and negotiate with

individual investors, is a key incentive for many companies seeking to list.

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3.3 ELIGIBILTY FOR MAKING ISSUES

SEBI has laid down eligibility norms for entities accessing the primary market through public

issues.

There is no eligibility norm for the listed company making a right issue as it is an offer

made to existing shareholders who are expected to know their company.

The main entry norms for the companies making a public issue (IPO or FPO) are summarized as

under:

ENTRY NORM I (EN I)

The company shall meet the following requirements:

Net Tangible assets of as least Rs 3 crores for full 3 yrs.

Distributable profits in at least three yrs.

Net worth of at least three yrs.

IF change in name , at least 50% revenue for preceding

1 yr should be from the new activity.

The issue size does not exceed 5 times the pre-issue net worth

ENTRY NORM II (EN II)

Issue shall be through book building route, with at least 50% to be mandatory allotted to the

Qualified Institutional Buyers (QIBs).

The minimum post-issue face value capital shall be Rs 10 crore or there shall be a compulsory

market-making for at least 2 yrs.

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ENTRY NORM III (ENIII)

The project is appraised & participated to the extent of 15% by FIs Scheduled Commercial

Banks of which at least 10% comes from the appraiser(s).

The minimum post-issue value capital shall be Rs10 crore or there shall be a compulsory

market-making for at least2 yrs.

In addition to satisfying the aforesaid eligibility norms, the company shall also satisfy the

criteria of having at least

1000 prospective allotees in its issue.

For the companies which has not completed 12 months of its commercial operations.

The 1st issue is to be at par

A special resolution is to be passed

Draft prospectus should be submitted to SEBI

Minimum Public offer for listing is 25% of total paid up capital up to max of 75%.

SEBI- OTHER CONDITIONS

Companies barred not to issue shares.

No partly Paid Up shares:

Partly paid Up share to be made fully Paid up or forfeited in the manner specified, before the

public offering.

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ADDITIONAL CONDITIONS FOR UNLISTED COMPANIES

Prospective allottees to be not less than 1000.

No outstanding Convertible securities or other right which would entitle the existing

promoters or shareholders any option to receive equity shares after public offer.

IPO GRADING (Effective April 30, 2007)

Grading to be obtained from at least 1 rating agency.

All the grades obtained to be disclosed in the offer documents.

Expenses to be incurred by the company.

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3.4 METHODS OF IPO

Once the registration gets approved by the regulator and the completion of meetings with potential

investors the company and investment bank together decide on issue date, issue price and the

minimum lot quantity that an investor should subscribe to. The maximum quantity (amount) that an

investor can subscribe to depends on the category (eg; retail investor, Mutual Fund etc) that the

investor falls into. This limit and categorization are provided by the regulator. However the exact

price is decided by one of the following methods.

Fixed Price Method

Book Building method

Fixed Price Method

In this method of pricing the investment bank in consultation with the firm fixes the price at which

an investor can subscribe to. This price could be at par value or at a premium above the par value.

Book Building Method

In this method of pricing a price band is fixed instead of a fixed price. The lowest price in the price

band is called as floor price and the highest price is called as cap price. An investor can subscribe

at a price anywhere in the price band. An investor who wants to subscribe at any price can mention

the cut-off price. This cut-off price is decided once the bid period is over. Once the issue is closed a

book with descending order of prices is prepared. Cut-off price is the price at which the entire issue

gets subscribed. This is the most commonly used method.

This Initial Public Offering can be made through the fixed price method, book building method or

a combination of both.

In case the issuer chooses to issue securities through the book building route then as per SEBI

guidelines, an issuer company can issue securities in the following manner.

100% of the net offer to the public through the book building route

75% of the net offer to the public through the book building process and 25% through the Fixed

Price Portion

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BOOK BUILDING

Book Building is essentially a process used by companies raising capital through Public Offerings-

both Initial Public Offers (IPOs) or Follow-on Public Offers ( FPOs) to aid price and demand

discovery. It is a mechanism where, during the period for which the book for the offer is open, the

bids are collected from investors at various prices, which are within the price band specified by the

issuer. The process is directed towards both the institutional as well as the retail investors. The issue

price is determined after the bid closure based on the demand generated in the process.

