Brief Introduction: Market Refers To Open Market Operations in Highly Marketable Short-Term Debt Instruments

BRIEF INTRODUCTION
Development of an economy is based on sound financial system. Its a wellknown fact that finance is the lifeline for any business enterprise. The efficient
functioning and success of business operations depend upon the availability of adequate
fund at the right time and required amount of funds as and when required.
Financial Market is the place where the investors and fund seekers meet for
mutual benefits.
Financial Market is divided into Money market and Capital market. Money
market refers to open market operations in highly marketable short-term debt instruments
and the capital market deals in long-term debt issues and stocks.
CAPITAL MARKET:
Capital market is the market for financial assets having a period of maturity of
more than one year or of an indefinite period. Thus, capital market provides long-term
resources needed by medium and large scale industries. Capital market is constituted by
three parts. Equity market debt market, derivative markets.
Capital market is a market for securities which consists of two segments:
Primary market
Secondary market
PRIMARY MARKET
The primary market is also known as the new issues market. It deals with new
securities being issued for the first time. The essential function of a primary market is to
facilitate the transfer of investible funds from savers to entrepreneurs seeking to establish
new enterprises or to expand existing ones through the issue of securities for the first
time. The investors in this market are banks, financial institutions, insurance companies,
mutual funds and individuals. A company can raise capital through the primary market in
the form of equity shares, preference shares, debentures, loans and deposits. Funds raised
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may be for setting up new projects, expansion, diversification, modernization of existing

projects, mergers and takeovers etc.
SECONDARY MARKET
The secondary market is also known as the stock market or stock exchange. It is a
market for the purchase and sale of existing securities. It helps existing investors to
disinvest and fresh investors to enter the market. It also provides liquidity and
marketability to existing securities. It also contributes to economic growth by
channelizing funds towards the most productive investments through the process of
disinvestment and reinvestment. Securities are traded, cleared and settled within the
regulatory framework prescribed by SEBI. Advances in information technology have
made trading through stock exchanges accessible from anywhere in the country through
trading terminals. Along with the growth of the primary market in the country, the
secondary market has also grown significantly during the last ten years.
ROLE OF PRIMARY MARKET

The primary market provides the channel for sale of new securities. Primary
market provides opportunity to issuers of securities; Government as well as corporate, to
raise resources to meet their requirements of investment and/or discharge some
obligation. The new issue market does not include certain other sources of new long term
external finance, such as loans from financial institutions. Borrowers in the new issue
market may be raising capital for converting private capital into public capital; this is
known as "going public."
NEED FOR ISSUING SHARES BY COMPANIES TO PUBLIC

Most companies are usually started privately by their promoter(s). However, the
promoters capital and the borrowings from banks and financial institutions may not be
sufficient for setting up or running the business over a long term. So companies invite the
public to contribute towards the equity and issue shares to individual investors. The way
to invite share capital from the public is through a Public Issue. Simply stated, a public
2
issue is an offer to the public to subscribe to the share capital of a company. Once this is
done, the company allots shares to the applicants as per the prescribed rules and
regulations laid down by SEBI.
CLASSIFICATION OF ISSUES
Primarily, issues can be classified as a Public, Rights or Preferential issues (also
known as private placements). While public and rights issues involve a detailed
procedure, private placements or preferential issues are relatively simpler. The
classification of issues is illustrated below:
Figure 1: Classification of Issues
Initial Public Offering (IPO):

Initial Public Offering (IPO) is when an unlisted company makes either afresh
issue of securities or an offer for sale of its existing securities or both for the first time to
the public. This paves way for listing and trading of the issuers securities.
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A Follow on Public Offering (Further Issue):

A follow on public offering (Further Issue) is when an already listed company
makes either a fresh issue of securities to the public or an offer for sale to the public,
through an offer document.
Rights Issue:
Rights Issue is when a listed company which proposes to issue fresh securities to
its existing shareholders as on a record date. The rights are normally offered in a
particular ratio to the number of securities held prior to the issue. This route is best suited
for companies who would like to raise capital without diluting stake of its existing
shareholders.
A Preferential issue:
A Preferential issue is an issue of shares or of convertible securities by listed
companies to a select group of persons under Section 81 of the Companies Act, 1956
which is neither a rights issue nor a public issue. This is a faster way for a company to
raise equity capital. The issuer company has to comply with the Companies Act and the
requirements contained in the Chapter pertaining to preferential allotment in SEBI
guidelines which inter-alia include pricing, disclosures in notice etc. This means an issue
can be privately placed where an allotment is made to less than 50 persons.
MEANING OF ISSUE PRICE

