initial public offer compatible

8/4/2019 Initial Public Offer Compatible

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WHAT & WHY???

An Initial Public Offer (IPO) is the first public offer ofsecurities 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.


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Facilitates Future funding. Enables Valuation.

Provides Liquidity.

Increases visibility &

reputation.

Commands better pricing.

As purchase considerationor as an exchange.

Dilution of ownershipstake.

Involves hugeexpenses.

Disclosures. Increased Regulatory

Monitoring.

Listing Fees

Documentation.Management Time &Efforts

ADVANTAGES DISADVANTAGES


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MANAGEMENT OF IPO

KEY TERMS USED :

BOOK BUILDING

ALLOTMENT

DRAFT OFFER DOCUMENT

RED HERRING PROSPECTUS

UNDERWRITERS

LEAD MANAGERS


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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 yearshould be from the new activity.

Issue size doesnt exceed 5 times the pre-issue net worth.

ALTERNATE ROUTE 1 Book building process and 50% of the offer to QIBs.

Minimum post issue face capital of Rs.10 Crores & Market making for 2years.

ALTERNATIVE ROUTE 2

15% participation in project by F/Is or Schedule, 10% of the Project cost fromappraiser; 10% of the Issue to QIBs.

Minimum post issue face capital of Rs.10 Crores


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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 Advisorc. Bankers to Issued. Underwriters


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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


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IPO PROCESS

1. Appointment of Underwriter

2. Appointment of Registrars

3. Appointment of the brokers to the issue

4. Appointment of Lawyers

5. Draft Prospectus

6. Filing of prospectus with the Registrar of Companies

7. Printing and dispatch of Application forms8. Filing of the initial listing application

9. Statutory announcement

10. Processing of applications

11. Establishing the liability of the underwriter

12. Allotment of Shares

13. Listing of the Issue

14. Escrow Account


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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: 3 rd day from the date of listing or 78 days from the date of closure ofissue, whichever is earlier.

- Due diligence certificate with final report

Redressal of Investor Grievancerelated 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 daysfrom the date of


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initial public offer compatible

Documents