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.

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Difference between shares offered through book building and offer of shares through normal

public issue / fixed price issue

BOOK BUILDING PROCESS FIXED PRICE PROCESS

PRICINGIndicative price range is known Offered price is Known in advance to

investors

DEMANDCan be known everyday as the book is

built

Known after the closure of issue

PAYMENT After allocation At the time of subscription

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3.5 IPO PROCESS

Appointment Procedure

1) Meeting of Board of Directors

2) Appointing of Merchant Bankers- Specialized financial Consultancy who looks after Initial

Public Offering

3) Appointing of Registrar and transfer agent done by Merchant Bankers

4) Banks- Appointed by Merchant Bankers

5) Appointing of Lawyer

Real Procedure

6) Book issued by Merchant bankers is submitted to SEBI which includes Reason of Issuing,

no of Shares, Financial Condition of the company, current Business, Management, Growth

in Sectors and Risk factor

7) Prospectus- Issued to stock Market and registrars

8) Printing Of Forms

9) Appointment of Brokers

10) Marketing & Advertising

11) Brokers Meeting in a Company

12) Road Shows or meetings

13) IPO starts 3-7 days opened

14) IPO closed

Post IPO

15) Collection of Forms

16) Oversubscription or Under subscription

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17) Allotment Of shares

A. Pro data allotment

B. Lottery system

18)Issue of share certificate

A. Letter of allotment

B. Regret Letter

19) Refund cheque

20) Listing Of shares in NSE or BSE

When a company wants to go public, the first thing it does is hire an investment bank, which does

the underwriting. Underwriting is the process of raising money by either debt or equity (in this casewe are referring to equity). You can think of underwriters as middlemen between companies and the

investing public. The biggest underwriters are Goldman Sachs, Merrill Lynch, Credit Suisse First

Boston, Lehman Brothers and Morgan Stanley.

The company and the investment bank will first meet to negotiate the deal. Items usually discussed

include the amount of money a company will raise, the type of securities to be issued and all the

details in the underwriting agreement. The deal can be structured in a variety of ways. For example,

in a firm commitment, the underwriter guarantees that a certain amount will be raised by buying the

entire offer and then reselling to the public. In a best efforts agreement, however, the underwriter

sells securities for the company but doesn't guarantee the amount raised. Also, investment banks are

hesitant to shoulder all the risk of an offering. Instead, they form a syndicate of underwriters. One

underwriter leads the syndicate and the others sell a part of the issue.

Once all sides agree to a deal, the investment bank puts together an offer document to be filed with

the SEBI. This document contains information about the offering as well as company info such as

financial statements, management background, any legal problems, where the money is to be used

and insider holdings. The SEBI then requires a cooling off period, in which they investigate and

make sure all material information has been disclosed. Once the SEBI approves the offering, a date

(the effective date) is set when the stock will be offered to the public.

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4.1 PLAYERS IN IPO

Many intermediaries are involved in connection with the public issue.

Following are the intermediaries who have to be registered with SEBI and must have valid certificatefrom SEBI to act as an intermediaries.

Investors

Qualified Institutional Investors

Non Institutional Investors

Retail Investors

Issuer

Book Running Lead Manager

Underwriters

Escrow Bankers

Bidding Centers

Registrars

Legal Advisor

Stock Brokers and Sub Brokers

The Stock Exchanges

The Depositories

The Postal System

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4.2 ROLE OF PLAYERS

Merchant Bankers play the most vital role amongst all intermediaries. They assist the

company right from preparing prospectus to the listing of securities at the stock exchanges.

Merchant Bankers have to satisfy themselves about the correctness and propriety of all the

information provided in the prospectus. It is mandatory for them to carry due diligence for all the

information provided in the prospectus and they must issue a certificate to this effect to SEBI.

A Company may appoint more than one Merchant Banker provided Inter-Se Allocation of

Responsibilities between theMerchant Bankers are properly structured.

