2 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Outline
• SME Listing - Background
• SME Listing - An Overview of Key Requirements & Eligibility Norms
• Core advantages of SME Listing
• SME Listing – Shaping up in a BIG way
• Pantomath – Companion in Process
• About Pantomath and Key Initiatives for Capital Markets
• Our Select Clientele – Wide Array of Services
• Annexures
3 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing – Background
4 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SMEs – The backbone of Indian economy
Contribution to GDP
17 %
Share of Industrial output
45 %
Share of Exports 40 %
Total Employment
69 million
Job creation every year
1.3 million
Source : Ministry of Micro, Small and Medium Enterprises, GOI
Nation’s 1.3 million SMEs account for 40% of India's total exports
At 48 million, India is second to China in number of SMEs
SMEs employ close to 40% of India's workforce & contributes 45% to India's manufacturing output
SMEs are expected to drive the next-level growth of Indian economy provided they have enabling platform and avenues
SMEs face major problem of capital inadequacy
This problem can be tackled through Capital Market
5 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Valley of Death
Pre seed Expansion Early growth Seed/Start up
Very risky
Less risky
Angel Investors
Govt. Grants
Bank Credits
Personal Finances
Angel Investors
Govt. Grants
Bank Credits
Venture Cap
Venture Cap
PE
IPO
IPO
Debt
PE
Partnership
Funding Options
Lifecycle of SME
6 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing Background…
BSE and NSE launched
their respective
platform for SMEs
The move aims at
providing an opportunity
to SME entrepreneu
rs to raise growth
capital and reap
benefits of listed space
Both BSE & NSE
leverage their
existing ‘equity
platform’ for SME
exchange platform
As per estimate of
SME Chamber of India, over 5000 SMEs
have the potential for listing
A facilitative framework
for SME listing
7 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing – Evolution…
SEBI lays down broad framework
for SME listing
platform
5-Nov-08
PM Task Force
recomm-ends SME
listing exchange
Jan-10
SEBI circular on
Guidelines for market
making
26-Apr-10
SEBI Circular rolling out
model listing
agreement for SMEs
17-May-10
Amend-ments in
SEBI Regulations
(ICDR, Merchant
Bankers etc.
18-May-10
SEBI Master Circular on
SME exchange &
Market Making
31-Dec-10
BSE
Eligibility Norms for SME listing
19-Apr-12
BSE SME Exchange
launch
13-Mar-12
SEBI circular standardizing lot size for
SME exchange
21-Feb-12
SEBI
approval to NSE SME Exchange
14-Oct-11
SEBI approval to
BSE SME Exchange
27-Sep-11
BSE
Eligibility Norms for SME listing REVAMPED
05-Feb-15
8 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing - An Overview of Key Requirements & Eligibility Norms
9 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing - Key Requirements & Eligibility Norms
Capital threshold for Listing
SEBI
BSE
NSE SME Exchange
SME/Main Board
Main board
10 Crores
25 Crores
Po
st I
ssu
e F
ace
Val
ue
Cap
ital
Particulars Requirement
Minimum application amount / trading lot
INR 1 Lac
Underwriting 100% Mandatory (of which 15% to be done by MB in his own account)
Market making (to be undertaken by MB)
Through Exchange-registered market makers for min 3 years
Public Shareholding Min. 25% Min. 50 investors No post-listing continuous requirement
Provisions for migration to / from Main Board from / to SME Exchange
Offer doc not subject to SEBI
vetting
Refer Annexure
for key norms of
SEBI ICDR
10 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
• Mandatory facilitation of trading in Demat securities
• Certificate that no winding petition or reference to BIFR
• Mandatory corporate website • Promoters to attend to interview with
Listing Advisory Committee • No change in promoter in preceding 1 year
• Net Tangible Assets : INR 3 crore (as per latest audited results)*
• Net Worth (excl. Rev. Reserve) : INR 3 crore as per latest audited financial results
• Track record of distributable profits for at least 2 years out of preceding 3 completed Fys or NetWorth shall be at least Rs 5 crore
Max : INR 25 crore Min : INR 3 crore
Post Issue Capital (FV)
Other Requirement
Track Record
SME Listing - Key Requirements & Eligibility Norms
SEBI
BSE
NSE
Refer Annexure
for key norms of
LA
11 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
• Same as BSE plus additional certification / disclosures on litigation etc.
