WHAT & WHY ???

An Initial Public Offer (IPO) is the first public offer of securities by a company since its inception.

REASONS : Raising funds to finance capital expenditure and working capital requirements. Financing acquisitions. Debt Refinancing. Exit route for existing investors. To have a widespread shareholder base.

ADVANTAGES

DISADVANTAGES

Facilitates Future funding. Enables Valuation. Provides Liquidity. Increases visibility & reputation. Commands better pricing. As purchase consideration or as an exchange.

Dilution of ownership stake. Involves huge expenses. Disclosures. Increased Regulatory Monitoring. Listing Fees Documentation. Management Time & Efforts

MANAGEMENT OF IPO
KEY TERMS USED :

BOOK BUILDING
ALLOTMENT DRAFT OFFER DOCUMENT RED HERRING PROSPECTUS UNDERWRITERS LEAD MANAGERS

ELIGIBILITY NORMS FOR AN IPO :

Net Tangible Assets of Rs 3 crores for three full years. Distributable profits in at least three years. Net worth of Rs 1 crore in three years. If change in name, at least 50% revenue for the preceding year should be from the new activity. Issue size doesnt exceed 5 times the pre-issue net worth.
Book building process and 50% of the offer to QIBs. Minimum post issue face capital of Rs.10 Crores & Market making for 2 years. 15% participation in project by F/Is or Schedule, 10% of the Project cost from appraiser; 10% of the Issue to QIBs. Minimum post issue face capital of Rs.10 Crores

ALTERNATE ROUTE 1

ALTERNATIVE ROUTE 2

PRE ISSUE OBLIGATION & INTERMEDIARIES

APPOINTMENT OF LEAD MANAGER(S) Due diligence procedure by Lead Manager Appointment of intermediaries

Lead Manager will appoint: a. Registrar to issue b. Legal Advisor c. Bankers to Issue d. Underwriters

MARKETING OF IPO AND ISSUE PROCESS

WHOLESALE MARKETING Meetings with mutual funds, Private Equity players and FIIs. Tie up for firm allotments RETAIL MARKETING: Road Shows and presentation Meeting with leading brokers Advertisement in Print & Electronic Media Press Coverage

IPO PROCESS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Appointment of Underwriter Appointment of Registrars Appointment of the brokers to the issue Appointment of Lawyers Draft Prospectus Filing of prospectus with the Registrar of Companies Printing and dispatch of Application forms Filing of the initial listing application Statutory announcement Processing of applications Establishing the liability of the underwriter Allotment of Shares Listing of the Issue Escrow Account

POST ISSUE OBLIGATIONS

Post issue monitoring reports: These reports shall be submitted with in 3 days from the due dates. Due dates: - 3rd day monitoring report - for book building portion 3rd day from the date of allocation of book building portion -In other cases 3rd day from the date of closure of issue. - Final post issue monitoring report: 3rd day from the date of listing or 78 days from the date of closure of issue, whichever is earlier. - Due diligence certificate with final report Redressal of Investor Grievance related to refund, allotment and other grievances. Coordination with intermediaries a. Underwriters b. Bankers to the issue Basis of allotment Post issue advertisement : giving detail about oversubscription, basis of allotment etc. within 10 days from the date of