Escrow Bankers

They receive Bid-cum-Application forms from Bidding centers

Sort tehm according to the category (employees, shareholders, NRIs, public)

Affix unique running bank serial numbers for each of the application and the

accompanying payment instruments.

Prepare bank schedules giving details of bank serial number, application number, name of

the investor, amount collected, cheque number paying bank and branch name.

Schedules are to be serially numbers and totaled.

Send cheques / drafts in clearing

Account for cheque returns

Send provisional collection certificates on or before the 3rd day from the date of closure.

Reconcile and send final certificates in respect of all the branches

Prepare and forward cheque return statements

Transfer funds to public issue / offer and refund order accounts

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Honour refund orders after matching the same with master

Make available periodic reconciliation of the refund account

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Registrar

Receive / collect bid-cum-application forms from the escrow collection branches along

with the schedule on a daily basis

Prepare 3 day report for submission to SEBI

Enter details of applications received lot wise

Prepare bunchs of uniform no. of applications

Capture the data from the applications

Print chek list and verify the data entered with applications

Update corrections and verify correction check lists

Send beneficiary account details to the depositories for validation

Obtain demographic details of valid beneficiary accounts

Match application details with the depository details

Print mismatches and manually identify cases where discretion is taken

Enter cheque return details and mark them in as such in data

Reconcile amount collected as per application with the schedule; seek clarifications from

the bankers in repect of mismatches

Do a branch wise reconciliation of the amount received as per data captured at their end

and as per bank final certificate

Identify applications to be rejected on technical grounds

Verify the identified applications physicaly

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Bidding Centers

They accept bid cum application forms from investors along with cheque / demand draft

Register Bid (for options) through online / offline terminals

Generate transaction registration slips (TRS) for each of the options

Lodge Bid- cum- Applications with an Escrow Bankers

Bankers to the Issue are banks which accept application from the public on behalf of

the company. These applications are then forwarded to Registrar & Share Transfer Agent for

further processing.

Stock Brokers & Sub-Brokersare those intermediaries who through their contacts /

sources invite the public for subscribing shares for which they get commission.

Depositories are the intermediaries who holds securities in dematerialized form on

behalf of the shareholders

Underwriters are those intermediaries who underwrite the securities offered to the

public. In case there is under subscription (in short, the company does not receive good response

from public and amount received from is less than the issue size), underwriters subscribe to the

unsubscribed amount so that the issue is successful.

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4.3 SEBIs ROLE IN AN ISSUE

Any company making a public issue or a listed company making a rights issue of value of more than

Rs 50 lakhs is required to file a draft offer document with SEBI for its observations. The company

can proceed further on the issue only after getting observations from SEBI. The validity period of

SEBIs observation letter is three months only i.e the company has to open its issue within

threemonths from the date of SEBI's observation letter.

THE PRICE OF AN ISSUE

Indian primary market ushered in an era offree pricing in 1992. Following this, the guidelines have

provided that the issuer in consultation with Merchant Banker shall decide the price.

There is no price formula stipulated by SEBI. SEBI does notplay any role in price fixation. The

company and merchant banker are however required to give full disclosures of the parameters which

they had considered while deciding the issue price.

Normally in an IPO, the shares are issued at a discount to what is considered their intrinsic value

and thats why investors keenly await IPOs and make money on most of them. IPO are generally

priced at a discount, which means that if the intrinsic value of a share is perceived to be Rs.100 the

shares will be offered at a price, which is lesser than Rs.100 say Rs.80 during the IPO. When the

stock actually lists in the market it will list closer to Rs.100. The difference between the two prices is

known as Listing Gains, which an investor makes when investing in IPO and making money at the

listing of the IPO. A Bullish Market gives IPO investors a clear opportunity to achieve long term

targets in a short term phase.

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4.4 IMPORTANT PROVISIONS

FILING OF OFFER DOCUMENT

Draft offer document to be filed with SEBI at least 30 days prior to filing of Prospectus with

ROC

SEBI may specify changes / issue observations within 30 days

FILING ON BOOK BUILT ISSUE

DRHP is filed with SEBI

After taking into account SEBI observations, RHP is filed with ROC, at least 3 days before the

bid opens

Post book- building process and finalization of price, prospectus is filed with SEBI.

