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    A

    Project Report On

    Comparison of Initial Public Offer

    In Infrastructure sector

    At

    Premium Brokers

    By

    Soniya Agarwal

    MBA III

    Project Guide

    Mr. Vaishyampayam

    In partial fulfillment of the

    requirement of the

    Two year Full time PGDM program

    of the

    SMVIM

    (St Miras Vishwakarma Institute of Management)

    Pune

    AY: 2007-2008

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    Acknowledgement

    I feel it my profound privilege to express my most sincere gratitude and

    indebtedness to Mr. Pritam Lunawat, Partner, Premium Brokers, Pune, who has been

    instrumental in providing me direction, constant encouragement and cooperation in an

    attempt to take this project to a logical conclusion and understand the deep insights of

    the business & also for providing me an opportunity to undergo summer training at

    their reputed organization and helping me during all the stage of the project.

    I sincerely express my thanks to Ms. Suvarna Dodke who gave me a lot of good

    information about the back office support system and provided me with all the

    resources whenever required. I am also thankful to Mr Hitesh Thakkar, Dealer,

    Premium Brokers who has been given me such a knowledgeable and valuable things in

    Stock market and for his constant support. I am also very much grateful to all the

    employees of the Premium Brokers for their kind & hearty cooperation. Without their

    help and encouragement throughout the tenure I would not have reached the end of the

    project.

    I am also thankful to Mr. Rahul Deshpande, Employee, Kotak Securities

    Limited, East Street, who answered all my doubts regarding the Initial Public Offers

    without which it was difficult for me to carry out my project work.

    Finally I express my sincere gratitude to Mr Vaishyampayam, Project guide, VIM

    for giving me support throughout the project report.

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    Index

    S. No. Contents Page No.

    1. Executive summary 04

    2. Company Profile 05

    3. Objectives of the study 10

    4. Research Methodology 11

    5. Project work undertaken 12

    6. Initial Public Offer 13

    7. Details of the Companies 19

    8. Findings & Analysis 26

    9. Observations & Conclusions 42

    10. Bibliography 43

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    Chapter-I: Executive summary

    I undertook my summer project in Premium Brokers, Pune, which is a stock broking

    firm. I was given a lot of opportunity to learn. The topic of my project is Comparison of

    Initial Public Offer in Infrastructure Sector. Firstly I have explained the Initial Public

    Offer, the preparatory work involved by the company which wants to come up with an

    Initial Public Offer. The Indian capital market is growing and also the Indian IPO market

    which is the eighth largest in the world. The infrastructure sector in India which is

    gaining more and more importance and it is a booming sector in the country. As it is an

    increasing sector the companies in infrastructure sector is selected and its details are

    given. These companies are DLF Limited, Housing Development & Infrastructure

    Limited and Omaxe Limited. These companies came with an IPO during the tenure of my

    internship. I studied the companies in detail and the issue. The issue includes the price

    band, the dates opening and closing, minimum number of shares and its multiples, the

    size of the issue, lead managers, etc. Then the basis of allotment of all the three

    companies was studied, in which I have analyzed which category was allotted how many

    shares. It also includes the table and the charts which makes it easy to understand. Then

    the companies stock performance was studied basically the price and the volume traded.

    This was from the period 1st July 2007 to 30th September 2007, three months stock

    performance of the three companies. Finally after analyzing the above I gave the

    conclusion regarding the three companies.

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    Chapter- II: Company Profile

    PREMIUM BROKERS

    HistoryEstablished in 2005 by a group of Finance experts, Premium Brokers is a

    diversified financial services firm dealing in Share broking, Investment consulting, Real

    Estates, Training and allied services.

    TeamThe core team consists of experts in Finance domain with rich experience in

    capital markets and real estates.

    Pritam Lunawat Gautam Lunawat Prasad Kalbande Dhiren Shah Nahid

    Core Competency

    Customized services and investment advice to achieve your financial objectives.

    Infrastructure

    Strategically located office with state of the art facilities required for stock

    trading, training and other services. Special HNI desks for trading.

    Alliances

    Alliance with Kotak Securities for providing the backbone setup for stock

    broking.

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    Business Concept

    Provide customized business advisory and training services to the investors for

    creating and growing their wealth by offering diversified investment options like equity,

    real estates, bullions and other financial products.

    Work on a long term investment strategy so as to nullify all the volatility of the

    markets and give a continuous and steady return.

    Services Offered

    1. Stock Trading2. Insurance3. Training4. Real Estate and allied services5. Business Development

    1. Stock Trading

    Services Offered

    Equity Derivatives Initial Public Offer Mutual Funds Depository Services Commodities2. Insurance

    Premium Brokers has tied up with HDFC Standard Life and Prudential ICICI for

    General & Life Insurance.

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    Services Offered

    Study and analyze the risk exposure and recommend insurance cover Review current policies and offer recommendations for changing the terms of

    insurance cover to suit clients exposure / requirements

    Ensure timely payment of the premiums and timely renewals Maintain records of the Clients' insurance portfolio and review the same from time to

    time

    In the event of claims, provide assistance in presentation and follow-up of claims3. Training

    Need for training in Capital Markets

    Indias Population 110 crores Investors in capital markets only 6 to 8% Seeing this huge ignorance towards the Capital Markets and Financial

    investments, we feel that it is compulsory for the new breed of investors to learn

    and enter the Capital market for better understanding and good investment

    decision making.

    Compared to the returns in investment options like banks, Govt. bonds and FDs,the Capital Markets provide great growth prospects and opportunities for

    investors to make good returns with limited calculated risk.