• Track record of at least 3 years • Positive cash accruals (EBDT) from
operations and positive net worth for at least 2 FYs preceding the application
• In case the above conditions are not fulfilled, Exchange Authority to decide
Max : INR 25 Cr Post Issue Capital (FV)
Other Requirement
Track Record
SME Listing - Key Requirements & Eligibility Norms
SEBI
BSE
NSE
12 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
BSE SME vs. Main Board
Parameters Main Board SME Exchange
Post – issue paid up capital
Min INR 10 crore Min INR 3 crore on BSE SME; Max INR 25 crore
Minimum Allotees in IPO 1000 50
IPO underwriting Non Mandatory (Under 50% compulsory subscription to QIB’s)
Mandatory (100% underwritten with MB underwriting 15%)
Track record Stringent track record norms like Operating Profit of 15 Cr
Relaxed track record norms
Offer Document vetting By SEBI By Exchange
IPO Application Size INR 10000 – INR 15000 Min. INR 1 lac
IPO Time frame 6 months – 1 year 2 – 3 Months
Reporting Requirements Quarterly Half yearly
Reporting Requirements Quarterly Half yearly
“SME Exchange
has a winning
edge over Main
Board”
13 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Core Advantages of SME Listing
14 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Core Advantages of SME Listing (1 of 7)
Implications of Listing Resulting Benefits
Collateral Value Listed securities can serve as collateral for raising additional loans
Improved Credit Rating
Cost of finance (Rate of Interest) likely to come down
Increased Visibility • Brand building • Stock Exchange quotations • Analyst coverage
Lender’s / Supplier’s increased comfort
• Increased acceptability and prestige among suppliers
• Lesser negative covenants
Transferability of shares at market price
• ESOPs – Higher compensation for senior executives without cash outgo
• Overseas listing possible
Governance
Operational Wealth
Creation
Tax
15 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Operational Benefits of listing – Illustrative Case Study
Particulars Unlisted Listed Remarks
Sales 4000 4400 Branding & visibility will likely to result in increased sales / orders
Total Expenses
3000 3100
Expenses increase in a lower proportion due to economies of scale such as higher bargaining power, bulk discounts etc.
EBITDA 1000 1300 Increase in sales at reduced expenses results in increased EBIDTA & EBIDTA Margin
EBITDA % 25 29.55
Interest 84 66
Listing likely to result in cheaper cost of funding (assumed debt of INR 600 lakhs @ int rate of 14% pre-listing and 11% post-listing)
Dep. 10 10
PBT 906 1224
PAT 634 857 Increase in PAT and PAT margins due to increased EBITDA and reduced borrowing cost
PAT % 15.85 19.47
Amounts in INR Lakhs.
Governance
Operational Wealth
Creation
Tax
Core Advantages of SME Listing (2 of 7)
16 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Unlisted companies subject to 20% tax on buy back of shares
Tax on Buy Back of Shares
Unlisted Companies subject to 30% tax on issue of new shares at a premium exceeding fair value
Tax on Infusion
LTCG @20%
Capital Gains tax on transfer of shares
Purchase of distressed asset below NAV is subject to tax @ MMR
Purchase of Distressed Asset
Governance
Operational Wealth
Creation
Tax No Tax on
Entry and exit (through buy
back, transfer, fund infusion)
No Tax on
Purchase of distressed
assets
Lower Tax on
Share transfers (eg. Family Succession, Intra-Group
Transfers, Third-party Transfers
etc.)