STOCK EXCHANGES REGULATIONS

Stock exchanges have stipulated minimum threshold for the purpose of IPOs, which are as under

BSE

Minimum issue size Rs. 10 crores

Minimum post issue paid up capital- Rs 20 crores

Minimum market capitalization Rs 25 crores

NSE

Post issue paid up capital should not be less than Rs 10 crores

Capitalization i.e Issue price multiplied by post issue no of shares should not be less than Rs 25

crores

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3 year track record

Project / activity plan must be approved by the FI

FEMA ACT

OCBs are de-recognized as a class of investors

FIIs investment limits

Single FII : up to 10% of the post issue capital

Aggregate : up to 24% of the post issue capital, can be increased up to sectoral limit, with the

approval of Board of Directors followed by shareholders approval by a special resolution.

Single sub- account : up to 10% of the post issue capital, 5% in case the sub account is aforeign corporate or an individual

LISTING AGRREMENT CLAUSE 24

PRE ISSUE FORMALITIES

To obtain in principle approval for listing of new securities

To make true, fair and adequate disclosures in the offer documents

To get the offer documents vetted by SEBI

To submit to the Stock exchange

a) Copy of the acknowledgement card so vetted by SEBI

b) Compliance certificate from Merchant Banker reporting positive compliance of guidelines on

disclosure and investor protection.

In the event of not submitting the above documents or withdrawal of the acknowledgement

card by SEBI at any time before grant of permission for listing, the securities shall not be

eligible for listing and the company shall become liable to refund the subscription money

immediately.

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POST ISSUE FORMALITIES

Refunds not gone through

Shares in pool account

Postal return undeliverable

Wrong credit / dual credit

Improper reconciliation

GROUND OF TECHNICAL REJECTIONS

PAN No. not provided in application for Rs. More than 50,000

HNIs / QIBs applying at cut off

Applications not bid but banked

Application bid but not banked

DP ID / Client ID not provided

Multiple bids

Bids by minors

Bids outside the price band

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4.5 KEY DOCUMENTS

OFFER DOCUMENT

Draft Red Herring Prospectus

Red Herring Prospectus

Prospectus

PROSPECTUS

An IPO prospectus is a document filed by companies attempting to sell shares to the public in an

Initial Public Offering, or IPO. It's a critical document for any investors interested in purchasing IPO

shares. The prospectus will describe the company's operations, competitive landscape and risk

factors as well as the planned uses for the proceeds that are raised through the IPO. Unfortunately,

IPO prospectuses are very long and dense documents that contain a tremendous amount of confusing

legal jargon. Understanding the key sections of the prospectus will help you get through the

document more effectively and will increase your ability to extract critical information from the

prospectus.

AGREEMENT

MOU with BRLMs

MOU with RTI and STA

Escrow Agreement

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Syndicate Agreement

Agreement with Post Monitoring Agency

Comfort Letters from Auditors and Due Diligence Certificates from BRLMs

FORM FOR APPLYING/ BIDING FOR THE SHARE

The form for applying/bidding of shares is available with all Syndicate members, collection centers,

the brokers to the issue and the bankers to the issue.

TIMEGAP AFTER THE ISSUE FOR SHARES TO GET LISTED

The listing on the stock exchanges is done within 7 days from the finalization of the issue. Ideally, it

would be around 3 weeks after the closure of the issue.

Going public requires a Registration Statement which is a carefully crafted document that is

prepared by your attorneys and accountants. It requires detailed discussions on informationpertaining to:

Business product/service/markets

Company Information

Risk Factors

Proceeds Use (How are you going to use the money)

Officers and Directors

Related party transactions

Identification of your principal shareholders

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Audited financials

After your registration statement is prepared, it is submitted to the Securities and Exchange

Commission and various other regulatory bodies for their detailed review. When this process is

completed, you and your management team will do a "road show" to present your company to the

stock brokers who will then sell your stock to the public investors. Assuming they can successfully

sell your issue, youll receive your money.

