Initial public offering

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An initial public offering (IPO), referred to simply as an "offering" or "flotation", is
when a company (called the issuer) issues common stock or shares 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 become
publicly traded.
In an IPO the issuer obtains the assistance of an underwriting firm, which helps
determine what type of security to issue (common or preferred), best offering price and
time to bring it to market.
Contents
[hide]

• 1 History

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• 4 Πρ ο χ ε δ υ ρ ε

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• 13 Ε ξ τ ε ρ ν α λ λινκ σ

14 Φ υ ρ τ η ε ρ ρεα δ ι ν γ

[edit] History
This section requires expansion.
In 1602, the Dutch East India Company was the first company to issue stocks and bonds
in the world in an initial public offering.[1]

[edit] Reasons for listing

When a company lists its securities on a public exchange, 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 investors to provide it with capital for future growth,
repayment of debt or working capital. A company selling common shares is never
required to repay the capital to investors.
Once a company is listed, it is able to issue additional common shares via a secondary
offering, thereby again providing itself with capital for expansion without incurring any
debt. This ability to quickly raise large amounts of capital from the market is a key reason
many companies seek to go public.
There are several benefits to being a public company, namely:

• Bolstering and diversifying equity base

• Enabling cheaper access to capital

• Exposure, prestige and public image

• Attracting and retaining better management and employees through liquid equity
participation

• Facilitating acquisitions

• Creating multiple financing opportunities: equity, convertible debt, cheaper bank

loans, etc.

• Increased liquidity for equity holder

[edit] Disadvantages of an IPO

There are several disadvantages to completing an initial public offering, namely:

• Significant legal, accounting and marketing costs

• Ongoing requirement to disclose financial and business information

• Meaningful time, effort and attention required of senior management

• Risk that required funding will not be raised

• Public dissemination of information which may be useful to competitors,

suppliers and customers

[edit] Procedure
IPOs generally involve one or more investment banks known as "underwriters". The
company offering its shares, called the "issuer", enters a contract with a lead underwriter
to sell its shares to the public. The underwriter then approaches investors with offers to
sell these shares.
The sale (allocation and pricing) of shares in an IPO may take several forms. Common
methods include:

• Best efforts contract

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A large IPO is usually underwritten by a "syndicate" of investment banks led by one or
more major investment banks (lead underwriter). Upon selling the shares, the
underwriters keep a commission based on a percentage of the value of the shares sold
(called the gross spread). Usually, the lead underwriters, i.e. the underwriters selling the
largest proportions of the IPO, take the highest commissions—up to 8% in some cases.
Multinational IPOs may have many syndicates to deal with differing legal requirements
in both the issuer's domestic market and other regions. For example, an issuer based in
the E.U. may be represented by the main selling syndicate in its domestic market, Europe,
in addition to separate syndicates or selling groups for US/Canada and for Asia. Usually,
the lead underwriter in the main selling group is also the lead bank in the other selling
groups.
Because of the wide array of legal requirements and because it is an expensive process,
IPOs typically involve one or more law firms with major practices in securities law, such
as the Magic Circle firms of London and the white shoe firms of New York City.
Public offerings are sold to both institutional investors and retail clients of underwriters.
A licensed securities salesperson ( Registered Representative in the USA and Canada )
selling shares of a public offering to his clients is paid a commission from their dealer
rather than their client. In cases where the salesperson is the clients advisor it is notable
that the financial incentives of the advisor and client are not aligned.
In the US sales can only be made through a final Prospectus cleared by the Securities and
Exchange Commission.
Investment Dealers will often initiate research coverage on companies so their Corporate
Finance departments and retail divisions can attract and market new issues.
The issuer usually allows the underwriters an option to increase the size of the offering
by up to 15% under certain circumstance known as the greenshoe or overallotment
option.

[edit] Auction
This section does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unsourced
material may be challenged and removed. (December 2006)
A venture capitalist named Bill Hambrecht has attempted to devise a method that can
reduce the inefficient process. He devised a way to issue shares through a Dutch auction
as an attempt to minimize the extreme underpricing that underwriters were nurturing.
Underwriters, however, have not taken to this strategy very well which is understandable
given that auctions are threatening large fees otherwise payable. Though not the first
company to use Dutch auction, Google is one established company that went public
through the use of auction. Google's share price rose 17% in its first day of trading
despite the auction method. Brokers close to the IPO report that the underwriters actively
discouraged institutional investors from buying to reduce demand and send the initial
price down. The resulting low share price was then used to "illustrate" that auctions
generally don't work.
Perception of IPOs can be controversial. For those who view a successful IPO to be one
that raises as much money as possible, the IPO was a total failure. For those who view a
successful IPO from the kind of investors that eventually gained from the underpricing,
the IPO was a complete success. It's important to note that different sets of investors bid
in auctions versus the open market—more institutions bid, fewer private individuals bid.
Google may be a special case, however, as many individual investors bought the stock
based on long-term valuation shortly after it launched its IPO, driving it beyond
institutional valuation.

