IPO ANALYSIS

Group Members:Suraj JallanAbhishek Moonat

Guided By:Prof. Abhay Raja

What Is IPO ?

Process of selling securities to public in primary market

Made with 2 types –

o Fixed Price Issues

o Book building Issues

Done to raise Capital

Process is directed towards both institutional & the retail investors

IPO DEFINITION

An initial public offering (IPO) is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

ELIGIBILITY CRITERIA

Net tangible assets of Rs. 3.00 Crores in each of the preceding 3 years.Track record of distributable profits at least 3 out of 5 preceding years.The company has a net worth of Rs. 1.00 Crore in preceding 3 years.

Why IPO is done?

New capitaloAlmost all companies go public primarily because they need money to expand the business

Future capitaloOnce public, firms have greater and easier access to capital in the future

Mergers and acquisitionso Its easier for other companies to notice and evaluate a public firm for potential synergieso IPOs are often used to finance acquisitions

IPOs are used by companies to raise capital for expansion, to possibly monetize the investments of early private investors, and to become publicly traded enterprises.

A company selling shares is never required to repay the capital to its public investors.

After the IPO, when shares trade freely in the open market, money passes between public investors.

The Process of IPO

Company nominates lead merchant banker(s)Disclose of securities to be issued & price band for biddingAppointment of syndicate membersBidding processProcess normally remains for 5 daysBids have to be entered within the specified price bandOn the closure of the process, the book runners evaluates the price levelsAt last the book runners & the issuer decides the final priceAllocation of securities is made to the successful biddersRest get refund orders.

ASBA Meaning

ASBA is the process for giving an authorization to block the

application money in the bank account, for subscribing an issue.

At the time of allotment if his/her application is selected, the amount

is debited from his bank A/c

Eligibility for ASBA

Is a “Resident Retail Individual Investor” i.e. applying for shares/ securities up to RS 2,00,000/-

Is bidding at cut-off or specified price with in price band along with number of shares bid for.

Is applying through blocking of funds in a bank account with the Self Certified Syndicate Banks (SCSB);

Has agreed not to revise his/her bid;

Is not bidding under any of the reserved categories.

Benefits of ASBA for InvestorThe application form is simpler.

The investor continues to earn interest on the application money as the same remains in the bank account.

The investor deals with the known intermediary i.e. its own bank.

The investor does not have to bother about refunds.

The investor need not pay the application money by cheque rather the investor submits ASBA which accompanies an authorization to block the bank account to the extent of the application money. 

TYPES OF INVESTORSQualified Institutional Buyer (QIB) is one that owns and invests, on a discretionary basis, at least Rs 10 crore in securities; for a broker-dealer the threshold is Rs 1 crore.

An Anchor Investor refers to a QIB making an application of a value of at least Rs. 10 crore or more in the public issue.

Retail Individual Investors (RIIs) means an investor who applies or bids for securities of or for a value of not more than Rs. 2,00,000.

Non Institutional Investors (NIIs): All applicants, other than QIBs or individuals applying for less than Rs. 2,00,000 are considered as NIIs.

Success and Failure Probability

QUESS CORP.IPO

ABOUT QUESS CORP.

Quess Corp Limited is India’s leading integrated business services provider established in 2007 as IKYA Human Capital Solutions Ltd.

It is headquartered in Bangalore, India and is a subsidiary of Thomas Cook India.

Quess offers services across many sectors like IT and ITES staffing, managing facilities, F&B sector, skill development training, general staffing, HR solutions, engineering services, etc.

Offer Date 29th June- 1st July

Price Band Rs. 310 – 317 per Share

Minimum Application 45 Shares

Reserved for QIB 30%

Reserved for Non Institutional Bidders 15%

Reserved for retail 10%

Anchor Investors 45%

Total Amount to be raised Rs. 400 Crore

Total No. Of Share on sale 12,59,53,353 (12.6 cr.) shares

Got BID for 18,13,60,48,489 (1813.61 cr.) shares

Subscribed by 143.99 times

ABOUT IPO

OBJECTIVES OF ISSUE

Repayment of debt availed by the Company;Funding capital expenditure requirements of the Company and their Subsidiary, MFX US;Funding incremental working capital requirement;Acquisitions and other strategic initiatives; andGeneral corporate purposes.

Performance of Issue

Issue Price: 317Yesterday’s closing Price: 487.40Growth Rate: 53.75%

Basis of allotment

A. Allotment to Retail Individual Investors (After Technical Rejections)

B. Allotment to Non Institutional Investors (After Technical rejections)

C. Allotment to QIBs excluding Anchor Investors

DEMAND SUMMARY

QUICK HEAL IPO

ABOUT QUICK HEAL

Quick Heal Technologies Ltd., founded in 1993, is an IT security

solutions provider. Quick Heal has partnered with Microsoft and Intel. The company has global offices in UAE, US, Japan and Kenya.It has a network of 15000+ channel partners in more than 100 countries worldwide.

Offer Date 8th Feb – 10th Feb

Price Band Rs. 311 – 321 per Share

Minimum Application 45 Shares

Reserved for QIB 20%

Reserved for Non Institutional Bidders 15%

Reserved for retail 35%

Anchor Investors 30%

Total Amount to be raised Rs. 451.25 Crore

Total No. Of Share on sale 1,40,57,719 (1.41 cr.) Shares

Got BID for 11,25,37,170 (11.25 cr.) Shares

Subscribed by 8.005 times

ABOUT IPO

Advertising and sales promotion;

Capital expenditure for research and development;

Purchase, development and renovation of office premises in Chennai, Kolkata, Pune and New Delhi; and

General corporate purposes.

OBJECTIVES OF ISSUE

Performance of Issue

Issue Price: 321Yesterday’s closing Price: 262.26Growth Rate: (18.29%)

BASIS OF ALLOTMENTA. Allotment to Retail Individual Investors (After Technical Rejections)

B. Allotment to Non Institutional Investors (After Technical rejections)

C. Allotment to QIBs excluding Anchor Investors

D. Allotment to Anchor Investors

DEMAND SUMMARY

How to know, Where to invest P/E Ratio

Industry’s Growth Rate

Company’s Position in Industry

Company Competes in a Fast Growing Market

Past Track Record

Current Company Affairs

Performance in Recessions

No. of Knowhow & IPR

CONCLUSION

Quess Corp Quick HealIndustry Engineering Compuers-SoftwaresP/E Ratio 65.49 36.43Industry P/E Ratio 22.27 19.05Industry Growth Rate 16% 12%Market Share Not Available 30%

THANK YOU…