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5.1 PARAMETERS TO JUDGE AN IPO

Good investing principles demand that you study the minutes of details prior to investing in an IPO.

Here are some parameters you should evaluate:-

PROMOTERS

Is the company a family run business or is it professionally owned? Even with a family run business

what are the credibility and professional qualifications of those managing the company? Do the top

level managers have enough experience (of at least 5 years) in the specific type of business?

INDUSTRY OUTLOOK

The products or services of the company should have a good demand and scope for profit.

BUSINESS PLANS

Check the progress made in terms of land acquisition, clearances from various departments,

purchase of machinery, letter of credits etc. A higher initial investment from the promoters will lead

to a higher faith in the organization.

FINANCIALS

Why does the company require the money? Is the company floating more equity than required?

What is the debt component? Keep a track on the profits, growth and margins of the previous years.

A steady growth rate is the quality of a fundamentally sound company. Check the assumptions the

promoters are making and whether these assumptions or expectations sound feasible.

RISK FACTORS

The offer documents will list our specific risk factors such as the companys liabilities, court cases or

other litigations. Examine how these factors will affect the operations of the company.

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5.2DISADVANTAGES OF GOING PUBLIC

PROFIT-SHARING

If the firm is sitting on a highly successful venture, future success (and profit) has to be shared with

outsiders. After the typical IPO, about 40% of the company remains with insiders, but this can vary

from 1% to 88%, with 20% to 60% being comfortably normal.

PUBLIC SCRUTINY

A major reason why firms resist going public is the loss of confidentiality in company operations and

policies. For example, a company could be destroyed if the company were to disclose its technology

or profitability to its competitors.

Public companies are also open to public scrutiny. Quarterly financial reports, internal transactions,

and balance sheets are all open to inspection. This is more of a problem for some companies than

others, particularly companies who might have made illegal deals or altered financial reports.

REPORTING AND FIDUCIARY RESPONSIBILITIES

Public companies must continuously file reports with the SEC and the exchange they list on. They

must comply with certain state securities laws ("blue sky"), NASD and exchange guidelines. This

disclosure costs money and provides information to competitors.

LOSS OF CONTROL

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Outsiders are often in a position to take control of corporate management and might even fire the

entrepreneur/company founder. While there are effective anti-takeover measures, investors are not

willing to pay a high price for a company in which poor management could not be replaced.

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IPO EXPENSES

An IPO is a costly undertaking. A typical firm may spend about 15-25% of the money raised

on direct expenses. Even more resources are spent indirectly (management time, disruption of

business).

Immediate Cash-out Usually Not Permitted

Typically, IPO entrepreneurs face various restrictions that do not permit them to cash out for

many months after the IPO.

LIABILITY

The company, its management, and other participants may be subject to liability for false or

misleading statements and omissions in the registration documents or in the reports filed by the

company after it becomes public. In addition management may be subject to law suits by the

stockholders for breaches of fiduciary duty, self dealing and other claims.

FALLING STOCK PRICES

If the shares of the company's stock fall, the company may lose market confidence. Decreased

valuation of the company may effect lines of credits, secondary offering pricing, the company's

ability to maintain employees, and the personal wealth of insiders and investors.

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6.1 IPO GRADING

IPO grading is the grade assigned by a Credit Rating Agency registered with SEBI, to the initial

public offering (IPO) of equity shares or any other security which may be converted into or

exchanged with equity shares at a later date. The grade represents a relative assessment of the

fundamentals of that issue in relation to the other listed equity securities in India. Such grading is

generally assigned on a five-point point scale with a higher score indicating stronger fundamentals

and vice versa as below.

IPO grading has been introduced as an endeavor to make additional information available for the

investors in order to facilitate their assessment of equity issues offered through an IPO.

6.1.1 HOW LONG THE ASSIGNED GRADE BE VALID?

The assigned grade would be a one time assessment done at the time of the IPO and meant to aid

investors who are interested in investing in the IPO. The grade will not have an ongoing validity.