[edit] Pricing
The underpricing of initial public offerings (IPO) has been well documented in different
markets (Ibbotson, 1975; Ritter 1984; Levis, 1990; McGuinness, 1992; Drucker and Puri,
2007). While issuers always try to maximize their issue proceeds, the underpricing of
IPOs has constituted a serious anomaly in the literature of financial economics. Many
financial economists have developed different models to explain the underpricing of
IPOs. Some of the models explained it as a consequences of deliberate underpricing by
issuers or their agents. In general, smaller issues are observed to be underpriced more
than large issues (Ritter, 1984, Ritter, 1991, Levis, 1990)
Historically, some of IPOs both globally and in the United States have been underpriced.
The effect of "initial underpricing" an IPO is to generate additional interest in the stock
when it first becomes publicly traded. Through flipping, this can lead to significant gains
for investors who have been allocated shares of the IPO at the offering price. However,
underpricing an IPO results in "money left on the table"—lost capital that could have
been raised for the company had the stock been offered at a higher price. One great
example of all these factors at play was seen with theglobe.com IPO which helped fuel
the IPO mania of the late 90's internet era. Underwritten by Bear Stearns on November
13, 1998, the stock had been priced at $9 per share, and famously jumped 1000% at the
opening of trading all the way up to $97, before deflating and closing at $63 after large
sell offs from institutions flipping the stock. Although the company did raise about $30
million from the offering it is estimated that with the level of demand for the offering and
the volume of trading that took place the company might have left upwards of $200
million on the table.
The danger of overpricing is also an important consideration. If a stock is offered to the
public at a higher price than the market will pay, the underwriters may have trouble
meeting their commitments to sell shares. Even if they sell all of the issued shares, if the
stock falls in value on the first day of trading, it may lose its marketability and hence
even more of its value.
Underwriters, therefore, take many factors into consideration when pricing an IPO, and
attempt to reach an offering price that is low enough to stimulate interest in the stock, but
high enough to raise an adequate amount of capital for the company. The process of
determining an optimal price usually involves the underwriters ("syndicate") arranging
share purchase commitments from leading institutional investors.
On the other hand, some researchers (e.g. Geoffrey C., and C. Swift, 2009) believe that
IPOs are not being under-priced deliberately by issuers and/or underwriters, but the price-
rocketing phenomena on issuance days are due to investors' over-reaction.[2]
Some algorithms to determine underpricing: IPO Underpricing Algorithms

[edit] Issue price

A company that is planning an IPO appoints lead managers to help it decide on an
appropriate price at which the shares should be issued. There are two ways in which the
price of an IPO can be determined: either the company, with the help of its lead
managers, fixes a price or the price is arrived at through the process of book building.
Note: Not all IPOs are eligible for delivery settlement through the DTC system, which
would then either require the physical delivery of the stock certificates to the clearing
agent bank's custodian, or a delivery versus payment (DVP) arrangement with the selling
group brokerage firm.

[edit] Quiet period

Main article: Quiet period
There are two time windows commonly referred to as "quiet periods" during an IPO's
history. The first and the one linked above is the period of time following the filing of the
company's S-1 but before SEC staff declare the registration statement effective. During
this time, issuers, company insiders, analysts, and other parties are legally restricted in
their ability to discuss or promote the upcoming IPO.[3]
The other "quiet period" refers to a period of 40 calendar days following an IPO's first
day of public trading. During this time, insiders and any underwriters involved in the IPO
are restricted from issuing any earnings forecasts or research reports for the company.
Regulatory changes enacted by the SEC as part of the Global Settlement enlarged the
"quiet period" from 25 days to 40 days on July 9, 2002. When the quiet period is over,
generally the underwriters will initiate research coverage on the firm. Additionally, the
NASD and NYSE have approved a rule mandating a 10-day quiet period after a
Secondary Offering and a 15-day quiet period both before and after expiration of a "lock-
up agreement" for a securities offering.
[edit] Stag profit
Stag profit is a stock market term used to describe a situation before and immediately
after a company's Initial public offering (or any new issue of shares). A stag is a party or
individual who subscribes to the new issue expecting the price of the stock to rise
immediately upon the start of trading. Thus, stag profit is the financial gain accumulated
by the party or individual resulting from the value of the shares rising.
For example, one might expect a certain I.T. company to do particularly well and
purchase a large volume of their stock or shares before flotation on the stock market.
Once the price of the shares has risen to a satisfactory level the person will choose to sell
their shares and make a stag profit.