    This can be achieved only with proper training and education.

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    Who can attend

    Businessmen, Entrepreneurs, non-finance executives, self employed, house wives,

    students pursuing management and professional courses and persons interested in

    pursuing a career in capital market.

    Courses Offered

    Basic Module Advanced Module Professional Module Technical Analysis

    Faculty

    Classes are conducted by experienced professionals in the capital market

    Pedagogy

    To make the classroom sessions interactive, effective and informative case

    studies, class discussions, assignments, presentations, etc. are used.

    4. Real Estate and Allied services

    We serve as a one-stop shop for those looking to own, occupy, invest, lease or sell

    property. We cater to a wide array of real estate needs across all segments in the real

    estate industry including NRIs and clients from India and overseas.

    Services Offered

    Brokerage Services Advice on investments in property, with lucrative, fixed and safe returns Investment consultancy Property Portfolio Management Services

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    Property Portfolio Management

    Commercial Property Management Residential Property Management Property maintenance Tenancy management Lease negotiations and approval Disposition strategies / sale administration Legal advisory services on real estate transactions5. Business Development

    Strategic Business Planning

    Who can benefit

    Industrialist /Entrepreneur MD / President / CEO of companies Business Unit Head Management student ( MBA )

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    Chapter-III: Objectives of the study

    The study the concept of Initial Public Offer (IPO).

    To study the procedure for IPOs. To study the IPOs of in infrastructure sector the DLF Limited, Housing

    Development and Infrastructure Limited and Omaxe Limited on the basis of issue,

    allotment and performance.

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    Chapter-IV: Research Methodology

    Selection of the topic The topic Comparison of Initial Public Offers in

    infrastructure sector is selected as the infrastructure sector is in boom and the stock

    market is performing well. Also I was allotted the responsibility of IPOs in the

    organization I selected this topic. These companies were selected as they came up with an

    IPO during the tenure of the summer project.

    Objective The objective is to study the IPOs of the companies in infrastructure sector

    such as DLF Limited, Housing Development & Infrastructure Limited and Omaxe

    Limited on the basis of issue, allotment and performance.

    Data Source The source of data is secondary. The secondary data used herein is

    obtained from websites.

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    Chapter-V: Project work undertaken

    The project was carried out in Premium Brokers, Pune. The title of the project is

    Comparison of Initial Public Offer in Infrastructure sector. Mr. Pritam Lunawat,

    Partner, Premium Brokers was very helpful and understanding. He helped me to learn

    how a stock broking firm actually works. The project work undertaken was that of

    Position & Rotation.

    At the beginning of the tenure I was in back office where Ms. Suvarna Dodke,

    Employee, Premium Brokers, taught me how the Kotak back office support system

    works. It consists of holdings, ledgers, client account opening, shares payin and payout,

    etc. I also filled the account opening forms. Later on I was given the responsibility of the

    Initial Public Offers. I studied the Initial Public Offers and called the clients to invest in

    the IPOs. As they agreed for the investment forms were sent to them. I filled the IPO

    forms and those were sent to Kotak Securities Limited, East Street.

    I also viewed the stock market where in Mr. Hitesh Thakkar, Dealer, Premium

    Brokers, taught me how an order entry is made if a particular stock is to be bought or

    sold, the pending orders, market watch, trades, etc. through the function keys. This

    helped me to keep a record of the performance of the companies which came up with

    IPOs.

    This project helped me to gain a lot of practical knowledge and it was a good

    experience working with Premium Brokers, Pune.

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    Chapter-VI: Initial Public Offer

    Introduction

    Initial Public Offer (IPO) refers to the offering of stock in a company to the public

    through a public market. When a company sells stock to the public for the first time it is

    called an initial public offer. Stock is sold in the primary market at an offer price

    determined by the IPO team. Following the financing, the shares are traded in the

    secondary market. Selling stock in the primary market is assisted with investment

    bankers or underwriters that help promote the potential offering. Investors purchasing

    stock in IPOs generally must be prepared to accept very large risks for the possibility of

    large gains.

    Meaning

    An Initial Public Offer (IPO) is the selling of securities to the public in the primary

    market. It is the largest source of funds with long or indefinite maturity for the

    company. A corporate may raise capital in the primary market by way of an initial public

    offer, rights issue or private placement.

    Why does a company go public?

    For the majority of firms going public, they need additional capital to execute long-range

    business models, increase brand name and utilize funds for possible acquisitions. This is

    typical of todays Internet and technology offerings. By converting to corporate status, a

    company can always dip back into the market and offer additional shares through a

    secondary offering.

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    Preparatory work involved by the company for an IPO:

    1. Getting ready

    A company that is thinking about going public should start preparing detailed financial

    results on a regular basis, and developing a business plan if they do not already have one,

    as much as two years in advance of the desired IPO. Soon thereafter, it needs to put its

    IPO team together, consisting of the lead investment bank, an accountant, and a law firm.

    The IPO process officially begins with what is typically called an "all-hands" meeting. At

    this meeting, which usually takes place six to eight weeks before a company officially

    registers with the Securities and Exchange Commission, all the members of the IPO team

    plan a timetable for going public and assign certain duties to each member.

    2. The prospectus

    The most important and time-consuming task facing the IPO team is the development of

    the prospectus, a business document that basically serves as a brochure for the company.

    The prospectus includes all financial data for a company for the past five years,

    information on the management team, and a description of a company's target market,

    competitors, and growth strategy.