6.1.2 MAIN FEATURES OF SEBIs DECISION

The important features of SEBIs decision on IPO Grading are as follows:

The grading exercise will exclude the issue price from its scope

It will be carried out by recognized Credit Rating Agencies

The grading will be on a 5-point scale, the lowest grade to be indicated by 1 and the highest by

5

The issuing company will be allowed to choose the rating agency for grading its IPO

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6.2 FUNDAMENTALS OF THE ISSUE WHILE ARRIVING AT

THE IPO GRADE

The IPO grading process is expected to take into account the prospects of the industry in which the

company operates, the competitive strengths of the company that would allow it to address the risks

inherent in the business(es) and capitalise on the opportunities available, as well as the companys

financial position.

While the actual factors considered for grading may not be identical or limited to the following, the

areas listed below are generally looked into by the rating agencies, while arriving at an IPO grade

Business Prospects and Competitive Position

i. Industry Prospects

ii. Company Prospects

Financial Position

Management Quality

Corporate Governance Practices

Compliance and Litigation History

New ProjectsRisks and Prospects

It may be noted that the above is only indicative of some of the factors considered in the IPO grading

process and may vary on a case to case basis.

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6.3 DECIDING ABOUT INVESTING IN AN IPO

IPO Grading is intended to provide the investor with an informed and objective opinion expressed by

a professional rating agency after analyzing factors like business and financial prospects,

management quality and corporate governance practices etc. However, irrespective of the grade

obtained by the issuer, the investor needs to make his/her own independent decision regarding

investing in any issue after studying the contents of the prospectus including risk factors carefully.

6.3. i) IPO GRADING DIFFERS FROM AN INVESTMENT

RECOMENDATION

Investment recommendations are expressed as buy, hold or sell and are based on security

specific comparison of its assessed fundamental factors and market factors

On the other hand, IPO Grading is expressed on a five-point scale and is a relative comparison of the

assessed fundamentals of the graded issue to other listed equity securities in india.

As IPO Grading does not take cognizance of the price of the security, it is not an investor to aiding inthe decision making process.

All other things remaining equal, a security with stronger fundamentals would command a higher

market price.

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6.3. ii) IPO Grading differs from a Credit Rating

Though the basic elements of the analysis that goes into credit rating and IPO grading are the same -

business prospects, financial prospects, management quality and corporate governance - the

orientation of the analysis and therefore outcomes are very different as the assessment is done for

very distinct objectives.

A credit rating assesses these factors from a debt-holders' perspective, which is very distinct and

sometimes opposite to an equity-holders' perspective. For instance, some companies that raise far

more equity than they need in an IPO and hence suffer a depressed ROE are likely to be assessed

unfavourably in the IPO grading exercise. However, they are likely to be assessed more favourably

in a credit rating exercise, as equity cushions debt repayment.

This distinction of objectives also means that the relative emphasis on the elements is very different

in IPO grading and credit rating. For instance, the assessment of corporate governance while

evaluating an IPO grading would tend to assume a much more pervasive character than credit rating

where the emphasis of assessment is on estimating cash protection available to pay debt.

Credit Rating Agencies Registered with SEBI

a) Credit Analysis & Research Ltd (CARE)

b) ICRA Limited

c) CRISIL

d) FITCH Ratings

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RECENT IPOs

Issuer Company Issue Open Issue Close Offer Price

(Rs.)

Issue

Type

Issue Size

(Crore Rs.)

Astec LifeSciences Limited

IPOOct 29, 2009 Nov 04, 2009 77/- to 82/- IPO-BB 57.75 - 61.50

Den Networks Limited IPO Oct 28, 2009 Oct 30, 2009 195/- to 205/- IPO-BB 390.00 - 410.00