Core Advantages of SME Listing (3 of 7)
17 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
In Transfer: Shares are purchased for INR 400 Cr and sold at INR 1000 Cr and assumed shares are purchased in 2008-09 and sold in 2012-13. In Infusion: Fair Value of Shares is assumed at INR 600 Cr.
Tax Benefits of listing – Illustrative Case Study
Particulars Transfer Buyback + Infusion
SME Listing
Initial Investment 400.00 400.00 400.00
Sale Consideration 1,000.00 1,000.00 1,000.00
Indexed Cost of acquisition
585.56 NA NA
Tax on Sale/Buyback/Infusion (CG/STT)
82.89 240.00 2.00
Net Proceeds 917.11 760.00 998
ROI (Before Taxes) 250% 250% 250%
ROI (After Taxes) 222% 190% 249.50%
Governance
Operational Wealth
Creation
Tax INR Crore
Core Advantages of SME Listing (4 of 7)
18 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Valuation benchmarking
Wealth creation through
market cap of shares upon listing (Refer Next
Slide)
Promoter Profile Building
Adds to social
reputation and status
Listed shares as currency
Use of shares for takeovers / M&A
transactions, leading to inorganic growth
Governance
Operational Wealth
Creation
Tax
Core Advantages of SME Listing (5of 7)
19 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Governance
Operational Wealth
Creation
Tax
Core Advantages of SME Listing (6 of 7)
Wealth Creation – Select Examples
Si. Vi. Shipping
AIFL Ultracab Momai
Apparels
A. Market Cap INR Crores
Pre Issue Net Worth
3.10 10.98 6.25 17.12
Issue Size 6.86 21.00 7.97 43.33
Market Capitalization*
14.38 310.31 39.47 121.93
B. Price Pattern INR Per Share
Issue Price 25.00 40.00 36.00 78.00
CMP (Face Value INR 10)*
25.00 159.40 49.25 84.50
* Closing Price as on March 31, 2015
20 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Improved Systems
Better Information
Flow
Data manageme
nt
Internal Controls
Good corporate governance helps companies immensely and
also increases the confidence among its stakeholders
Governance
Operational Wealth
Creation
Tax
Core Advantages of SME Listing (7 of 7)
21 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing – Shaping up in a BIG way…
22 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
* Closing Price as on March 31, 2015
So far, 89 Companies have been listed on BSE SME Exchange (of which 3 have migrated to main board) and 6 on NSE Emerge Exchange
AIFL Ultra Cab Si. Vi. Momai
Apparels Women’s Next
A. Market Cap INR Crores
Pre Issue Net Worth 10.98 6.25 3.10 17.12 2.02
Issue Size 21.00 7.97 6.86 43.33 6.50
Market Capitalization* 310.31 39.47 14.38 121.93 14.98
B. Price Pattern INR Per Share
Issue Price 40.00 36.00 25.00 78.00 65.00
CMP (Face Value INR 10)* 159.40 49.25
25.00
84.50 59.90
BSE SME Index
SME LISTING – Shaping up in a BIG Way…
23 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Pantomath – Companion in Process
End-to-end assistance
and hand-holding
by expert &
dedicated Team – TEAM
PANTOMATH 1.
2.
3.
4.
24 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Appointment of Merchant Banker
Due Diligence & Pre-IPO preparation
Valuation and Preparation of Offer Document
Marketing Strategy
Appointment of other intermediaries
Filing of Offer Document with BSE & Others
Issue Management & Share Allocation
Listing & Market Making
1
3
5
7
9 8
6
4
Restructuring of capital 2
SME Listing – Way Forward…
25 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
About Pantomath and Key Initiatives for Capital Markets
26 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
About Pantomath Group
Pantomath Advisory Services Group
• Consists of a team of professionals led by the Group Founder, Mr. Mahavir Lunawat, who is a CFA, FCS, PGDSL and LL.B. and who has had stints with top notch corporates viz. ITC Ltd., RIL, and PwC
• Corporate finance vertical is led by Mr. B. Chandrasekaran, a veteran in finance, who is ex-head of Treasury, RIL
• Merchant banking team is anchored by CA Madhu Lunawat who has also had stints with leading organisations, viz., Infosys, ASREC and Edelweiss. Ms Madhu served as CFO of Edelweiss ARC immediately before joining the Board of Pantomath Capital
• Diversified team comprises professionals being MBA, CFA, CA, CS, Lawyer and others
• Activities include – merchant banking, debt syndication, angel funding, M&A and corporate advisory
• Progress with values, Group’s tag-line, signifies its progressive approach driven by essential values any eco-system thrives on.
