Green Shoe OptionGreen Shoe Option

A Green Shoe option means an option of A Green Shoe option means an option of allocating shares in excess of the shares allocating shares in excess of the shares included in the public issue and operating included in the public issue and operating a post-listing price stabilizing mechanism a post-listing price stabilizing mechanism for a period not exceeding 30 days for a period not exceeding 30 days through a Stabilising Agent.through a Stabilising Agent.

This is an arrangement wherein the issue This is an arrangement wherein the issue would be over allotted to the extent of a would be over allotted to the extent of a maximum of 15 per cent of the issue size. maximum of 15 per cent of the issue size.

From an investor's perspective, an issue From an investor's perspective, an issue with green-shoe option provides more with green-shoe option provides more probability of getting shares and also that probability of getting shares and also that post-listing price may show relatively post-listing price may show relatively more stability as compared to marketmore stability as compared to market

A greenshoe option can provide A greenshoe option can provide additional price stability to a security additional price stability to a security issue, since the underwriter has the ability issue, since the underwriter has the ability to increase supply and smooth out price to increase supply and smooth out price fluctuations if demand surges too high.fluctuations if demand surges too high.

Historically, the term “green shoe” (also Historically, the term “green shoe” (also written “written “greenshoegreenshoe”) comes from the ”) comes from the American company Green Shoe Corporation, American company Green Shoe Corporation, which first introduced this technique at the which first introduced this technique at the time of its flotation.  The existence and time of its flotation.  The existence and potential exercise of a green shoe must be potential exercise of a green shoe must be expressly mentioned in the prospectus, in expressly mentioned in the prospectus, in order to guarantee investorsorder to guarantee investors transparency transparency regarding the offer mechanism.regarding the offer mechanism.

The issuing company should seek The issuing company should seek authorisation for the possibility of further authorisation for the possibility of further issues to SAissues to SA

It should appoint one of the lead manger as SAIt should appoint one of the lead manger as SA The SA should enter into an agreement with The SA should enter into an agreement with

the issuer company clearly stating the terms the issuer company clearly stating the terms and conditions and fees to be charged for GSOand conditions and fees to be charged for GSO

He will also enter into an agreement with the He will also enter into an agreement with the promoters who would lend their sharespromoters who would lend their shares

The details of these two agreements must be The details of these two agreements must be disclosed in the Red herring prospectus and disclosed in the Red herring prospectus and final prospectusfinal prospectus

The lead book runner, in consultation with SA The lead book runner, in consultation with SA will determine the number of extra shares to be will determine the number of extra shares to be allottedallotted

The SA should borrow shares from the The SA should borrow shares from the promoterspromoters

They should be in dematerialised formThey should be in dematerialised form Allocation should be on a proportionate basisAllocation should be on a proportionate basis The stabilisation mechanism will be available The stabilisation mechanism will be available

for the period disclosed by the company for the period disclosed by the company subject to a maximum limit of 30 days from subject to a maximum limit of 30 days from the date of listingthe date of listing

The SA will open a GSO Bank A/C and a The SA will open a GSO Bank A/C and a GSO Demat A/CGSO Demat A/C

The money received will be deposited in the The money received will be deposited in the GSO Bank A/CGSO Bank A/C

The SA will determine the timing of buying The SA will determine the timing of buying the shares, price, quantitythe shares, price, quantity

The shares so bought will be credited to the The shares so bought will be credited to the GSO Demat A/C and money will be paid GSO Demat A/C and money will be paid through the GSO Bank A/Cthrough the GSO Bank A/C

The shares should be returned to the promoters The shares should be returned to the promoters within two working days from the closure of within two working days from the closure of stabilisation periodstabilisation period

If the SA fails to buy the shares from the If the SA fails to buy the shares from the market, the issuer company would allot shares market, the issuer company would allot shares to the extent of the shortfall within 5 days of to the extent of the shortfall within 5 days of the closure of the stabilisation periodthe closure of the stabilisation period