Indiabulls Power Limited

IPOOct 12, 2009 Oct 15, 2009 40/- to 45/- IPO-BB 1,529.10

Thinksoft Global Services

Ltd IPOSep 22, 2009 Oct 01, 2009 115/- to 125/- IPO-BB 45.58

Euro Multivision Limited

IPOSep 22, 2009 Sep 24, 2009 70/- to 75/- IPO-BB 66.00

Pipavav Shipyard Limited

IPOSep 16, 2009 Sep 18, 2009 55/- to 60/- IPO-BB 495.61

Oil India Limited IPO Sep 07, 2009 Sep 10, 2009 950/- to 1050/- IPO-BB 2,777.25

Globus Spirits Limited IPO Aug 31, 2009 Sep 02, 2009 90/- to 100/- IPO-BB 75.00

Jindal Cotex Limited IPO Aug 27, 2009 Sep 01, 2009 70/- to 75/- IPO-BB 84.38

NHPC Limited IPO Aug 07, 2009 Aug 12, 2009 30/- to 36/- IPO-BB 6,038.55

Adani Power Limited IPO Jul 28, 2009 Jul 31, 2009 90/- to 100/- IPO-BB 3,016.52

Raj Oil Mills Limited IPO Jul 20, 2009 Jul 23, 2009 100/- to 120/- IPO-BB 114.00

Excel Infoways Limited IPO Jul 14, 2009 Jul 17, 2009 80/- to 85/- IPO-BB 48.17

Mahindra Holidays and

Resorts India Limited IPO

Jun 23, 2009 Jun 26, 2009 275/- to 325/- IPO-BB 277.96

Rishabhdev Technocable

Limited IPOJun 04, 2009 Jun 09, 2009 29/- to 33/- IPO-BB 22.62

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CHAPTER 7

CASE STUDY

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CASE STUDY

KABIRDAS MOTOR COMPANY PLANS EXPANSION, TO RAISE FUNDS

THROUGH IPO

Chennai, 2nd July, 2009: Kabirdass Motor Company Ltd. plans expansion, To introduce eco-

friendly two- wheelers in India

Incorporated in November 2006, Kabirdass Motor Company Limited (KMCL) is engaged in the

manufacture and distribution of electric bikes and scooters under the brand name 'Xite'.

The Company belongs to the Kabirdass group of companies that also comprises Best Cast IT Ltd.,

S.R.K. Casters and Shareway Securities Ltd. The Company decided to manufacture battery-operated

electric vehicles to encash on the vast experience of the promoters in the auto component industry,

their time-tested ability in vendor development and the growing demand for non- polluting vehicles.

PRODUCT SPECIFICS

An electric bike or scooter is a battery-operated vehicle that is very economical with low

maintenance cost and zero pollution. They use rechargeable batteries that can be charged easily

using a power connection.

Battery-operated scooters provide clean, affordable and eco-friendly city transportation. The

operating costs of the electric bikes and scooters is very low (less than one unit of per charge for

every 50 km), which is a major attraction for the Indian market. The vehicle does not require regular

maintenance, and is targeted at college students, senior citizens, and housewives. In a span of 21

months, the company has sold over 1,852 bikes and scooters

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The first of a series of electric bikes and scooters manufactured by Kabirdass are an advanced zero-

emission, battery-powered (250 Watt to 1500 Watt) scooter. With the rising cost of fuel, which is a

constant worry to most consumers and the ever-increasing pollution levels through vehicle

emissions, these environment-friendly bikes/scooters seem to be the best bet for genNext consumers.

KMCL has found wide acceptance for its products in Tamil Nadu, and is planning to introduce the

same in the other Southern states like Karnataka, Andhra Pradesh and Kerala. Kabirdass which has

been selling XITe bikes and scooters for over a year now, maps its customer profile under 18 years,

or above 40 years.

The XITE RELIANT

It is an innovative electric scooter that is powered by maintenance-free battery 20Ah, that ensures a

smoke-free and noise-free ride. It is also easy to maintain and comes with one year warranty.

Major Events And Achievements

- Winner of the 2007 New Ventures India Business Plan Competition - certificate received from

Investor Forum 2007

First batch of scooters assembled and delivered to customers in Jan 2007.

5 models of electric scooters launched in Feb 2007.

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STRONG MARKETING AND DISTRIBUTION

The Company's umbrella brand "Xite" is well-established in Tamil Nadu, Andhra Pradesh and

Karnataka. Continuous investment and efforts by the company to spread the brand has resulted in

increasing the market share.