Key credentials of Pantomath Group
TM
27 Pantomath Advisory Services Group.
TM
Pantomath SMEX - 30
Multifarious Initiatives in
Capital Markets space
Angel Funding Network
Corporate film on Listing
Online SME Market Watch
Wide-spread
awareness on Listing
Capital Market Surveys
Active engagement
with regulators
Website on IPOs
Pantomath’s Initiatives for Capital Markets
Doing business in
India website
Business Seminars & Workshops
Media Coverage
Companies Act
Convergence Program
Re-CAP: A weekly mailer encapsulating capital market
news
28 Pantomath Advisory Services Group.
TM
Pantomath SMEX-30
• Pantomath SMEX–30 was launched on March 6, 2014
• First of its kind of index launched in India measuring day to day price movement in SME scrips on NSE Emerge and BSE SME Exchange
• Stringent qualitative index methodologies used where companies with 3 years of existence, positive operating profits / EBIDTA levels have been considered
Base Date December 13, 2013
Base Value 100
Date of Launch March 6, 2014
Method of calculation Free Float Market
Capitalisation
Number of Scrips 30
Calculation Frequency VWAP at the end of the day
Rebalancing Interval 6 Months (March and
September)
Pantomath SMEX-30 Specification
174%
SMEX-30
29 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Online Initiatives
Launch in the hands of Shri Rajeev Kumar Agarwal, Whole Time Member, SEBI on the occasion of listing of 50th Company on BSE SME Exchange, in presence
of Shri S. V. Murali Dhar Rao, ED, SEBI and Shri Ashish Chauhan, MD & CEO, BSE Ltd
Salient features • Capsuled executive brief on critical areas
concerning FDI into India • Simple and easy navigation in a user friendly
manner • Current news on real time basis • Our thought leadership through researched
publications and presentations
www.dobusinessinindia.in www.smeipo.net
30 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Corporate Film on SME Listing jointly with BSE*
https://www.youtube.com/watch?v=UakpG3LgNLM
Mr. Ashish Chauhan, MD
& CEO, BSE
Sunderlal Bothra, MD & CEO Bothra Metals and
Alloys Ltd
Ajay Thakur, Head, BSE - SME
“SMEs are growth engines and would aid to job creation in India,
one of the topmost economic priority of us as a nation….. SME listing aids to value creation not
only for SMEs but also to our economy and society as a whole”
“SME Listing is a Wealth Creation Model and not
Taxation Model”
“Compliance rather helps companies and management;
makes employees more responsible. SME Listing also
helps to improve credit rating”
*Also available on BSE SME website www.bsesme.com
31 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing Experience
32 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Business Seminars & Workshops
Group photo of Participants along with Mr. Chauhan and other dignitaries at BSE
Speaking at a seminar organised by ICSI Vadodara
Speaking at a seminar organised by ICAI & ICSI Nagpur From L-R : Mr. Lunawat, Pantomath Group MD, Mr. Ashish Chauhan, BSE MD & CEO, Mr. Ajay Thakur, BSE SME Head
33 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Active Engagement With Regulators
• Participation in ADB Study on – Potency of Capital markets for SMEs in India.
