Canara College,

Mangalore

September 22, 2014

Book-Building

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.

-SEBI (Disclosure & Investor Protection) Guidelines 2000

Features of Book-BuildingQuantity Assessment

Price Discovery

A 20% Price Band to Bid

QIB Portion (50%) and Public Issue Portion (35%)

Only Demat Account-Holders

10% Application Money by QIBs

100% by Others

Rationale for Book-Building

Institutional Investors

Legal Compulsion : Issue Exceeding 5 times the pre-issue networth

Bidding Choice for the Applicants

Shorter Process of Issue

Financial Intermediarie

sMerchant Banker as

Lead Book-Running Manager

Co-Book Runners

Syndicate Members

Registrar to the Issue

Bankers to the Issue

Merchant Banker As Book Runner

Facilitating Appointment of Other Book Runners

Facilitating Appointment of Syndicate Members

Circulation of Information Memorandum

Gathering the Input through IM

Filing Red Herring Prospectus with SEBI along with IM

Facilitating Appointment of other FIs

Filing Due Diligence Certificate with SEBI

Determination of Price Band

Opening & Closure of Subscription List

Allotment of Shares

Getting the Shares Listed

Filing Final Prospectus

Functions of Syndicate Members

Facilitating Quantity Assessment

Underwriting

Collection of Bid-cum-Application Forms

Functions of Registrar to the Issue

Appointment of Bankers

Printing & Supply of Forms

Allotment

Other Procedure

Issue Procedure

A. Quantity Assessment Stage

B. Pre-Issue Stage

C. Actual Issue Stage

D. Allotment Stage

Quantity Assessment Stage

Appointment of Financial Intermediaries

Preparation of Information Memorandum

Sending Information Memorandum

Determination of Quantity & Price-Band

Underwriting

Pre-Issue StageAppointment of Other Financial Intermediaries

Application to Stock Exchange

Preparation of Draft Red Herring Prospectus

Filing Documents with SEBI

Informing the Registrar of Companies

Agreement with Depositories

Appointment of an Ad Agency

Filing Final Red-Herring Prospectus

Despatch of Application Forms

Opening Escrow Accounts

1407987687538.pdf

Actual Issue Stage

Opening the Subscription List

Receipt of Application cum Bid Forms

Uploading the Information

Closure of Subscription List

Allotment by BRLM & R&T Agents

Allotment StageDetermining the Cut-

Off Price

Actual Allotment

Crediting Demat Accounts

Listing the Shares

Filing Final Prospectus

A Recent Instance of Book-Building-Snowman Logistics Limited Objects of the Issue: 1. Capital expenditure for setting up new temperature controlled

and ambient warehouses;2. Long term working capital; and3. General corporate purposes.

Issue Detail:   »»  Issue Open: Aug 26, 2014 - Aug 28, 2014 

  »»  Issue Type: 100% Book Built Issue IPO   »»  Issue Size: 42,000,000 Equity Shares of Rs. 10   »»  Issue Size: Rs. 197.40 Crore   »»  Face Value: Rs. 10 Per Equity Share   »»  Issue Price: Rs. 44 - Rs. 47 Per Equity Share   »»  Market Lot: 300 Shares   »»  Minimum Order Quantity: 300 Shares   »»  Listing At: BSE, NSE

Snowman Logistics IPO Grading: CRISIL Research has assigned a CRISIL IPO grade of '4/5‘ to the

proposed IPO of Snowman Logistics Ltd (Snowman).

Merits of Book-Building

Realisation of a High Price

Quick Issue Process

Fast Availability of Funds

Lesser Issue Expenses

Quick Update

Lack of Uncertainty

Quick Allotment

Opportunity for Revision

Quick Listing of Shares

Less Administrative Cost

Preference by Institutional Investors

Up-to-date Information

Demerits of Book-BuildingSuitable for Mega Issues

Compulsory Demat A/c

Networking of Stock Exchange with Subscription Terminals

Less Time for Subscription

Manipulation of Price

Less Access to Investors & Differential Application Money

Retail Investors Shy Away

Lesser Reservation to Retail Investors

Concentrated Holding

THANK YOU