These shares would be returned to the These shares would be returned to the promoterspromoters

The GSO Demat A/C will be closedThe GSO Demat A/C will be closed The company will be making a final listing of The company will be making a final listing of

these additional sharesthese additional shares The balance of GSO Bank A/C, if any, will be The balance of GSO Bank A/C, if any, will be

transferred to Investors Protection Fund of the transferred to Investors Protection Fund of the concerned Stock Exchangeconcerned Stock Exchange

The GSO Bank A/C will be closedThe GSO Bank A/C will be closed

ICICI BankICICI Bank

The greenshoe option of Rs 450 crore in ICICI The greenshoe option of Rs 450 crore in ICICI Bank's public issue, was used to stabilise its Bank's public issue, was used to stabilise its share price share price

Given the issue's size, price volatility was Given the issue's size, price volatility was expected in the marketexpected in the market

The bank had appointed DSP Merrill Lynch The bank had appointed DSP Merrill Lynch Ltd as the stabilising agent to buy its shares Ltd as the stabilising agent to buy its shares whenever price fell below the issue level. whenever price fell below the issue level.

Under the greenshoe option, LIC, which held 7.8 per Under the greenshoe option, LIC, which held 7.8 per cent stake in the bank (before the public issue), cent stake in the bank (before the public issue), loaned shares worth Rs 450 crore to DSP Merril loaned shares worth Rs 450 crore to DSP Merril Lynch. These shares were issued to subscribers along Lynch. These shares were issued to subscribers along with the fresh issue of Rs 3,050 crore.with the fresh issue of Rs 3,050 crore.

Of the money, thus, collected by lead managers, Rs Of the money, thus, collected by lead managers, Rs 450 crore were kept in an escrow account. This 450 crore were kept in an escrow account. This amount were used by DSP Merrill Lynch to buy amount were used by DSP Merrill Lynch to buy shares in the secondary market. The secondary shares in the secondary market. The secondary market intervention continued for a period of one market intervention continued for a period of one month after listing or whenever the amount of Rs 450 month after listing or whenever the amount of Rs 450 crore was exhaustedcrore was exhausted

BOOK BUILDINGBOOK BUILDING

BOOK BUILDING REFERS TO A PROCESS BY BOOK BUILDING REFERS TO A PROCESS BY WHICH DEMAND FOR THE SECURITIES WHICH DEMAND FOR THE SECURITIES PROPOSED TO BE ISSUED BY A BODY PROPOSED TO BE ISSUED BY A BODY CORPORATE IS ELICITED AND BUILT UP AND CORPORATE IS ELICITED AND BUILT UP AND THE PRICE FOR SUCH SECURITIES IS THE PRICE FOR SUCH SECURITIES IS ASSESSED FOR THE DETERMINATION OF THE ASSESSED FOR THE DETERMINATION OF THE QUANTUM OF SUCH SECURITIES TO BE QUANTUM OF SUCH SECURITIES TO BE ISSUED BY MEANS OF ISSUED BY MEANS OF NOTICE/CIRCULAR/ADVERTISEMENT/DOCUMNOTICE/CIRCULAR/ADVERTISEMENT/DOCUMENT OR INFORMATION MEMORANDA OR ENT OR INFORMATION MEMORANDA OR OFFER DOCUMENT.OFFER DOCUMENT.

NEW PRICE DISCOVERY NEW PRICE DISCOVERY TECHNIQUETECHNIQUE

IN CASE OF A FIXED PRICE METHOD, IN CASE OF A FIXED PRICE METHOD, THE ISSUE PRICE IS DETERMINED BY THE ISSUE PRICE IS DETERMINED BY THE ISSUER AND THE LEAD MANAGERTHE ISSUER AND THE LEAD MANAGER

IN A BOOK BUILDING METHOD THE IN A BOOK BUILDING METHOD THE ISSUER DETERMINES A FLOOR PRICE ISSUER DETERMINES A FLOOR PRICE OR PRICE BANDOR PRICE BAND