• Member of BSE Working Committee for Development of SMEs
• Member of Association of Investment Bankers of India (AIBI)
• Representation to NSE for Dual Listing on SME Platform
• Representation to AIBI on Impact of reduced frequency of clearing of Non CTS Cheque on IPO timelines
• Presentation to SEBI on impact of New Companies Act on SEBI regulations
34 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Select Media Coverage (1 of 2)
35 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Select Media Coverage (2 of 2)
36 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Awards and Achievements
37 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Our Select Clientele – Wide Array of Services
38 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME IPO on BSE SME Exchange
Largest SME IPO of INR 43 Crores on NSE Emerge
Our Select Clientele
SME IPOs
SME IPO BSE SME Exchange
SI. VI. Shipping Corp Ltd
Women’s Next Loungeries Ltd Momai Apparels Ltd
SME IPO BSE SME Exchange
Majestic Research Services and Solution Limited
Ultracab (India) Limited
SME IPO on BSE SME Exchange
Jet Infraventure Ltd
SME IPO
BSE SME Exchange
SME IPOs
SME IPOs
39 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Our Select Clientele
Delisting through reverse book building
(WIP)
Takeover under SEBI Regulations (WIP)
Listed Co (Mumbai) Stovec Industries Ltd
Takeover Advisory Delisting
{
NCD issue of INR 200 Crores
Hinduja Finance Limited
NDC Issue
SME IPO on BSE SME Exchange
Biggest Manufacturing Company on SME
exchange IPO on NSE Emerge
Jiya Eco Products Ltd Supreme (India) Impex Ltd
Filtra Consultants and Engineers Limited
SME IPO on BSE SME Exchange
SME IPOs
40 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
{
Valuation for Private Equity Investment
Tag Offshore Limited
{
Valuation of overseas target company under
ODI Regulations
PwC India Pvt Ltd
Valuation
Our Select Clientele
Buy-side advisor for acquiring Pharma Co
Internal group restructuring
Internal group restructuring
Mergers & Acquisitions
Soham Organics (P) Ltd Garware Wall Ropes Ltd Crompton Greaves Ltd
{
Listing without IPO on ITP Platform of BSE
3rd Rock Multimedia Ltd.
ITP Listing
41 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Our Select Clientele
{
Convergence with Companies Act, 2013
Motilal Oswal Fin Ser Ltd {
Internal Restructuring
Forever Living Imports Pvt. Ltd {
Concurrent Audit of R&T Operations
Hindustan Unilever Ltd
Corporate Advisory
{
Convergence with Companies Act, 2013
Elegant Marbles & Granite Ltd
SBI General Insurance Co Ltd
Convergence with Companies Act, 2013
{
JMC Projects (INDIA) Ltd
Convergence with Companies Act, 2013
Corporate Advisory
Let’s Take It Forward….
Capital Advisors (P) Ltd Progress with Values
Disclaimer All data and information is provided for informational purposes only and is not intended for any factual use. It should not be considered as binding / statutory provisions. Neither Pantomath Capital Advisors nor any of its group company, directors, or employs shall be liable for any of the data or content provided for any actions taken in reliance thereon.
Corporate Office Mumbai 108, Madhava Premises, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 Landline: (022) 2659 8687/91, Fax: (022) 2659 8690 Website: www.pantomathgroup.com E-mail : [email protected]
Associate Offices at Bhopal - Madhya Pradesh Borivali - Mumbai Kolkata - West Bengal Pune - Maharashtra Rajkot - Gujarat Surat - Gujarat Vapi - Gujarat
TM
Branch Office Gandhinagar- Gujarat 312, Pratik Mall Near City Plus Cinema, Kudasan Gandhinagar-382421 Email: [email protected] [email protected]
Online Initiatives : www.smeipo.net | www.dobusinessinindia.in | www.pantomathangels.com
43 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Annexures Pantomath’s End-to-end Services
44 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Phase- I: Pre-IPO Capital Restructuring & Preparation
Under the phase, we shall assist you in preparing for IPO and listing on SME Exchange. The services under this phase shall include the following :
Assistance in devising appropriate capital restructuring plan;
Assistance in statutory compliance management and setting up minimum corporate governance practices expected by a listed company from the perspective of the following rules / regulations :
Companies Act, 2013
Listing Agreement applicable for SMEs
BSE listing norms
SEBI ICDR Regulations;
Assistance in appointment of market intermediaries and other parties including the following;
Underwriters
Market Makers
Registrars to Issue
Bankers to Issue
PR Agency, Printer etc.;
Assistance in devising a complete IPO plan and strategy including the likely post-issue shareholding
distribution pattern.
