issue of equity shares-b.v.raghunandan
DESCRIPTION
issue procedure, various financial intermediaries in the issue of equity shares in India including book-buildingTRANSCRIPT
Chapter IV: Issue of
Equity Shares
Primary Market
Rationale for Issue of Equity SharesOrganic Growth
Working Capital
Mergers & Take-Over
Financial Restructuring
Exit Route for VCs
Improving Debt-Equity Ratio
Banks meeting Capital Adequacy
Benefits of Issue of Shares
Liquidity
Evaluation of Securities
Enabling Future Funding
Higher Reputation
Better valuation of Shares
Take-Over of Companies
Demerits of Issue of SharesHuge Issue Expenses
Huge Administrative Expenses
Severe Regulation
Volatile Stock Market
Annual Listing Fee
Public Issue of Equity Shares 1.Appointment of a Merchant Banker
-Advisory Service
-Preparation of Basic Documents
-Appointment of other Merchant Bankers
-Preparation of Other Documents : MOU and Due Diligence Certificate
-Preparation and Filing of Final Prospectus
-Allocation of Responsibilities
Public Issue of Equity Shares… 2.Application to a Stock Exchange
3.Agreement with Depositories
4.Appointment of Underwriters
5.Appointment of Registrar to the Issue: Functions of Registrar
6.Appointment of Bankers
7.Appointment of Brokers
8.Appointment of Advertising Agencies: Statutory & Non-Statutory
9.Issue of Shares………..
Issue of Shares Filing Prospectus with SEBI, Registrar of
Companies and Stock Exchanges
Convening Press Conference or Investors’ Meet
Despatch of Application Forms
Opening of Subscription List
Closure of Subscription List
Allotment of Shares
Listing of Shares
Rights Issue of Equity Shares
Appointment of Merchant Bankers
Appointment of a Lead Manager
Appointment of Underwriters
Appointment of Registrar to the Issue
Application for Listing
Agreement with Depositories
Actual Issue
Listing of Shares
Book-BuildingA process undertaken by which a demand
for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document.
-SEBI (Disclosure & Investor Protection) Guidelines 2000
Features of Book-BuildingQuantity Assessment
Price Discovery
A Series of Documents at Different Stages to Invite the Investors
QIB Portion and Public Issue Portion
Lead Book-Running Manager
Rationale for Book-Building
Institutional Investors
Legal Compulsion : Issue Exceeding 5 times the pre-issue networth
Irrelevant Quantum of Finance
Shorter Process of Issue
Financial IntermediariesMerchant Banker as Lead Book-
Runner
Co-Book Runners
Syndicate Members
Registrar to the Issue
Bankers to the Issue
Merchant Banker As Book Runner Facilitating Appointment of Other Book Runners Facilitating Appointment of Syndicate Members Circulation of Information Memorandum Gathering the Input through IM Filing Red Herring Prospectus with SEBI along
with IM Facilitating Appointment of other Fis Filing Due Diligence Certificate with SEBI Determination of Price Band Opening & Closure of Subscription List Allotment of Shares Getting the Shares Listed Filing Final Prospectus
Functions of Syndicate Members
Facilitating Quantity Assessment
Underwriting
Collection of Bid-cum-Application Forms
Functions of Registrar to the Issue
Appointment of Bankers
Printing & Supply of Forms
Allotment
Other Procedure
Issue Procedure
A. Quantity Assessment Stage
B. Pre-Issue Stage
C. Actual Issue Stage
D. Allotment Stage
Quantity Assessment Stage
Appointment of Financial Intermediaries
Preparation of Information Memorandum
Sending Information Memorandum
Determination of Quantity & Price-Band
Underwriting
Pre-Issue StageAppointment of Other Financial Intermediaries
Application to Stock Exchange
Preparation of Draft Red Herring Prospectus
Filing Documents with SEBI
Informing the Registrar of Companies
Agreement with Depositories
Appointment of an Ad Agency
Filing Final Red-Herring Prospectus
Despatch of Application Forms
Opening Escrow Accounts
Actual Issue StageOpening the
Subscription List
Receipt of Application cum Bid Forms
Uploading the
Information
Closure of Subscription
List
Allotment Stage
Determining the Cut-Off Price
Actual Allotment
Crediting Demat Accounts
Listing the Shares
Filing Final Prospectus
Merits of Book-BuildingRealisation of a High Price
Quick Issue Process
Fast Availability of Funds
Lesser Issue Expenses
Quick Update
Lack of Uncertainty
Quick Allotment
Opportunity for Revision
Quick Listing of Shares
Less Administrative Cost
Preference by Institutional Investors
Up-to-date Information
Demerits of Book-BuildingSuitable for Mega Issues Well Developed Market
Manipulation of Price
Unfair Allotment Concentrated Holding
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