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PUBLIC Avinash Pawar ISSUE

36 TYBMS

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PUBLIC ISSUE

Most companies are usually started privately by their promoter(s). However, the promoters' capital and the borrowings from banks and financial institutions may not be sufficient for setting up or running the business over a long term. So companies invite the public to contribute towards the equity and issue shares to individual investors. The way to invite share capital from the public is through a 'Public Issue'. Simply stated, a public issue is an offer to the 4/20/12

TYPES OF ISSUES

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INITIAL PUBLIC OFFER

An

Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer's securities. The sale of securities can be either through book building or through normal public issue.

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PROCEDURE OF ISSUE OF SHARES

When company has been registered, the following procedure is adopted by the company to collect money from the public by issuing of shares:
Issue

of prospectus: When a Public company intends to raise capital by issuing its shares to the public, it invites the public to make an offer to buy its shares through a document called Prospectus. According to Section 60 (1), a copy of prospectus is required to 4/20/12 be delivered to the Registrar for

 To

receive application: After reading the prospectus if the public is satisfied then they can apply to the company for purchase of its shares on a printed prescribed form. Each application form along with application money must be deposited by the public in a schedule bank and get a receipt for the same. The company cannot withdraw this money from the bank till the procedure of allotment has been completed (in case of first allotment, this amount cannot be withdrawn until the certificate to commence 4/20/12 business is obtained and the amount of

 Allotments

of shares: Allotments of shares means acceptance by the company of the offer made by the applicants to take up the shares applied for. The information of allotment is given to the shareholders by a letter known as Allotment Letter, informing the amount to be called at the time of allotment and the date fixed for payment of such money. It is on allotment that share come into existence. Thus, the application money on the share after allotment becomes a part of share capital. Decision to allot the 4/20/12 share is taken by the BOARD OF

 To

make calls on shares: The remaining amount left after application and allotment money due from shareholders may be demanded in one or more parts which are termed as First Call and Second Call and so on. A word Final word is added to the last call. The amount of call must not exceed 25% of the nominal value of the shares and at least 1 month have elapsed since the date which was fixed for the payment of the last preceding call, for which at least 14 days notice specifying the time and place must be 4/20/12 given

RUSHIL DECOR PVT. LTD.

Rushil Decor, a decorative laminated

sheets manufacturer, has come out with an IPO of 56,43,750 equity shares of face value Rs 10 each. The issue includes promoters contribution of 2,43,750 equity shares and issue to the public of 54 lakh equity shares.

The company manufactures decorative laminated sheets with a network of branches, distributors and dealers across India. Company offers comprehensive engineered interior products including decorative laminate sheets and plain particle boards.

The IPO opened on June 20 and closed on June 23, 2011. The company had fixed the price band at Rs 63-72 per share.

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THANK YOU

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