[edit] Largest IPOs

• Petrobras $70B in 2010 [4] [5]

• Γεν ε ρ α λ Μο τ ο ρ σ $23.1B in 2010

• Αγρ ι χ υ λ τ υ ρ α λ Βα ν κ οφ Χη ι ν α $22.1B in 2010[6]

• Ινδυσ τ ρ ι α λ αν δ Χοµ µ ε ρ χ ι α λ Βα ν κ οφ
Χ η ι ν α $21.9B in 2006[7]

• Αµ ε ρ ι χ α ν Ιντ ε ρ ν α τ ι ο ν α λ Ασ σ υ ρ α ν χ ε
$20.5B in 2010[8]

• ΝΤΤ ∆οΧ οΜ ο $18.4B in 1998[9]

• ςισα Ι ν χ . $17.9B in 2008

• Α Τ& Τ Ωιρ ε λ ε σ σ $10.6B in 2000

• Ροσ ν ε φ τ $10.4B in 2006

• Σα ν τ α ν δ ε ρ Βρα σ ι λ $8.9B in 2009

[edit] See also

• Alternative Public Offering

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• Εθυ ι τ ψ χαρϖ ε− ου τ

• Με ρ γ ε ρ σ αν δ αχ θ υ ι σ ι τ ι ο ν σ (M&A)

• Πρ ι ϖ α τ ε πλα χ ε µ ε ν τ
 • Πυ β λ ι χ οφφ ε ρ ι ν γ ωι τ η ο υ τ λισ τ ι ν γ

• Ρεϖ ε ρ σ ε ΙΠΟ

• Σεασ ο ν ε δ εθυ ι τ ψ οφφ ε ρ ι ν γ

• ΣΕΧ Φο ρ µ Σ− 1 (Registration form for certain types of issuers)

• Σεχ ο ν δ α ρ ψ Μα ρ κ ε τ Οφ φ ε ρ ι ν γ

ςεν τ υ ρ ε χαπ ι τ α λ

[edit] References
^ Mondo Visione web site: Chambers, Clem. "Who needs stock exchanges?"
Exchanges Handbook.
^ "Geoffrey C., and C. Swift, 2009, Overreaction in the thrift IPO aftermarket,
Journal of Banking & Finance 33(7), pp. 1285-1298.".
http://digitalcommons.unl.edu/financefacpub/5/.
^ "Quiet Period". Securities and Exchange Commission. August 18, 2005.
http://www.sec.gov/answers/quiet.htm. Retrieved 2008-03-04. "The federal
securities laws do not define the term "quiet period," which is also referred to as
the "waiting period." However, historically, a quiet period extended from the time
a company files a registration statement with the SEC until SEC staff declared the
registration statement "effective." During that period, the federal securities laws
limited what information a company and related parties can release to the public."
^ http://www.financialexpress.com/news/petrobras-raises-70-bn-in-worlds-largest-
ipo/687403
^ Nicholson, Chris V. (September 24, 2010). "Petrobras Raises $70 Billion in Share
Issue". The New York Times. http://dealbook.nytimes.com/2010/09/24/petrobras-
raises-70-billion-in-share-issue/.
^ Anderlini, Jamil (August 13, 2010). "AgBank IPO officially the world’s biggest".
Financial Times. http://www.ft.com/cms/s/0/ff7d528c-a6bc-11df-8d1e-
00144feabdc0.html?ftcamp=rss. Retrieved 2010-08-13.
^ Wines, Michael (July 6, 2010). "China Bank I.P.O. Raises $19 Billion". The New
York Times. http://www.nytimes.com/2010/07/07/business/global/07ipo.html?
src=busln. Retrieved 2010-07-06.
^ http://www.bloomberg.com/news/2010-10-28/aia-will-have-hong-kong-trading-
debut-today-after-rising-in-gray-market-.html
^ "Pricing the 'biggest IPO in history'".
http://www.atimes.com/atimes/China_Business/HI29Cb01.html.
[edit] External links
• Initial Public Offering (IPO) Definition and Calendar, Wikinvest

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δισαδϖα ν τ α γ ε σ αν δ χοσ τ σ

Ιν ι τ ι α λ πυβ λ ι χ οφφ ε ρ ι ν γ ωιτ η ο υ τ αν

υν δ ε ρ ω ρ ι τ ε ρ

[edit] Further reading

• Gregoriou, Greg (2006). Initial Public Offerings (IPOs). Butterworth-Heineman,
an imprint of Elsevier. ISBN 0-7506-7975-1. http://books.elsevier.com/finance/?
isbn=0750679751.