NEW PRICE DISCOVERY NEW PRICE DISCOVERY TECHNIQUETECHNIQUE

THE ISSUER INVITES BIDS FROM THE THE ISSUER INVITES BIDS FROM THE PROSPECTIVE INVESTORSPROSPECTIVE INVESTORS

BASED ON THE INHERENT DEMAND BASED ON THE INHERENT DEMAND FROM THE INVESTORS, THE ISSUER FROM THE INVESTORS, THE ISSUER AND THE LEAD MANAGER AND THE LEAD MANAGER DETERMINES THE ISUUE PRICE, (CUT-DETERMINES THE ISUUE PRICE, (CUT-OFF PRICE) NUMBER OF SECURITIES TO OFF PRICE) NUMBER OF SECURITIES TO BE OFFERED ETC.BE OFFERED ETC.

INVESTORS DETERMINE INVESTORS DETERMINE THE ISSUE PRICETHE ISSUE PRICE

IT ALLOWS INVESTORS TO DETERMINE IT ALLOWS INVESTORS TO DETERMINE THE ISSUE PRICETHE ISSUE PRICE

THE ISSUE IS PRICED ON THE BASIS OF THE ISSUE IS PRICED ON THE BASIS OF A REALISTIC ASSESSMENT OF THE A REALISTIC ASSESSMENT OF THE DEMAND FOR SECURITIES AND HENCE DEMAND FOR SECURITIES AND HENCE THE MOST FAIR PRICE IS DETERMINEDTHE MOST FAIR PRICE IS DETERMINED

PUBLIC ISSUE OF 10000000 EQUITY PUBLIC ISSUE OF 10000000 EQUITY SHARES OF Rs.10 EACH AT A PRICE BAND SHARES OF Rs.10 EACH AT A PRICE BAND

OF Rs.50 TO Rs.60.OF Rs.50 TO Rs.60.

BID PRICEBID PRICE NO. OF SHARESNO. OF SHARES CUMULATIVE TOTALCUMULATIVE TOTAL

5050 500000500000 3410000034100000

5151 400000400000 3360000033600000

5252 700000700000 3320000033200000

5353 20000002000000 3250000032500000

5454 40000004000000 3050000030500000

5555 50000005000000 2650000026500000

5656 60000006000000 2150000021500000

5757 40000004000000 1550000015500000

5858 30000003000000 1150000011500000

5959 50000005000000 85000008500000

6060 35000003500000 35000003500000

TOTALTOTAL 3410000034100000

SPL INDUSTRIES LTD.SPL INDUSTRIES LTD.PUBLIC ISSUE OF 9000000 EQUITY SHARES OF Rs.10 PUBLIC ISSUE OF 9000000 EQUITY SHARES OF Rs.10

EACH AT A PRICE BAND OF Rs.60 TO Rs.70EACH AT A PRICE BAND OF Rs.60 TO Rs.70

BID PRICEBID PRICE NO. OF SHARESNO. OF SHARES CUMULATIVE TOTALCUMULATIVE TOTAL

6060 274700274700 263040200263040200

6161 331300331300 262765500262765500

6262 1580015800 262434200262434200

6363 6520065200 262418400262418400

6464 900900 262353200262353200

6565 702400702400 262352300262352300

6666 107000107000 261649900261649900

6767 61006100 261542900261542900

6868 4220042200 261536800261536800

6969 15001500 261494600261494600

70 & CUT OFF70 & CUT OFF 261493100261493100 261493100261493100

TOTALTOTAL 263040200263040200

ALLOTMENTALLOTMENT

UPTO 50% OF THE ISSUE IS TO BE UPTO 50% OF THE ISSUE IS TO BE ALLOCATED TO QUALIFIED ALLOCATED TO QUALIFIED INSTITUTIONAL BUYERS ON A INSTITUTIONAL BUYERS ON A PROPORTIONATE BASIS OUT OF WHICH PROPORTIONATE BASIS OUT OF WHICH 5% IS TO BE ALLOCATED ON A 5% IS TO BE ALLOCATED ON A PROPORTIONATE BASIS TO MUTUAL PROPORTIONATE BASIS TO MUTUAL FUNDSFUNDS

