INITIAL PUBLIC OFFER MUTHOOT FINANCE LTD

INITIAL PUBLIC OFFER MUTHOOT FINANCE LTD

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Managed by:

Team IPO Muthoot Securities Limited 1st Floor, Alpha plaza, K.P.Vallon road, Kadavanthara, Pin: 682020 Ph: 0484 - 3937575 / 86 / 18 / 82

Email: ipo@muthootsecurities.com ipo@muthnet.com

What is IPO…?What is IPO…?

IPO or Initial Public Offer Initial Public Offer is a way

for a company to raise money from investors for its future projects and get listed to Stock Exchange

Types of MarketTypes of MarketPrimary marketPrimary market

Primary market is the market where shares are Primary market is the market where shares are offered to investors by the issuer company to offered to investors by the issuer company to raise their capital.raise their capital.

Secondary marketSecondary market

Secondary market is the market where stocks are Secondary market is the market where stocks are traded after they are initially offered to the traded after they are initially offered to the

investor in primary market (IPO's etc.) and get investor in primary market (IPO's etc.) and get listed to stock exchange. Secondary market listed to stock exchange. Secondary market comprises of equity markets and the debt comprises of equity markets and the debt

markets. markets.

Who can apply for IPOWho can apply for IPORetail Individual Investor (RII)Retail Individual Investor (RII)

In retail individual investor category, investors can In retail individual investor category, investors can not apply for more then Rs Two lakh (Rs not apply for more then Rs Two lakh (Rs 2,00,000) in an IPO. Retail Individual investors 2,00,000) in an IPO. Retail Individual investors have an allocation of 35% of shares of the total have an allocation of 35% of shares of the total issue size in Book Build IPO's.issue size in Book Build IPO's.NRI's who apply with less then Rs 2,00,000 /-  are NRI's who apply with less then Rs 2,00,000 /-  are also considered as RII category.also considered as RII category.

High Networth Individual (HNI)High Networth Individual (HNI)

If retail investor applies more than Rs 2,00,000 /- of If retail investor applies more than Rs 2,00,000 /- of shares in an IPO, they are considered as HNI. shares in an IPO, they are considered as HNI.

Individual investors, NRI's, companies, Individual investors, NRI's, companies, trusts etc who bid for more then Rs 2 trusts etc who bid for more then Rs 2 lakhs are known as Non-institutional lakhs are known as Non-institutional bidders. They need not to register with bidders. They need not to register with SEBI like RII's. Non-institutional bidders SEBI like RII's. Non-institutional bidders have an allocation of 15% of shares of the have an allocation of 15% of shares of the total issue size in Book Build IPO's. total issue size in Book Build IPO's.

Non – institutional bidders

Financial Institutions, Banks, FII's and Mutual Funds who Financial Institutions, Banks, FII's and Mutual Funds who are registered with SEBI are called QIB's. They usually are registered with SEBI are called QIB's. They usually apply in very high quantities. QIBs are mostly apply in very high quantities. QIBs are mostly representatives of small investors who invest through representatives of small investors who invest through mutual funds, ULIP schemes of insurance companies and mutual funds, ULIP schemes of insurance companies and pension schemes.pension schemes.

QIB's have an allocation of 50% of shares of the total issue size QIB's have an allocation of 50% of shares of the total issue size in Book Build IPO's.in Book Build IPO's.

In a book built issue allocation to Retail Individual Investors In a book built issue allocation to Retail Individual Investors (RIIs), Non Institutional Investors (NIIs) and Qualified (RIIs), Non Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) is in the ratio of 35:15: 50 Institutional Buyers (QIBs) is in the ratio of 35:15: 50 respectively.respectively.

QIB's are prohibited by SEBI guidelines to withdraw their bids QIB's are prohibited by SEBI guidelines to withdraw their bids after the close of the IPOs. Retail and non-institutional after the close of the IPOs. Retail and non-institutional bidders are permitted to withdraw their bids until the day bidders are permitted to withdraw their bids until the day of allotment. of allotment. 

Qualified Institutional Bidders (QIB's)

Advantage NIB: Advantage NIB:

Non institutional bidder can apply for more then Rs Non institutional bidder can apply for more then Rs 2 Lakhs and may get much better allocation then 2 Lakhs and may get much better allocation then a retail bidder.a retail bidder.