The price at which a company's shares are offered initially in the primary market
is called as the Issue price. When they begin to be traded, the market price may be above
or below the issue price.
Difference between Public Issue and Private Placement or Preferential

Allotment:
When an issue is not made to only a select set of people but is open to the general
public and any other investor at large, it is a public issue. But if the issue is made to a
select set of people, it is called private placement. As per Companies Act, 1956, an issue
becomes public if it results in allotment to 50 persons or more. This means an issue can
be privately placed where an allotment is made to less than 50 persons.
NEED AND IMPORTANCE OF THE STUDY
The primary market plays an important role in the securities market by forming a
link between the savings and investments. It is through this market that the
borrowers viz., the Government and the corporates issue securities in which the
investors deploy their savings.
The primary market performs the crucial function of facilitating capital formation
in the economy.
This is the market for new long term equity capital. The primary market is the
market where the securities are sold for the first time. Therefore it is also called
the new issue market (NIM).
In a primary issue, the securities are issued by the company directly to investors.
The company receives the money and issues new security certificates to the
investors.
Primary issues are used by companies for the purpose of setting up new business
or for expanding or modernizing the existing business.
MAJOR REFORMS OF PRIMARY MARKET
Reduced the timeline between the launch of an IPO and listing of shares to 12
days from 21 days earlier. This ensures the money invested in an IPO is blocked
for a shorter time.

Introduction of Application Supported by Blocked Amount, or ASBA. Under this,
an investors account is debited only when the actual allotment of shares happen
in a public issue. Recently, ASBA has been made mandatory for all non-retail
investors. ASBA is safer, less time-consuming, and more transparent as compared
with the traditional method of investing in public floats.

100% margining for institutional investors in IPOs from 10% earlier. This ensures
only serious institutional investors will participate in the bidding. It enhances
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transparency as it prevents issuers from attracting investors by way of displaying
inflated over-subscription numbers from institutional investors.

Introduction of French auction for follow-on public offerings. Under this,
institutional investors are allotted shares according to the bidding price and the
lowest bid price becomes the cut-off for retail investors. This ensures higher
listing premium for retail investors.

Allowed more time for retail investors for investing in IPOs and FPOs. Extra two
days allow retail investors to gauge the demand from the bigger investors and the
prospects of the issuer.

Introduced anchor investors for primary market issuances. This would help firms
going public to get a capital commitment from a group of institutional investors
for a period longer than usual investors, which in turn could indicate the strength
of the company and promotes its brand in the market circle.
OBJECTIVES OF THE STUDY

To know the procedure through which we can apply a primary market issue.
To highlight the ASBA (Application Supported by Blocked Amount) and Non
ASBA form of applying for the issue.
To study Book Building issuing companies listed in NSE and BSE and analyze its
performance.
To study fixed price issuing companies listed in BSE and analyze its performance.
To compare the returns of Book Building and Fixed Price Issues.
To draw conclusions and offer suggestions for companies and investors in gaining
returns through Primary market.
SCOPE OF THE STUDY

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The scope of the study is limited to only Indian Primary Market relating to Equity.
This study is based on the specified Book Building and Fixed Price issuing
companies of IPOs which are listed in BSE and NSE. So, the present study
includes the companies which are raised the capital through Public issues, the
Returns.
The study confined to the specific objectives mentioned. Based on the data
available of trading of companies will be considered to analyze the performance
of IPOs.
RESEARCH METHODOLOGY
For the study of Primary market mainly the secondary data is extracted from the
Bombay Stock Exchanges site www.bseindia.com and also various books have been
referred for the same. Mainly the data collection done by
1) The direct interacting with the project guide.
2) The most of the data is collected from various text books, journals, magazines,
Stock Exchanges like NSE and BSE, SEBI.
Formulae used for Book Building and Fixed Price:

The initial return on IPOs has been computed as the difference between closing
price on the first day of trading and offer price, divided by the offer price.
For Book Building Issues:
Closing Price Offer price

Offer price
For Fixed Price Issues:
X
100
P1 = Closing Price on the first day of trading.