45 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Phase- II: Documentation Preparation
We shall assist you in drafting of IPO Offer Document and other important agreements, documents and resolutions necessary for an SME IPO process. An indicative list of important documents is as under for easy understanding :
IPO Offer Document,
Tripartite Agreement with NSDL, CDSL and Registrar to Issue,
Underwriting Agreement,
Market Making Agreement,
Agreement with Bankers to Issue,
Agreement with Registrar to Issue,
Board / Shareholders’ Resolutions,
Certificates, Letters of Representations etc,
Draft of public advertisements, notices etc,
Forms / Applications to be filed with BSE, ROC and other regulatory office.
46 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Phase- III: Offer Management
Once all pre-IPO preparations would be over including meeting the eligibility criteria, appointment of other market intermediaries, and drafting of offer document, we shall initiate the actual process of IPO. Our services under the phase shall include end-to-end IPO activities :
Filing of IPO Offer Document with BSE and other regulatory offices like SEBI and ROC;
Follow-up with BSE and ROC for their approvals;
Coordinating and assistance in interview with SE Listing Advisory Committee,
Assistance in execution of agreements with other market intermediaries;
Assistance in launch of IPO and coordinate with other parties including PR Agency, Printers for adequate public advertisement, distribution of application forms as required statutorily;
Monitoring the flow of applications and keeping a real-time discussion with the management of the Company;
Coordinating with bankers and registrars for deposit of application moneys and finalization of allotment list in consultation with the stock exchange .
47 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Phase- IV: Listing Assistance
Finally, post IPO closure and finalization of allotment, we shall initiate the activities for listing of equity shares of the Company on SME Exchange. Our scope of services under this phase shall include the following:
Assistance in completing allotment of shares to the successful allotees,
Preparing listing application ,
Filing of listing application with Stock Exchange(SE),
Follow-up with SE and obtain listing approval,
Assist in trading formalities and obtain SE’s trading approval,
Assist in making required public disclosures as required statutorily,
Coordinating for continuous market making for 3 years.
48 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
Annexures Some Key Norms of Listing Agreement & SEBI ICDR
49 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SEBI ICDR As Applicable to SMEs
SEBI ICDR applies to SME listing with specific relaxations
Offer document requirements and eligibility norms relaxed
Appointment of Merchant Banker, and other intermediaries required
Lead Merchant Banker to the issue,
Rights , obligations and responsibilities relating to disclosures, allotment, refund, and underwriting obligations
Book building or fixed priced issue permitted
Lock-in conditions apply
20% of post-issue capital to be locked in for 3 years; balance promoter shareholding to be locked in for 1 year
Non-promoter pre-IPO shareholding to be locked in for 1 year with exception to ESOP shares and shares held by VCF or FVCIs for more than 1 year pre IPO
Locked-in shares permitted to be transferred inter se promoters incl. new promoter(s)
50 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity
SME Listing Agreement
All SMEs getting listed need to enter into Listing Agreement (LA) with the relevant stock exchange.
BSE and NSE has adopted model LA released by SEBI.
Key Requirements include the following :
Half-yearly results (Audit / limited review)
Half-yearly shareholding pattern
Advance notice of Board meetings with specified agenda (e.g. dividend, bonus, buy back etc.)
In-principle approval for any further issuance of shares
Disclosure of price sensitive information
Annual report containing inter alia full financials, consolidated financials, related party disclosures etc. to be uploaded on corporate website
Full annual report to be emailed; Abridged annual report to shareholders not on email ids
Compulsory migration to main board after the cut- off ceiling