    3. The road show

    The next step in the IPO process is known as the road show. The road show usually lasts

    a week or two, with company management meeting with prospective investors to present

    their business plan. Once the road show ends and the final prospectus is printed and

    distributed to investors, company management meets with their investment bank to

    choose the final offering price and size. Investment banks try to suggest an appropriate

    price based on expected demand for the deal and other market conditions. The pricing of

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    an IPO is a balancing act. Investment firms have two sets of clients - the company going

    public, which wants to raise as much money as possible, and the investors buying the

    shares, who expect to see some immediate appreciation in their investment. If interest in

    an IPO is weak, the number of shares in the offering or their price may be cut from the

    expected ranges. If it is strong, the offering price or size can also be raised from initial

    expectations. A company can also postpone an offering because of insufficient demand.

    4. Beginning trading

    Once the offering price has been agreed on, and at least two days after potential investors

    receive the final prospectus, an IPO is declared effective. This is usually done after a

    market closes, with trading in the new stock starting the next day as the lead underwriter

    works to confirm its buy orders. The lead underwriter is primarily responsible for

    ensuring smooth trading in a company's stock during those first few crucial days. This

    could mean supporting the price of a newly issued stock by buying shares in the market,

    or by selling them short (which means selling shares it doesn't have in its account).

    Procedures

    A] Issuers

    Issuers desirous of using NSE's online IPO system are required to comply with the

    following procedures:

    1. Submit a written request as per prescribed format (Letter1, Letter2, BRLM) forusage of electronic facilities and software of NSE

    2. Give details regarding Book Running Lead Manager, Co Book Running LeadManagers and Syndicate Members.

    3. Pay the requisite charges to NSE.

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    B] Trading Members

    The Book Running Lead Manager will give the list of trading members who are eligible

    to participate in the Book Building process to the Exchange. Members have to submit a

    one time undertaking to the Exchange. Eligible trading members have to give in the

    prescribed format details of the user IDs that they would like to use.

    C] Subscribers

    Subscribers can approach any of the approved trading members for submitting bids in the

    NEAT IPO system. On line transaction registration slip are generated automatically after

    entering the bids in to the system which acts as proof of the registration of each Bid

    option.

    Indian IPO market

    India is world's 8th largest IPO market

    India's initial public offering (IPO) market emerged as the eighth largest in the world,

    with $7.23 billion (Rs 30,000 crore) in net proceeds through 78 public issues, as against $

    246 billion raised globally in 2006, consultancy firm Ernst & Young said in its Global

    IPO report.

    Because of the two mega issues from Reliance Petroleum of $1.83 billion and Cairn

    Energy of $1.3 billion, energy companies dominated with more than 50% share of the

    fund raised in 2006. In 2007, the report said, Indian IPOs continue to surge in numbers,

    particularly in energy and real estate sectors.

    Globally, $ 246 billion was raised through 1,729 IPOs in 2006 as against $ 167 billion in

    2005. Greater China's IPO markets soared to an all time high with $56.6 billion through

    175 offerings in 2006. Industrial and Commercial Bank of Chinas IPO of $ 21.9 billion

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    was the biggest issue during the year. The second largest IPO was also from a Chinese

    bank at $ 11 billion.

    China was followed by US companies with total proceeds of $ 34.1 billion. Third highest

    proceeds were raised by Russian companies at $ 18.1 billion. US launched the highest

    number of IPOs with 187 listings, followed by Japan with 185 and China with 175

    listings.

    Emerging markets remained the favorite for investors. The total amount raised by

    companies in BRIC (Brazil, Russia, India and China) in 2006 increased to $ 86 billion

    from $ 29 billion in 2005. The number of listings has also almost doubled to 279.

    Reflecting the rise of more world class financial centers, a shift has been taken place. In

    2006, highest capital of $46.1 billion was raised in Hong Kong Stock Exchange (HKSE),

    amounting to 19% of the total proceeds raised in the global markets. London Stock

    Exchange followed with 13.5% of the proceeds and NYSE ranked third with only 10% of

    the total fund raised during the year.

    E&Y analyst R Balachander said that the rapid growth in emerging market economies

    has resulted in a migration of capital from development economies into the emerging

    markets. He said that the corporate sector is on a growth trajectory which has

    significantly increased their needs for capital. According to the study, India's increasing

    number of larger deals has been driven by the growth of Indian corporations and their

    need for additional capital for potential acquisitions.

    Balachander said India's latest and strongest capital raising trend include localization and

    qualified institutional placements. The report said that RPL with an IPO of $1.8 billion

    and Cairn Energy with $ 1.3 billion listed in the domestic market.

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    Qualified institutional placement has also become very popular in the Indian market as it

    provides the Indian companies opportunities to access the global market. Balachander

    said that QIP placements is a two-way opportunity, for local businesses to gain access to

    global funds without having to list abroad and for foreign investors to invest in Indian

    companies.

    He said that foreign institutional investors make up three-fourth of new capital flowing

    into the market.

    Indian Infrastructure sector

    Historically, the real estate sector in India was unorganized and characterized by

    various factors that impeded organized dealing, such as the absence of a centralized title

    registry providing title guarantee, lack of uniformity in local laws and their application,

    non-availability of bank financing, high interest rates and transfer taxes, and the lack of

    transparency in transaction values.

    In recent years however, the real estate sector in India has exhibited towards

    greater organization and transparency, accompanied by various regulatory reforms, which

    has stimulated demand for land and developed real estate across our business lines.