ALLOTMENTALLOTMENT

NOT LESS THAN 15% OF THE ISSUE IS TO BE NOT LESS THAN 15% OF THE ISSUE IS TO BE AVAILABLE FOR ALLOCATION ON AVAILABLE FOR ALLOCATION ON PROPORTIONATE BASIS TO NON PROPORTIONATE BASIS TO NON INSTITUTIONAL BIDDERS/HIGH NETWORTH INSTITUTIONAL BIDDERS/HIGH NETWORTH INDIVIDUALINDIVIDUAL

NOT LESS THAN 35% OF THE ISSUE IS TO BE NOT LESS THAN 35% OF THE ISSUE IS TO BE MADE AVAILABLE FOR ALLOCATION ON MADE AVAILABLE FOR ALLOCATION ON PROPORTIONATE BASIS TO RETAIL PROPORTIONATE BASIS TO RETAIL INVESTORSINVESTORS

STEPS IN BOOK BUILDINGSTEPS IN BOOK BUILDING

THE ISSUER COMPANY APPOINTS A THE ISSUER COMPANY APPOINTS A LEAD MERCHANT BANKER AS BOOK LEAD MERCHANT BANKER AS BOOK RUNNER LEAD MANAGER (BRLM)RUNNER LEAD MANAGER (BRLM)

THE LEAD MANAGER AND THE ISSUER THE LEAD MANAGER AND THE ISSUER COMPANY PREPARES A DRAFT COMPANY PREPARES A DRAFT PROSPECTUS AND SUBMITS IT TO SEBIPROSPECTUS AND SUBMITS IT TO SEBI

STEPS IN BOOK BUILDINGSTEPS IN BOOK BUILDING

THE BRLM APPOINTS SYNDICATE MEMBERS THE BRLM APPOINTS SYNDICATE MEMBERS FOR UNDERWRITING THE ISSUEFOR UNDERWRITING THE ISSUE

BID PERIOD IS FIXED AND THE BRLM STARTS BID PERIOD IS FIXED AND THE BRLM STARTS MARKETING THE ISSUE BY CIRCULATING MARKETING THE ISSUE BY CIRCULATING THE COPY OF DRAFT PROSPECTUS AMONG THE COPY OF DRAFT PROSPECTUS AMONG THE SYNDICATE MEMBERS AND QIBsTHE SYNDICATE MEMBERS AND QIBs

STEPS IN BOOK BUILDINGSTEPS IN BOOK BUILDING

THE SYNDICATE MEMBERS CREATE THE SYNDICATE MEMBERS CREATE DEMAND AND ASK FOR BIDS FROM EACH DEMAND AND ASK FOR BIDS FROM EACH INVESTORINVESTOR

THE SYNDICATE MEMBERS AGGREGATE THE SYNDICATE MEMBERS AGGREGATE AND FORWARD ALL OFFERS TO THE BRLMAND FORWARD ALL OFFERS TO THE BRLM

THE PROSPECTIVE INVESTOR CAN REVISE THE PROSPECTIVE INVESTOR CAN REVISE THEIR BID DURING THE BIDDING PERIODTHEIR BID DURING THE BIDDING PERIOD

STEPS IN BOOK BUILDINGSTEPS IN BOOK BUILDING

THE BRLM RUNS THE BOOK TO THE BRLM RUNS THE BOOK TO MAINTAIN A RECORD OF THE DEMAND MAINTAIN A RECORD OF THE DEMAND FOR THE SHARES OF THE COMPANY AT FOR THE SHARES OF THE COMPANY AT VARIOUS PRICESVARIOUS PRICES