Disadvantage NIB:Disadvantage NIB:   

Non-institutional bidders have an allocation of 15% Non-institutional bidders have an allocation of 15% of shares of the total issue size in Book Build of shares of the total issue size in Book Build IPO's, while retail Individual investors has 35% IPO's, while retail Individual investors has 35% (remaining 50% is for QIB's).  As Non-institutional (remaining 50% is for QIB's).  As Non-institutional category has much smaller in size, issue usually category has much smaller in size, issue usually oversubscribed much higher (then in retail oversubscribed much higher (then in retail category) and less shares allocation.category) and less shares allocation.

Mandatory to have PAN number Mandatory to have PAN number to apply in an IPOto apply in an IPO

Since July 2006, SEBI made PAN number Since July 2006, SEBI made PAN number mandatory for IPO applicants. Forms mandatory for IPO applicants. Forms submitted without PAN number or wrong submitted without PAN number or wrong PAN numbers are considered as faulty PAN numbers are considered as faulty application and they are not considered application and they are not considered for IPO allotment.for IPO allotment.

It's highly recommended that you double It's highly recommended that you double check your PAN number information check your PAN number information before submitting the IPO application before submitting the IPO application form. If you are filling the IPO application form. If you are filling the IPO application through online stock broker, make sure he through online stock broker, make sure he has correct information.has correct information.

Issue openIssue openAs per Clause 8.8.1, Subscription list for public As per Clause 8.8.1, Subscription list for public issues shall be kept open for at least 3 working issues shall be kept open for at least 3 working days and not more than 10 working days. In case days and not more than 10 working days. In case of Book built issues, the minimum and maximum of Book built issues, the minimum and maximum period for which bidding will be open is 3 - 7 period for which bidding will be open is 3 - 7 working days extendable by 3 days in case of a working days extendable by 3 days in case of a revision in the price band. The public issue made revision in the price band. The public issue made by an infrastructure company, satisfying the by an infrastructure company, satisfying the requirements in Clause 2.4.1 (iii) of Chapter II requirements in Clause 2.4.1 (iii) of Chapter II may be kept open for a maximum period of 21 may be kept open for a maximum period of 21 working days. As per clause 8.8.2., Rights issues working days. As per clause 8.8.2., Rights issues shall be kept open for at least 30 days and not shall be kept open for at least 30 days and not more than 60 days. more than 60 days.

This is a very important information for all This is a very important information for all IPO investors. If you are applying for an IPO investors. If you are applying for an IPO, make sure you retain following IPO, make sure you retain following information for future correspondence with information for future correspondence with the company or registrar of the issue.the company or registrar of the issue.

Application form photo copyApplication form photo copy

Cheque photo copyCheque photo copy

Application number in case of online IPO Application number in case of online IPO submissionsubmission

Important points to remember:

'Market Lot Size' and 'Minimum 'Market Lot Size' and 'Minimum Order QuantityOrder Quantity

IPO 'Market Lot' and 'Minimum Order Quantity' are two IPO 'Market Lot' and 'Minimum Order Quantity' are two important factors investor should know while bidding for an important factors investor should know while bidding for an IPO.IPO.Minimum Order Quantity, as name says, is the minimum Minimum Order Quantity, as name says, is the minimum number of shares investor can apply while bidding in an number of shares investor can apply while bidding in an IPO. If investor wants to bid for more shares, they can apply IPO. If investor wants to bid for more shares, they can apply in in multiples of IPO market lotmultiples of IPO market lot (lot Size or IPO bid lot) of (lot Size or IPO bid lot) of shares.shares.Usually (Market Lot Usually (Market Lot ** Lower side of the issue price) values Lower side of the issue price) values around Rs 5500/- to Rs 6000/-. around Rs 5500/- to Rs 6000/-. Example:Example:IPO:IPO: Power Grid Corporation of India Limited IPO Power Grid Corporation of India Limited IPOPublic Issue Price:Public Issue Price: Rs. 44/- to Rs. 52/- Per Equity Share Rs. 44/- to Rs. 52/- Per Equity Share Market Lot:Market Lot: 125 Shares 125 Shares Minimum Order Quantity:Minimum Order Quantity: 125 Shares 125 Shares Investor can apply in this IPO as below:Investor can apply in this IPO as below:At Rs 44/- * 125 Shares * 1 Lot = Rs 5500/-At Rs 44/- * 125 Shares * 1 Lot = Rs 5500/-At Rs 44/- * 125 Shares * 2 Lot = Rs 11000/-At Rs 44/- * 125 Shares * 2 Lot = Rs 11000/-At Rs 44/- * 125 Shares * 18 Lot = Rs 99000/-At Rs 44/- * 125 Shares * 18 Lot = Rs 99000/-