    Demand for residential, commercial and retail real estate is rising throughout India,

    accompanied by increased demand for hotel accommodation and improved infrastructure.

    Additionally, the tax and other benefits applicable to SEZs are expected to result in a new

    source of real estate demand.

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    Chapter- VII: Details of the Companies

    A] DLF Limited

    DLF Ltd. is the largest real estate development company in India in terms of the

    area of their completed residential and commercial developments. Since 1946, DLF has

    approximately 224 mln sqft, including 22 urban colonies as well as an entire integrated

    3,000 acre township DLF City. DLFs key competitive advantage is its ability to build a

    sizable and quality land bank that it can strategically develop to generate high returns.

    Their reputation attracts multinational clients seeking to occupy multiple locations.

    The company was incorporated in July 1963 as American Universal Electric (India)

    Limited and got renamed as DLF Limited in May 1981.

    The operations of the company span all aspects of real estate development, from

    the identification and acquisition of land, to the planning, execution and marketing of its

    projects, through to the maintenance and management of its completed developments. In

    residential business line, the company builds and sells a wide range of properties

    including houses, duplexes and apartments of varying sizes, with a focus on the higher

    end of the market. In commercial business line, company builds, leases and sells

    commercial office space, with a focus on properties attractive to large multinational

    tenants. The retail business line develops, manages and leases or sells shopping malls,

    which in many cases include cinema complexes. The DLF Group was responsible for

    developing as many as 21 premium urban colonies in Delhi and its neighboring regions,

    including South Extension, Greater Kailash and Hauz Khas in South Delhi.

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    Competitive Strength

    Key competitive strengths of the company are:

    (i) Established brand name and reputation for project execution.

    (ii) Extensive land reserves forming the most important resource.

    (iii) Scale of operations allowing the company to benefit from economies of scale.

    (iv) Projects of the company being strategically located

    (v) Company having a tradition of innovation in the Indian real estate market.

    (vi) Experienced and dedicated management

    Objective of the Public Issue

    DLF Limited aims at using the proceeds of this public issue of shares to:

    (a) finance land acquisition expenditure,

    (b) finance the construction and development costs for some of its existing projects,

    (c) repay certain loans,

    (d) fund expenditures for general corporate purposes and

    (e) achieve the benefits of listing on the Stock Exchanges.

    Some of the main factors that advocate for investments in this public issue of shares

    are:

    Land reserves of 10250 + acres with a developable area of 574 million sq. ft. isowned by the company at various location in the country, providing the basis for

    the future projects for some years.

    Strategic tie-ups and joint ventures with world's leading infrastructure companiessuch as Laing ORourke PLC and Nakheel LLC of Dubai for undertaking

    construction projects.

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    Company is leveraging its leadership position and real estate capabilities intorelated areas like special economic zones (SEZs), infrastructure and hospitality.

    Extensive portfolio of commercial properties complies with the internationalstandards for safety (such as against fire and earthquakes), security and luxury.

    Integrated approach of the company to develop properties comprising of retail andcommercial requirements assists in an incremental demand for properties.

    Diversification plans of the company into unrelated business areas of cinemamultiplexes, insurance (under the joint venture with Prudential), wind energy,

    other (airport management services, leisure & entertainment, etc.).

    Land Reserves

    DLF has land reserves in various strategic locations across India, amounting to 10,255

    acres, with 51% of their Land Reserve in the NCR, 23% in Kolkata, 5% in Goa, 5% in

    Maharashtra, 3% in Indore, 4% in Punjab, 2% in Bangalore and the balance in various

    other states.

    Innovators

    DLF was one of the first developers to anticipate the need for townships on the outskirts

    of fast growing cities and are credited with the growth of Gurgaon. DLF were one of the

    early developers to focus on theme-based projects such as The Magnolias development in

    DLF City which includes a golf course. DLF are one of few developers in India to

    provide commercial space with floor plates of over 100,000square feet. They have been

    an early developer of large shopping malls with integrated entertainment facilities.

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    B] Housing Development and Infrastructure Limited (HDIL)

    HDIL is a part of the Wadhawan Group (formerly known as the Dheeraj Group), which

    has been involved in real estate development in the Mumbai Metropolitan Region for

    almost three decades. Since 1996, HDIL has been satisfying the diverse needs of scores

    of home seekers in Mumbai Metropolitan region. Their business focuses on real estate

    development, including construction and development of residential projects,

    commercial, retail and slum rehabilitation projects.

    Mumbai, as is synonymous with its fast paced life, poses challenges to everyone,

    HDIL acted pro-actively in identifying the intricate needs of its residents and offered

    them just what they needed.

    The customer, because of Mumbais fast lifestyle, was not happy running from

    pillar to post, firstly to identify a house, look for a home loan and then complete all

    formalities. HDIL provided and still provides all services under one roof through tie-ups

    with banks and others. The common man was convinced about the integrity and the

    dedication of the HDIL by means of commitment in completion of projects and providing

    hassle free accommodation. It is the smile on the faces of the customers, which spread

    across the public and private sectors attracting the attention of the corporate sector.

    The mid 90s saw an upsurge in the corporate sector with the entry of several

    multinational companies and business houses. More and more people employed with

    these establishments began their search to have their own home.

    With numerous projects to its credit and lakhs of happy and satisfied home

    buyers, HDIL has carved a niche for itself in the real estate industry and has made its

    mark in the hearts of millions of people. HDIL is also planning to foray into airports

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    and bid for Dharavi projects. Today, HDIL has several projects underway in the Western

    and Eastern suburbs of Mumbai, catering to the customer with varied needs and tastes.