• Killian, Linda (2006). IPOs for Everyone. Wiley. ISBN 978-0471399155.

http://www.renaissancecapital.com/RenCap/AboutUs/Book.aspx.

• Ε µ ε ρ α λ δ ι ν σ ι γ η τ . χ ο µ , Goergen, M., Khurshed, A. and

Mudambi, R. 2007. The Long-run Performance of UK IPOs: Can it be Predicted?
Managerial Finance, 33(6): 401-419.

• Β ε α ρ . χ β α . υ φ λ . ε δ υ Loughran, T. and Ritter, J.R. 2004. Why Has

IPO Underpricing Changed Over Time? Financial Management, 33(3): 5-37.

• ΡΦ Σ. ο ξ φ ο ρ δ ϕ ο υ ρ ν α λ σ . ο ρ γ Loughran, T. and Ritter, J.R.

2002. Why Don't Issuers Get Upset About Leaving Money on the Table in IPOs?
Review of Financial Studies, 15(2): 413-443.

• Ι ν φ ο ρ µ α ω ο ρ λ δ . χ ο µ Khurshed, A. and Mudambi, R. 2002. The

Short Run Price Performance of Investment Trust IPOs on the UK Main Market.
Applied Financial Economics, 12(10): 697-706.

• Μι ν τ ε ρ ε σ τ . χ ο µ

• Β λ α χ κ ω ε λ λ − σ ψ ν ε ρ γ ψ . χ ο µ Bradley, D.J., Jordan, B.D. and

Ritter, J. R. 2003. The Quiet Period Goes Out with a Bang. Journal of Finance,
58(1): 1-36.

• Π α π ε ρ σ . σ σ ρ ν . χ ο µ M.Goergen, M., Khurshed, A. and Mudambi,

R. 2006. The Strategy of Going Public: How UK Firms
Choose Their Listing Contracts. Journal of Business Finance and Accounting,
33(1&2): 306-328.

• Σχ ι ε ν χ ε δ ι ρ ε χ τ . χ ο µ Mudambi, R. and Treichel, M.Z. 2005.

 Cash Crisis in Newly Public Internet-based Firms: An Empirical Analysis.
Journal of Business Venturing, 20(4): 543-571.

• Drucker, Steven and M. Puri, 2007, Banks in Capital Markets, Handbook of

Corporate Finance, Vol. 1, Edited by B. E. Eckbo (2007).
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Χο ν τ α χ τ υσ

What is the Procedure for Issuing an IPO?

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 case we 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.
There is one simple reason why most private business owners decide to sell ownership in
their company in order to trade on the stock market: to raise money. Going public is often
the best way for an already successful business to raise capital.
There are two major options for businesses to raise money:
Take out a business loan
Sell ownership in the company
When a company goes public they are selling ownership in their company.
They may want to expand their business, hire new talented individuals, open more
locations or any number of reasons that require obtaining more capital at the risk of
giving up ownership in their business. Like most of your tough business decisions, you
need to decide why to go public by taking a detailed look at the advantages and
disadvantages.

The IPO Process

Running a Public Company: From IPO to SEC Reporting

Steve Bragg’s book is an essential read for anyone contemplating a public offering or
taking on leadership responsibility in a public company. Not only does he explain the
complicated aspects of registration and reporting, he provides practical examples of
policies, procedures, and controls to keep a public company on the right track. (read
more)
The entire process of taking your private company and turning it into a public company
can become time consuming, but the payoff will be worth the trouble. One process of
taking a company public involves hiring a large investment bank, who acts as underwrite
for an initial public offering. The underwriter decides how much money investors are
willing to offer for shares in the company. An initial public offering (IPO) is then planned
out and the company shares hit the stock market at a predetermined price.
While ultimately the initial capital raised for the company through the IPO will come
from individual investors who purchase shares, the underwriter will usually finance the
transaction, providing capital to the issuing company in advance of the stock going
public.
The complete IPO procedure can take months to complete. If the offering is not
successful, the expenses can still range from $300,000 to $500,000 in legal, printing, and
accounting fees alone. It is critical that you make sure to perform vigilant assessment of
your company, the market, and the entire IPO process ahead of time.