BOOK CLOSEDBOOK CLOSED

T+1T+1

THE BRLM AND THE ISSUER COMPANY THE BRLM AND THE ISSUER COMPANY DETERMINES THE ISSUE PRICE (CUT DETERMINES THE ISSUE PRICE (CUT OFF PRICE) AND THE SIZEOFF PRICE) AND THE SIZE

T+2T+2

REGISTRAR DRAWS THE ALLOCATION REGISTRAR DRAWS THE ALLOCATION LISTLIST

ALL ENTERED BIDS ASSUMED AS ALL ENTERED BIDS ASSUMED AS VALIDVALID

T+3T+3

STOCK EXCHANGES APPROVE BASIS OF STOCK EXCHANGES APPROVE BASIS OF ALLOCATIONALLOCATION

FINAL PROSPECTUS PRINTED AND FINAL PROSPECTUS PRINTED AND SUBMITTED TO ROCSUBMITTED TO ROC

CONFIRMATION OF ALLOCATION NOTE SENT CONFIRMATION OF ALLOCATION NOTE SENT TO QIBsTO QIBs

ALLOCATION DETAILS ELECTRONICALLY ALLOCATION DETAILS ELECTRONICALLY COMMUNICATED BY REGISTRAR/COMPANY COMMUNICATED BY REGISTRAR/COMPANY TO BROKERSTO BROKERS

T+4T+4

PAY-IN (ONLY HIGH VALUE).PAY-IN (ONLY HIGH VALUE). BANKERS TO CONFIRM CLEARENCE OF FUNDBANKERS TO CONFIRM CLEARENCE OF FUND BOARD MEETINGBOARD MEETING STOCK EXCHANGES TO ISSUE THE LISTING STOCK EXCHANGES TO ISSUE THE LISTING

AND TRADING PERMISSIONAND TRADING PERMISSION COMPANY TO INSTRUCT NSDL/CDSL TO COMPANY TO INSTRUCT NSDL/CDSL TO

CREDIT SHARES TO THE DEMAT ACCOUNT CREDIT SHARES TO THE DEMAT ACCOUNT OF BROKERSOF BROKERS

T+5T+5

BROKERS ACCOUNT TO BE CREDITED BROKERS ACCOUNT TO BE CREDITED WITH SHARESWITH SHARES

BROKERS TO CREDIT SHARES TO THE BROKERS TO CREDIT SHARES TO THE DEMAT ACCOUNT OF INVESTORSDEMAT ACCOUNT OF INVESTORS

T+6T+6

TRADING COMMENCESTRADING COMMENCES

CONCLUSIONCONCLUSION

THEREFORE BOOK BUILDING IS A PROCESS THEREFORE BOOK BUILDING IS A PROCESS OF PRICE AND DEMAND DISCOVERY FOR OF PRICE AND DEMAND DISCOVERY FOR DETERMINING THE FINAL PRICE OF THE DETERMINING THE FINAL PRICE OF THE SECURITIES ON THE BASIS OF DEMAND SECURITIES ON THE BASIS OF DEMAND GENERATED FOR NUMBER OF EQUITY GENERATED FOR NUMBER OF EQUITY SHARES OR OTHER SECURITIES AT VARIOUS SHARES OR OTHER SECURITIES AT VARIOUS PRICE LEVELS FOR ARRIVING AT THE FINAL PRICE LEVELS FOR ARRIVING AT THE FINAL PRICE FOR SUBSCRIBING TO THE ISSUE.PRICE FOR SUBSCRIBING TO THE ISSUE.

CONCLUSIONCONCLUSION

IT RESULTS IN FASTER DELIVERY OF IT RESULTS IN FASTER DELIVERY OF FUNDS FUNDS

IT REDUCES COSTIT REDUCES COST MOST REALISTIC PRICEMOST REALISTIC PRICE RISK OF FAILURE OF ISSUE REDUCEDRISK OF FAILURE OF ISSUE REDUCED REDUCTION IN OVERALL TIME REDUCTION IN OVERALL TIME

SCHEDULESCHEDULE

THANK YOUTHANK YOU