    Other details of HDIL

    As of now, the current land reserves of the company stand at 112 million square

    feet, 80% of these land reserves are in the Mumbai Metropolitan region. The interesting

    thing to note is that 70% of these land reserves are actually owned by the company. So

    this is the differentiating factor between us and all the other companies.

    The company has around 45.5 million square feet of developments in ongoing

    projects; 85% of which the land cost is already paid for. It is across the length and

    breadth of Mumbai that we are present. We have properties in Carmichael Road going all

    the way to Dadar into Bandra, Versova and then going into various other sub-regions of

    Mumbai. We are present now in Hyderabad and Cochin. A few of the other projects that

    we are into are slum rehabilitation scheme as well; although thats only 15% of our

    ongoing projects. We are doing a couple of major schemes in Bandra-Kurla Complex; its

    a 2.8 million square feet development, out of which 1.7 million square feet has been

    agreed to be sold to the Adani Group. 1.1 million square feet is still with us, which we

    will be developing over a period of time. The company also has a 17-acre plot in

    Versova, which along with Anil Dhirubai Ambani Group (ADA Group), is going to be

    put for the Metro rail yard - the development rights for that are with the company.

    As of now, the 112 million square feet that we are talking, about 69.9% is actually

    owned by the company; 15% of it is under MoUs and agreements to acquire. But these

    MoUs do not have any revocation clauses. 11% of that is under joint venture with

    partners, but the joint venture with partners is only to the economic benefit of the project.

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    It is not to the execution, the executions rest with HDIL. We are present in all business

    segments such as commercial, retail, multiplexes, offices.

    No money is being used for any development of planned projects. All the money that we

    are raising now which will be to the tune of 1,400 or 1,500 crore will be utilised for

    construction of ongoing projects. Only a 144 crore, which remains outstanding as land

    payment will be taken out from the proceeds.

    Objects of the issue

    Acquisition of land and land development rights for our Ongoing and Plannedprojects;

    Construction of our Ongoing and Planned projects; and. General corporate purposes

    C] OMAXE Limited

    The company was originally set up as Omaxe Builders Private limited in 1989,

    promoted by Shri. Rohtas Goel , the founder, to undertake construction & contracting

    business. The company further changed its constitution to a limited company known as

    Omaxe Construction Ltd., in 1999. The name of the company has now changed to

    OMAXE LTD from 2006. The company began life as a civil construction and contracting

    company, has Successfully executed more than 120 prestigious Industrial, Institutional,

    Commercial, Residential and Hospital construction projects.

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    The company entered the Real Estate Development business in 2001 and in now

    amongst the large Real Estate Development companies in India. The company has

    executed construction contracts for a number of prestigious Indian private, public sector

    and Multinational's clients.

    Omaxe was founded by Shri. Rohtas Goel , a first generation entrepreneur, a civil

    engineer by qualification and a visionary having more than two decades of experience in

    Construction and Real Estate Development. Mr. Goel, as the Chairman & Managing

    Director of Omaxe has been at the forefront, a man with a mission of building globally

    comparable quality Residential & Commercial projects, his motto Turning Dreams Into

    Realty

    Omaxe has received a number of awards from the industry, recognition of its

    continued efforts towards achieving excellence and quality. The company became the

    first Construction Company of northern India to receive an ISO 9001:2000 Certification.

    The company which was founded as a civil construction and contracting organization

    in1989 and subsequently diversified its business to focus on Real Estate Development

    from the year 2001, to capture the opportunity offered by the growing Real Estate

    markets in India , is today among the large Real Estate Development companies in India.

    The company in a short span of 5 years has completed and delivered 10 projects

    consisting of 8 residential and 2 commercial covering approx 5.13 million sq. ft of area,

    with all on time deliveries. The company currently has 52 projects under development.

    These include 21 group housing projects, 16 integrated townships, 14 shopping malls and

    commercial complexes and 1 hotel. The company is at present developing over 140

    million sq ft of saleable area across 30 towns in 9 states in Northern and Central India.

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    Chapter VIII: Findings & Analysis

    A] ISSUE DETAILS

    Company

    NameDLF

    LIMITED

    HOUSINGDEVELOPMENT AND

    INFRASTRUCTURE

    LIMITED

    OMAXE

    LIMITED

    Type of Issue Book built Book built Book built

    Issue Dates

    Issue OpensIssue Closes

    11-06-0714-06-07

    28-06-0703-07-07

    17-07-0720-07-07

    Total Issue Size

    (No. of Shares)17,50,00,000 3,00,00,000 1,77,96,520

    Price Bands

    Lower (Rs)Upper (Rs)Total Amt (Rs)

    5005509625

    4305001500

    265310552

    Issue

    Allocation

    QIBNonInstitutionalRetail

    1044000001740000052200000

    1764000029400008820000

    1050000017500005250000

    Max Shares

    (For Retail)180 196 320

    Application

    Min & Multiple

    (Shares)

    10 14 20

    Registrar

    Name

    Karvy StockBroking limited

    Karvy Stock BrokingLimited

    Intime SpectrumRegistry Ltd

    Lead Manager Kotak, DSPMerrill Lynch

    Enam, Kotak DSP MerrillLynch

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    Analysis of the table

    DLF Limited came up 1st with the IPO in this study and it had largest number ofshares amongst the three companies.