Where to Go Public
A company can decide to go public on the New York Stock Exchange (NYSE),
American Stock Exchange (AMEX), National Association of Securities Dealers
Automated Quotations (NASDAQ), Over the Counter Bulletin Board (OTCBB) and the
Pink Sheets. Many startup companies make a decision to first go public on the OTCBB
and Pink Sheets since there are no asset or revenue requirements. You can then later
‘move up’ to a larger trading market by meeting their requirements. It might help to learn
why do companies issue stock.

Reality of Going Public

It is essential to realize that taking your company public means a lot of time and work
invested to the process. It is also essential to remember that the IPO process is simply a
transaction. It can be very easy to get so caught up in the IPO process that you forget
about running your business and making it successful. The life of the business is
accelerated or doomed by the IPO. The IPO does not keep you in business, nor is it a
guarantee of success. Make sure to remember first what keeps you in business and always
focus on that first.
Hopefully you will now better understand how does a company go public. The entire
process of going public will definitely not happen overnight. If you are interested in
taking your company public, it is a good idea to start the process now of getting
everything together and researching what you want to go in your registration statement.
We recommend that you learn how to incorporate in Nevada and why. You will want to
get started as soon as possible so you can get the wheels turning on your company going
public.
Read more: How Does a Company Go Public? How to Take a Company Public? | Qwoter
http://www.qwoter.com/college/going-public/how-does-a-company-go-
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Going public, the better alternative to a reverse merger with a public shell
“Going Public” is the procedure of selling shares that were once held by a private
company to the general investing public for the very first time; at other times it has also
been called an IPO (Initial Public Offering).
Many experienced businessmen have the grand dream of taking their private company
public. The financial incentives and rewards of becoming a publicly traded company
include opportunities not available to private companies. Of course, the prestige and
glamour are milestones of success when a formerly private company goes public.
However, the many going public vehicles and the new financial responsibilities
associated with a public company can make it a daunting proposition. The going public
process is a multifaceted procedure involving many skills and business disciplines; it can
also be mystifying and perplexing even for the professionally trained.
When private companies choose to go public, the usual reason is to raise capital.
A basic understanding of the many ways private companies can go public and what
securities laws are relevant is in order, and the need to weigh options clearly, is a must.
These are some of the benefits of taking a company public:

• The available sources of capital will multiply because you can now approach
many more prospective investors.

• Investors – as well as company directors – have an exit strategy to sell their shares
and recoup their investment capital.

• Raising capital is easier, and if investment attention about your company grows, it
could uphold a secondary trading market in your stock.

• By offering stock options your company can attract and retain qualified personnel.
step :1(Assigning Underwriter)
Company needs to set up underwriters. Underwriters are nothing but investment banks.
The purpose of underwriters is to assess the business. Underwriters are used to analyse
operational and financial background of the company in order to determine the value of
the company's shares to be sold to the public. The company will sign an agreement with
the lead underwriter to sell shares on the market and the underwriters can proceed to sell
these shares to any interested investors.For large corporations dealing with billions of
dollars of shares, several large investment banks may act as underwriters. These banks
are paid commissions for shares that they sell. The underwriters will also help the
company deal with the legal and financial regulations imposed by the country.
Step :2(Perfoming Legal procedures)
While launching IPO, they reserve some percentage shares for various catagories such as
Retail investors,Institutional Investors and Employees. As soon as the IPO is successfully
launched, companies will need to submit their annual business earnings reports to the
financial securities board since the company's shares will be listed in the stock market. It
changes based on the country. In India, it is SEBI.
Step :3(Grading)
IPO-grading is nothing but Grade which assigned by a Credit Rating Agency registered
with Financial securities. Shortly, it is called as CRISIL . The grade represents a relative
assessment of the fundamentals of that issue in relation to the other listed equity
securities in India. These grading is generally assigned on a five-point benchmark
grade 1 : Poor fundamentals
grade 2 : Below-average fundamentals
grade 3 : Average fundamentals
grade 4 : Above-average fundamentals
grade 5 : Strong fundamentals

Post-Budget, the primary market seems all set to hot up after a brief lull. With stock markets on
fire, another public offer boom appears to be imminent.

Market sources say the three months of March, April and May will see more than two dozen
IPOs and secondary offerings hitting the market to raise over Rs 8,000 crore.

