IPOI - INITIALP - PUBLICO - OFFERING

An SSF Presentation

CONTENTS INTRODUCTION

APPLYING FOR AN IPO

THINGS TO BE CONSIDERES BEFORE AN IPO

INTERMEDIARIES

FAQ’S

LARGEST IPOs IN THE WORLD

INTRODUCTION An IPO (initial public offering) is referred to a flotation, which an issuer or a company proposes to the public in the form of ordinary stock or shares. They are generally offered by new and medium sized firms looking for funds to grow. However, it can be done by big privately-owned firms seeking to transform themselves into an openly traded firm.

An IPO can be an unsafe venture for it is tough for an investor to predict how the stock or share will perform on its first trading day and afterwards. Moreover, the historical information available with the company is not sufficient enough to analyze the performance of the stock in Indian market

APPLYING FOR AN IPO When a firm proposes a public issue or IPO, it offers forms for submission to be filled by the shareholders.

Public shares can be bought for a limited period only and as per the law, any IPO should be traded openly only for minimum 3 days and 21 days maximum.

For offers that are sponsored by India financial institutions, the proposal should be traded for maximum 10 days.

The submission form should be duly filled up and submitted by cash, cheque or DD prior to the closing date, in accordance with the guidelines mentioned in the form.

CONTINUED

Things to be considered for an IPO Promoters, their reliability and past records

Firm producing or facilitating services

Product offered by the firm and its potential

Whether the firm has entered into a collaboration with technological firm

Status of the associates

Historical record of the firm providing the Initial Public Offerings

Project value and various techniques of sponsoring the plan

Productivity estimates of the project

Risk aspects engaged in the execution of the plan

Authority that has reviewed the plan

CONTINUED

INTERMEDIARIESMerchant Bankers

Registrar and Share Transfer Agents

Bankers to the Issue

Underwriters Stock Brokers and Sub Brokers

Depositories

7 STEPS FOR A SUCCESSFUL IPO Choosing the Perfect Time

Choosing the Right Team

Definite Goals and Purposes

Choosing the Right Merchant Bankers Capital Restructuring

Creating Investor Interest

Media Campaigns

FAQ’SWhat is SEBI’s Role in an Issue of IPO?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 SEBI’s observation letter is three months only i.e. the company has to open its issue within threemonths period.

FAQ’SDoes it mean that SEBI recommends an issue?SEBI does not recommend any issue nor does take any responsibilityeither for the financial soundness of any scheme or the project forwhich the issue is proposed to be made or for the correctness of the statements made or opinions expressed in the offer document.

Who are the Retail Investor?‘Retail individual investor’ means an investor who appliesor bids for securities of or for a value of not more than Rs.50,000.

FAQ’SWho decides the price of an issue?Indian primary market developed in an era of free 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.

5. Where can I get a form for applying/ bidding for the shares?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.

6. How long will it take after the issue for the 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.

FAQ’S

What is the amount of faith that I can lay on the contents of the documents? And whom should I approach if there are any problems?The document is prepared by an independent specialized agencycalled Merchant Banker, which is registered with SEBI. They are required to do through due diligence while preparing an offer document. The draft offer document submitted to SEBI is put on website for public comments. In case, you have any information about the issuer or its directors or any other aspect of the issue,which in your view is not factually reflected, you may send yourcomplaint to Lead Manager to the issue or to SEBI, Division of Issues and Listing.

FAQ’S

LARGEST IPOs IN THE WORLDAgricultural Bank of China $22.1B in 2010

Industrial and Commercial Bank of China $21.9B in 2006

NTT Mobile Communications $18.4B in 1998

Visa Inc. $17.9B in 2008

AT&T Wireless $10.6B in 2000

Rosneft $10.4B in 2006

Santander Brasil $8.9B in 2009

PRESENTED BY- UNNI KRISHNAN ROLL NO – 03

ANKIT SHAH ROLL NO - 26

HARSH SHAH ROLL NO – 27

ANUJ DAVE ROLL NO - 24

VIRAAT SUD ROLL NO – 37