    The lowest price band is of Omaxe Limited Rs. 265 to Rs. 310 and that of DLFLimited was Rs. 500 to Rs.550.

    As the price band of Omaxe was low a retailer could apply for a maximum of 320shares, for HDIL 196 shares and for DLF 180 shares.

    Minimum application was lowest in DLF 10 shares and Omaxe was 20 shares ,HDIL was in all cases in middle with 14 shares.

    The three companies DLF Limited, Housing Development & InfrastructureLimited and Omaxe Limited adopted the book building method for the issue.

    Securities and Exchange Board of India (SEBI) guidelines defines Book Building as "a

    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".

    Book Building is basically a process used in Initial Public Offer (IPO) for

    efficient price discovery. It is a mechanism where, during the period for which the IPO is

    open, bids are collected from investors at various prices, which are above or equal to the

    floor price. The offer price is determined after the bid closing date.

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    Difference between Book Building Issue and Fixed Price Issue

    In Book Building securities are offered at prices above or equal to the floor prices,whereas securities are offered at a fixed price in case of a public issue.

    In case of Book Building, the demand can be known everyday as the book is built.But in case of the public issue the demand is known at the close of the issue.

    Price at which securities will be allotted is not known in case of offer of sharesthrough book building while in case of offer of shares through normal public

    issue, price is known in advance to investor.

    The Process:

    The Issuer who is planning an IPO nominates a lead merchant banker as a 'bookrunner'.

    The Issuer specifies the number of securities to be issued and the price band fororders.

    The Issuer also appoints syndicate members with whom orders can be placed bythe investors.

    Investors place their order with a syndicate member who inputs the orders into the'electronic book'. This process is called 'bidding' and is similar to open auction.

    A Book should remain open for a minimum of 5 days. Bids cannot be entered less than the floor price. Bids can be revised by the bidder before the issue closes.

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    B] BASIS OF ALLOTMENT

    The Issues were made through the 100% Book Building Process wherein at least 60% of

    the Net Issue was allocated on a proportionate basis to Qualified Institutional Buyers

    (QIBs) (including 5% of the QIB portion that was specifically to be allotted to mutual

    funds), further, not less than 10% of the net Issue was made available for allocation on a

    proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue

    was made available for allocation on a proportionate basis to Retail Bidders, subject to

    valid bids being received at or above the Issue Price.

    The refund orders and allotment advice and notices (where applicable) were dispatched to

    the address of the investors as registered with the depositories. The Refund Orders have

    been over-printed with the Bank Mandate details as registered, if any, with the

    depositories. The shares allocated to successful applicants are being credited to their

    beneficiary accounts subject to validation of the account details with the depositories

    concerned.

    1. DLF LTD

    Public Issue of 17,50,00,000 Equity shares of Rs. 2/- each for cash at a price of Rs. 525/-

    per equity share (including share premium of Rs. 523/- per equity share) aggregating Rs.

    9,187.50 crores referred to as "THE ISSUE"). The issue comprised a reservation of

    10,00,000 equity shares for subscription by employees and the net issue to the public of

    17,40,00,000 equity shares of Rs. 2/- each for Rs. 525/- per equity share. The issue

    constitutes 10.26% of the fully diluted post issue capital of DLF Limited (COMPANY

    or ISSUER).

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    The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange

    Limited ("BSE") on 27th June, 2007. The IPO Committee of the Company at its Meeting

    held at Hyderabad on 28th June, 2007 has approved the basis of allocation of Equity

    Shares and has allotted the shares to various successful applicants. The listing

    applications have been filed with BSE & NSE on June 28, 2007.

    The Issue received 5,60,328 applications for 57,82,28,439 Equity Shares resulting in 3.30

    times subscription. The details of the applications received in the Issue from QIBs, Non-

    Institutional, Retail Individual Investor and Employee categories are as under:

    CategoryNo. of

    ApplicationsNo. of Shares

    applied forSubscription

    (no. of times)

    Qualified InstitutionalBuyers

    219 514460490 4.93

    Non InstitutionalInvestors

    4692 16071530 0.92

    Retail IndividualInvestors

    554467 46892479 0.90

    Employees 950 803940 0.80

    Subscription

    65.30%12.19%

    11.92%

    10.60%

    Qualified Institutional Buyers Non Institutional Investors

    Retail Individual Investors Employees

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    Analysis of the chart:

    A. Allocation to Employees

    The Basis of Allocation to the Employees, who have bid at cut-off or at and above the

    Issue Price of Rs.525 per Equity Share, was finalized in consultation with BSE. The

    category was subscribed to the extent of 0.79 times. Hence FULL and FIRM allotments

    have been made against all valid applications. The total number of shares allotted in this

    category is 799850 Equity Shares to 941 successful applicants. The unsubscribed portion

    of 200150 Equity Shares has been added to QIB category.

    B. Allocation to Retail Individual Investors

    The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off or at

    and above the Issue Price of Rs.525 per Equity Share, was finalized in consultation with

    BSE. The category was subscribed to the extent of 0.85 times. Hence FULL and FIRM

    allotments have been made against all valid applications. The total number of Equity

    Shares allotted in this category is 4,47,19,450 Equity Shares to 525,512 successful

    applicants. The unsubscribed portion of 74,80,550 equity shares has been added to QIB

    category.

    C. Allocation to Non Institutional Investors

    The Basis of Allocation to the Non-Institutional Investors, who have bid at cut-off or at

    and above the Issue Price of Rs.525 per Equity Share, was finalized in consultation with

    BSE. The category was subscribed to the extent of 0.84 times. Hence FULL and FIRM

    allotments have been made against all valid applications.