Book Building IPO remains open for 3 Book Building IPO remains open for 3 to 7 days and may extend for to 7 days and may extend for another 3 days in case of revision in another 3 days in case of revision in price if issue remain unsubscribe in price if issue remain unsubscribe in initially decided days. Number of initially decided days. Number of days issue remain open is decided by days issue remain open is decided by the issuer company and its issue lead the issuer company and its issue lead manager. manager.

Where do I get an IPO Where do I get an IPO application form?application form?

Investor can get the IPO Application Forms Investor can get the IPO Application Forms from: from:

Nearest Nearest Stock broker office Stock broker office (MSTL)(MSTL) or or From the From the syndicate member officesyndicate member office of an of an

IPO. Syndicate members are usually IPO. Syndicate members are usually banksbanks or other financial institutions (i.e. Kotak). or other financial institutions (i.e. Kotak). List of syndicate members of an IPO are List of syndicate members of an IPO are published in IPO Prospectus.published in IPO Prospectus.

IPO application forms are available for free. IPO application forms are available for free. Filled application can be submitted to any Filled application can be submitted to any stock broker office or syndicate member stock broker office or syndicate member office.office.

Tips to choose right IPO for Tips to choose right IPO for investment.investment.

1. The issue size has to be big, the bigger the issue, 1. The issue size has to be big, the bigger the issue, the higher is the capability of the promoters.the higher is the capability of the promoters.

2. Money begets more money, so if they have 2. Money begets more money, so if they have raised more money, be sure, they will be able to raised more money, be sure, they will be able to earn more.earn more.

3. A higher promoters stake is a must, instills a 3. A higher promoters stake is a must, instills a sense of responsibility.sense of responsibility.

4. A background check on the promoters 4. A background check on the promoters capabilitiescapabilities

5. Size of projects in the pipeline, will indicate the 5. Size of projects in the pipeline, will indicate the scalability of the companyscalability of the company

6. Last but not the least, in big companies, look for 6. Last but not the least, in big companies, look for long term wealth creation long term wealth creation and not speculative and not speculative gains.gains.

Please remember these things:Please remember these things:

  

All Out Station applications should be attached with an All Out Station applications should be attached with an “At Par Cheque” “At Par Cheque” or a Demand or a Demand Draft payable at Ernakulam only…Draft payable at Ernakulam only…

Fund transfer facility will be available for all existing customers of Muthoot Securities Fund transfer facility will be available for all existing customers of Muthoot Securities Ltd.Ltd.

Fund transfer request letter is mandatory for availing fund transfer facility. Fund transfer request letter is mandatory for availing fund transfer facility. Fund transfer request letters should reach HO before 12pm of IPO closing Fund transfer request letters should reach HO before 12pm of IPO closing datedate

Improper and incomplete application will be rejected.Improper and incomplete application will be rejected.

Pancard copy should be attached with all IPO applicationsPancard copy should be attached with all IPO applications

Mention the Mention the PAN number and DP id correctly PAN number and DP id correctly in all IPO forms (and the same should be in all IPO forms (and the same should be readable)in the IPO formsreadable)in the IPO forms

Customer name and application number should be written on the back side of the Customer name and application number should be written on the back side of the cheque/DD.cheque/DD.

Application forms should be send to HO in a separate envelope addressed to IPO Application forms should be send to HO in a separate envelope addressed to IPO dept. dept.

Out Station Branches/Franchisees should not  accept IPO forms on the last day of Out Station Branches/Franchisees should not  accept IPO forms on the last day of Issue Closing( 1Issue Closing( 1stst December 2010) December 2010)

Branches must confirm the delivery of IPO forms before 12pm on the Issue closing Branches must confirm the delivery of IPO forms before 12pm on the Issue closing date.date.

The Cheque or Demand Draft should be drawn in favour of :The Cheque or Demand Draft should be drawn in favour of :

In case of Resident Retail and Non – Institutional Bidders: In case of Resident Retail and Non – Institutional Bidders:

  

Eg: Eg: “Escrow Account-  MFL- R ““Escrow Account-  MFL- R “

Thank youThank you