Among the important offers are Oriental Bank of Commerce (estimated to be around Rs 2,000
crore), Bank of Baroda (around Rs 1,500 crore), Allahabad Bank (around Rs 700 crore), YES
Bank (around Rs 300 crore), IVRCL Infrastructure (around Rs 270 crore), Jaypee Hydro Power
(around Rs 180 crore) and 3i Infonet (around Rs 175 crore).

Other public issues in the offing are those of Gokuldas and Provogue. Market sources say lead
managers are getting busy with the peak season.

ICICI Securities, Enam, JM Morgan Securities, Kotak and SBI Caps have landed big
mandates. Most of the offers are taking the book-building route. A few offers have already hit
the market.

These include Punjab National Bank (Rs 3,000 crore), Gateway Distriparks (Rs 150 crore) and
Emami (Rs 35 crore).

The current boom is not dominated by pure IPOs; most large-sized issues have come from
already listed companies. “Overall demand is quite positive. So we expect forthcoming issues
to evoke a good response from investors. Fearing that their demand may not be fully met in
public offers, FIIs have already started buying the shares of banks like OBC and Allahabad
Bank from the secondary market,” says a senior official with a leading merchant banker.

The primary market will also see medium or small-sized issues from existing companies in
non-banking sectors. Era Constructions and Alps Industries are examples of such issues. The
size of these issues ranges from Rs 49 crore to Rs 145 crore.

ICICI Securities (I-Sec) has landed at least half-a-dozen large-sized offers. Apart from the
current PNB issue, I-Sec will also manage a few other major offers like OBC, Allahabad Bank,
Jaiprakash Hydro and 3i Infotech. While the Allahabad Bank offer is expected in the second
week of April, OBC’s offer is likely to hit the market by April-end.

A few issues are set to hit the market next week. For instance, IVRCL Infrastructure and
Projects, which is a listed company, will hit the market on March 18, and is planning to raise
Rs 126 crore via a greenshoe option aggregating Rs 144.9 crore. Enam Financial Consultants is
the sole book-running lead manager to the issue.

Many small and medium sized IT firms, including Servion Global Solutions, Accel-ICIM
Frontline, Bahwan Cybertek and Dax Networks, are planning initial public offerings (IPOs) to
fund their growth and expansion plans.

Though the timeframe for the IPOs is yet to be finalised, it is learnt that the companies would
hit the market in the next 12-18 months.

Many of these companies are closely-held while some of them have significant holdings by
foreign partners or private equity funds.

According to merchant banking sources, there was a strong appetite for good quality IPOs and
these companies could form the next wave from the IT sector, after the first one in the late '80s
and early '90s when Infosys, Satyam and Wipro hit the stock markets.

These IT firms have an annual turnover of Rs 50-150 crore and will look at diluting the capital
base by at least 20 per cent through the public issues.

Servion Global Solutions, which is expected to post a turnover of USD 12 million during this
fiscal, is going ahead with its plan for the IPO, a top company official confirmed.

Private equity funds Citigroup and TDA Capital hold 32 per cent and seven per cent stakes
respectively in the company, but it is not clear whether these funds would exit or dilute their
stakes during the IPO.

Servion Global, according to the company official, was looking at both the domestic and the
overseas markets for the proposed IPO.

Another company which is lining up an IPO is Chennai-based Accel-ICIM Frontline Ltd. "We
are looking at an IPO. It could be during next year," a company official said.

Accel-ICIM Frontline is expected to post a turnover of Rs 156 crore during this fiscal.
Frontline Technologies Corporation, an IT services firm listed on the Singapore Exchange
Main Board, holds 40 per cent stake in the Chennai-headquartered Accel-ICIM.
IT solutions firm Bahwan Cybertek, which is the IT division of Oman-based Bahwan Group, is
also expected to hit the market during the next 12-18 months period. The company, which has
offices in Chennai, Bangalore and Mumbai, houses a significant portion of its 300 employees
at its development centre in Chennai.

"We are planning an IPO. The SEBI (Securities and Exchange Board of India) guidelines
require 20 per cent dilution of the capital through the IPO," S Durgaprasad, Director and CEO
of Bahwan Cybertek, told PTI.

Similarly, networking solutions firm Dax Networks, its country manager C Sujit Singh said,
was "seriously exploring" an IPO to fund its expansion plans for the ASEAN region.

The company which plans to increase its market share in the Indian router market from the
current two per cent to 10 per cent, is confident of raising the required funds for expansion
through the IPO.
List of new IPO