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    The total number of Equity Shares allotted in this category is 1,46,11,290 Equity Shares

    to 2,172 successful applicants. The spill over portion of 2,788,710 Equity Shares has

    been added to QIB category.

    D. Allocation to QIBs

    Allocation to QIBs has been done on a proportionate basis in consultation with BSE. As

    per the SEBI guidelines, Mutual Funds were initially allotted 5% of the quantum of

    shares available (57,43,471) and other QIBs and unsatisfied demands of Mutual Funds

    were allotted the remaining available shares (10,91,25,939) on proportionate basis. Total

    number of Equity Shares allotted in this category is 114869410 Equity Shares to 202

    allottees i.e. 100% of valid applicants.

    Category FIs/Banks MFs FIIs VCs Insurance Companies Total

    No.of Shares 4576704 6391817 100943548 9918 2947423 114869410

    No.of Shares

    87%

    6%4%0%3%

    Fls/Banks

    MFs

    Flls

    Insurance Cos

    VCs

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    2. Housing Development and Infrastructure Limited (HDIL)

    Public issue of 29,700,000 Equity shares of Rs. 10 each of Housing Development and

    Infrastructure Limited ("HDIL" or the "COMPANY" or the "ISSUER") for cash at a

    price of Rs. 500 per equity share (including a share premium of Rs. 490 per equity share)

    aggregating to Rs. 14,850 million (THE "ISSUE"). The issue comprises a reservation of

    up to 600,000 equity shares for subscription by eligible employees (The "Employee

    Reservation Portion") and an issue an issue to the public of 29,100,000 equity shares

    ("The Net Issue"). The face value per equity share is Rs. 10/-. The issue price per equity

    share is Rs. 500/- and it is 50 times of the face value.

    The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange

    Limited ("BSE") on 16th July, 2007. The Committee of Directors of the company at its

    meeting held at Hyderabad on 17th July, 2007 has approved the basis of allocation of

    shares and has allotted the shares to various successful applicants.

    The Issue received 1,48,844 applications for 19,06,23,174 equity shares resulting in 5.58

    times subscription. The details of the applications received in the Issue from Qualified

    Institutional Buyers', Non-Institutional, Retail Individual Investor and Employee

    categories are as under:

    Category No. of Applications No. of Shares Subscription

    Qualified Institutional Buyers 98 172448136 8.565

    Non Institutional Investors 606 4921078 1.466Retail Individual Investors 148003 13224084 1.313

    Employees 137 29876 0.049

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    Subscription

    75.18%

    12.87%

    11.52%0.43%

    Qualified Institutional Buyers Non Institutional Investors

    Retail Individual Investors Employees

    Analysis of the chart:

    A. Allocation to Employees

    The Basis of Allocation to the Employees, who have bid at cut-off or at and above the

    Issue Price of Rs.500 per Equity Share, was finalized in consultation with BSE. The

    category was subscribed to the extent of 0.049 times. Hence FULL and FIRM allotments

    have been made against all valid applications. The total number of shares allotted in this

    category is 29,568 Equity Shares to 136 successful applicants. The unsubscribed portion

    of 5,70,432 equity shares has been added to Retail and Non-Institutional categories in the

    ratio of 50:50.

    B. Allocation to Retail Individual Investors

    The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off or at

    and above the Issue Price of Rs.500 per Equity Share, was finalized in consultation with

    BSE. The category was subscribed to the extent of 1.244 times. The total number of

    shares allotted In this category is 1,03,51,716 Equity Shares (including 285,216 equity

    shares spilled over from employees category) to 1,37,687 successful applicants.

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    C. Allocation to Non Institutional Investors

    The Basis of Allocation to the Non-Institutional Investors, who have bid at cut-off or at

    and above the Issue Price of Rs.500 per Equity Share, was finalized in consultation with

    BSE. The category was subscribed to the extent of 1.33 times. The total number of shares

    allotted in this-category is 36,40,716 Equity Shares (including 2,85,216 equity shares

    spilled over from employee category) to 495 successful applicants.

    D. Allocation to QIBs

    Allocation to QIBs has been done on a proportionate basis in consultation with BSE. As

    per the SEBI guidelines, Mutual Funds were initially allotted 5% of the quantum of

    shares available (10,06,650) and other QIBs and unsatisfied demands of Mutual Funds

    were allotted the remaining available shares (1,91,26,350) on proportionate basis.

    Category Fls/Banks MFs Flls ICs Total

    No.of Shares 1191330 1737175 14091079 3113416 20133000

    No.of Shares

    6%9%

    70%

    15%

    Fls/Banks

    MFs

    Flls

    Insurance Cos

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    3. OMAXE Limited

    Public issue of up to 17,796,520 Equity shares of Rs. 10 each for cash at a price of Rs.

    310 per equity share aggregating Rs. 5,51652 million by OMAXE Limited ("OMAXE",

    "THE COMPANY" or "THE ISSUER"). The face value of equity share is Rs. 10/- each.

    The issue price of Rs 310/- each is 31 times of the face value.

    the Equity Shares of the Company are proposed to be listed on The Bombay Stock

    Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE")

    and trading is expected to start on or around August 10,2007.

    The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange

    ("BSE") on August 1, 2007. The IPO Committee of Directors of the Company at its

    meeting held on August 2, 2007 approved the Basis of Allocation of Equity Shares in the

    Issue and has allotted equity Shares to various successful applicants. The listing will be

    filed with the BSE and NSE on August 3, 2007.