The credit for the establishment of "Xite" brand across the southern region of the country goes to the

strong marketing and distribution network. Currently, the Company has nearly 33 dealers and it

plans to increase this number in a phased manner in every part of India. The Company has embarked

upon Localization Program of key components.

The focus on sales forces effectiveness as a key business driver has given a strong competitive edge

to the Company over its competitors. Implementation of business planning tools, focus on technical

support, field coaching and constant evaluation of product knowledge and training has helped in

improving effectiveness and field force productivity.

R&D

Presently the Company has assembled scooters upto 1500 watts of motor power. After expansion,

the company plans to have higher capacity electric scooter having 2,000 watts to 3,000 watts with

long range of 150 to 200 km on single charge. Further it proposes to have standardization and

unification of spares for all types of electric scooter.

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INDUSTRY SUMMARY

Indian two-wheeler industry has embraced the new concept of electric bikes and scooters that are a

very popular mode of transport in developed countries like America, Japan and China. With the

rising cost of fuel, increasing levels of pollution and congestion in urban areas, higher running and

maintenance cost of vehicle, the electrically charged bikes and scooters have a very bright future in

the area of personal transportation.

FINANCIALS

There has been a marginal increase in sales for the financial year 2009 to Rs.260.48 lacs, from Rs.

249.46 lacs in 2008, an increase of 4.42%. During the year, the company entered into an agreement

with Hero Ecotech Ltd. for transfer of rights of the KMC product K1500SI along with the licenseand approvals for the same.

The Company is planning to come out with an IPO shortly

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CHAPTER 8

CONCLUSION

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Initial public offering (IPO), also referred to simply as a "public offering" or "flotation," is when a

company issues common stockorshares to the public for the first time. They are often issued by

smaller, younger companies seeking capital to expand, but can also be done by large privately-

owned companies looking to becomepublicly traded.

In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it determine

what type ofsecurity to issue (common orpreferred), best offering price and time to bring it to

market.

An IPO can be a risky investment. For the individual investor, it is tough to predict what the

stock or shares will do on its initial day of trading and in the near future since there is often little

historical data with which to analyze the company. Also, most IPOs are of companies going

through a transitory growth period, and they are therefore subject to additional uncertainty

regarding their future value. However, in order to make money, calculated risks need to be taken.

IPO Grading is a service aimed at facilitating the assessment of equity issues offered to public.

The grade assigned to any individual issue represents a relative assessment of the fundamentals

of that issue in relation to the universe of other listed equity securities n India. Such grading is

assigned on a five-point scale with higher score indicating stronger fundamentals

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http://en.wikipedia.org/wiki/Common_stockhttp://en.wikipedia.org/wiki/Share_(finance)http://en.wikipedia.org/wiki/Financial_capitalhttp://en.wikipedia.org/wiki/Privately_held_companyhttp://en.wikipedia.org/wiki/Privately_held_companyhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Preferred_stockhttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Common_stockhttp://en.wikipedia.org/wiki/Share_(finance)http://en.wikipedia.org/wiki/Financial_capitalhttp://en.wikipedia.org/wiki/Privately_held_companyhttp://en.wikipedia.org/wiki/Privately_held_companyhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Security_(finance)http://en.wikipedia.org/wiki/Preferred_stockhttp://en.wikipedia.org/wiki/Investment


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CHAPTER 9

BIBLIOGRAPHY

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BIBLIOGRAPHY

www.sebi.gov.in

www.investopedia.com

www.nseindia.com

www.bseindia.com

www.chittorgarh.com

www.intimespectrum.com

NCFM Financial markets modules

(Capital market, Derivatives market)
http://www.sebi.gov.in/http://www.investopedia.com/http://www.nseindia.com/http://www.bseindia.com/http://www.chittorgarh.com/http://www.sebi.gov.in/http://www.investopedia.com/http://www.nseindia.com/http://www.bseindia.com/http://www.chittorgarh.com/

amruta ipo

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