    The issue received 4,58,544 applications for 1,21,18,96,980 Equity Shares resulting in 62

    times subscription. The details of the applications received in the Issue from QIBs, Non

    Institutional Bidders, Retail Individual Bidders and Eligible Employees are as under:

    Category No. of applications No. of sharesSubscription

    (No. of times)

    Retail Individual Bidders 456086 71586860 12.3960

    Non Institutional Bidders 1642 138656620 72.0294

    QIBs 287 1001317120 86.6941

    Eligible Employees 529 336380 1.1344

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    Subscription

    50.33%41.82%

    7.20%0.66%

    QIBs Non Institutional Bidders

    Retail Individual Bidders Eligible Employees

    Analysis of the chart

    A) Allocation to Non Institutional Bidders:

    This category was over subscribed 71.6437 times. The total number of shares allotted in

    this category is 1924992 Equity Shares.

    B) Allocation to Retail Individual Bidders:

    This category was over subscribed 12.144457 times. The total number of shares allotted

    in this category is 5775008 Equity Shares.

    C) Allocation to Eligible Employees

    This category was over subscribed 1.109133 times. The total number of shares allotted in

    this category is 296520 Equity Shares.

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    D) Allocation to Qualified Institutional Buyers

    CategoryFinancial

    Institutional/BanksMutual

    Funds

    Foreign

    Institutional

    Investors

    Insurance

    CompaniesVCs

    No.ofEquity.Shares

    1087933 2335151 7389428 681587 55901

    No.of Shares

    9%

    20%

    65%

    6%

    0%

    FIs/Banks

    MFs

    FIIs

    Insurance Cos

    VCs

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    C] STOCK PERFORMANCE

    1. DLF Limited

    The DLF Limited was listed on stock exchange on 5th July 2007 and the issue price was

    Rs 525. It opened at Rs. 526.6 and the days high was Rs.583.95 and finally it closed at

    Rs. 569.80. The total quantity traded on the 1st day was 78025942 shares. The stock

    performed well. On 23rd July 2007 its price was rising and reached to Rs. 672.4 the

    volume traded was 5850767 shares. On 23rd Aug 2007 the price fell down to Rs.555.2 the

    lowest till the date. Again it starting rising and on 24th Sept 2007 it reached the highest

    Rs.781.4 the volume traded was 7961666 shares. So the overall performance of DLF

    Limited was good.

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    2. Housing Development & Infrastructure Limited

    Housing Development & Infrastructure Limited was listed on 24th July 2007 and the issue

    price was Rs. 500. It closed at Rs. 559.35 and the volume traded was 28590806 shares on

    the 1st day itself. On 26th July 2007 the price reached to Rs. 621.40 and the volume

    traded was 9125757 shares. Then it had many fluctuations and reached to Rs.487.25 on

    23rd Aug 2007 and the traded quantity was 1566565 shares. Then the market price

    reached to Rs. 647.65 on 20th Sept. 2007, it was at its highest. The total quantity traded

    on this day was 1831686 shares. Thus HDIL went through many fluctuations during the

    period.

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    3. Omaxe Limited

    Omaxe Limited was listed on 9th August 2007 on the stock exchange. It was issued at Rs.

    310. Omaxe opened at Rs. 410 and closed at Rs. 349.35. The days high was Rs. 448 and

    low was Rs. 341.40. The total volume traded was 29443704 shares. Then the market

    price fell down to Rs. 274.30 on 22nd Aug 2007 and total traded quantity was 1650308

    shares. On 19th Sept 2007 it reached the highest at Rs. 361.10. Thus Omaxe Limited

    stock reached at very low price and also at a high price though the volume of shares

    traded was low throughout the period.

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    Chapter- IX: Observations & Conclusions

    The Outlook for Infrastructure development remains stronger in the current and

    coming future. Infrastructure Realty projects are on the rise with Construction companies

    opting to go on for rental of equipments as not to block their funds required for

    equipments as they can be utilized only at one site-if purchased outright. Looking into

    this factor the Companies have huge growth prospects in respect of hiring of equipments.

    DLF Limited came up first with the IPO in this study and it had largest number of

    shares i.e. the size of issue was largest amongst the three companies. This gave an

    advantage to the company. Its price band was also high. The price band of Omaxe

    Limited was low as compared to others. The Qualified Institutional Buyers were allotted

    highest number of shares in all the companies as their subscription was high. In DLF

    Limited the Non Institutional buyers and Retailers were allotted an equal number of

    shares. It was same for HDIL also. But Omaxe Limited Non institutional buyers were

    allotted much more than retailers. The employees were allotted very small amount as

    there was a low subscription from them in all the three companies.

    It was found that all the three companies DLF Limited, Housing Development &

    Infrastructure Limited and Omaxe Limited went through many fluctuations in the stock

    market, their prices were very high and also very low. In DLF Limited and Housing

    Development & Infrastructure Limited the volume traded was very high on the first day

    later on it reduced. But in case of Omaxe Limited the highest traded quantity was not on

    the first day.

    Thus all the three companies can perform well in the future and have a lot of

    scope as the infrastructure sector is booming.

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    Chapter- X: Bibliography

    The secondary data is obtained from the following websites:

    www.indiaipo.com

    www.dlf.com

    www.hdil.com

    www.omaxe.com

    www.economictimes.com

    www.bseindia.com

    www.nseindia.com

    www.google.com

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