P0 = Offer Price
The returns for the different time period gaps considered calculated by taking
closing prices of the given stock after the specified time date from the listing day.
So, the formula used in equation as follows:
For Book Building Issues:
Pt P0
X 100
P0
For Fixed Price Issues:
Pt P0
Pt = Closing price at time t

P0 = Closing price on listing day
LIMITATIONS OF THE STUDY

The major limitations of the study of Primary market are as follows:-
1) The study under taken of the selected companies with only one tool and had
limited time period.
2) This study was conducted only for 45 days.
INDUSTRY PROFILE:
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Indian Stock Exchange

Broadly speaking the Capital Market is classified in to two categories. They are
the Primary market (New Issues Market) and the Secondary market (Old (Existing)
Issues Market). This classification is done on the basis of the nature of the instrument
brought in the market.
Meaning of Stock Market or Stock Exchange

Stock Market or Stock Exchange (also called Share Market) is one important
constituent of Capital Market. Stock Exchange is an organized market for the purchase
and sale of industrial and financial security. It is convenient place where trading in
securities is conducted in systematic manner i.e. as per certain rules and regulations.
It performs various functions and offers useful services to investors and
borrowing companies. It is an investment intermediary and facilitates economic and
industrial development of a country.
Stock exchange is an organized market for buying and selling corporate and other
securities. Here, securities are purchased and sold out as per certain well-defined rules
and regulations. It provides a convenient and secured mechanism or platform for
transactions in different securities. Such securities include shares and debentures issued
by public companies which are duly listed at the stock exchange and bonds and
debentures issued by government, public corporations and municipal and port trust
bodies.
Stock exchanges are indispensable for the smooth and orderly functioning of
corporate sector in a free market economy. A stock exchange need not be treated as a
place for speculation or a gambling den. It should act as a place for safe and profitable
investment, for this, effective control on the working of stock exchange is necessary. This
will avoid misuse of this platform for excessive speculation, scams and other undesirable
and anti-social activities.
There are 23 recognized stock exchanges in India out of which the prominent two
are Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). While Bombay
stock exchange (BSE) is the oldest in India. National Stock Exchange (NSE) is the first
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exchange in the world to use satellite communication technology for trading and the
latest Stock Exchange to add to the list is the MCX Stock Exchange Limited (MCX-SX)
which is the first listed Stock Exchange in India.
BOMBAY STOCK EXCHANGE (BSE)

Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange
Ltd.), is Asias first Stock Exchange and one of Indias leading exchange groups. Over
the past 137 years, BSE has facilitated the growth of the Indian corporate sector by
providing it an efficient capital-raising platform. Popularly known as BSE, the bourse
was established as The Native Share & Stock Brokers' Association" in 1875.
BSE is a corporatized and demutualised entity, with a broad shareholder-base
which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange
as strategic partners.BSE provides an efficient and transparent market for trading in
equity, debt instruments, derivatives, mutual funds. It also has a platform for trading in
equities of small-and-medium enterprises (SME). Around 5000 companies are listed on
BSE making it world's No. 1 exchange in terms of listed members. The companies listed
on BSE Ltd command a total market capitalization of USD Trillion 1.06 as of May 15,
2012. BSE Ltd is world's fifth most active exchange in terms of number of transactions
handled through its electronic trading system. It is also one of the worlds leading
exchanges (5th largest in May 2012) for Index options trading
(Source: World Federation of Exchanges).
BSE also provides a host of other services to capital market participants including
risk management, clearing, settlement, market data services and education. It has a global
reach with customers around the world and a nation-wide presence. BSE systems and
processes are designed to safeguard market integrity, drive the growth of the Indian
capital market and stimulate innovation and competition across all market segments. BSE
is the first exchange in India and second in the world to obtain an ISO 9001:2000
certifications. It is also the first Exchange in the country and second in the world to
receive Information Security Management System Standard BS 7799-2-2002 certification
for its On-Line trading System (BOLT). It operates one of the most respected capital
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market educational institutes in the country (the BSE Institute Ltd.). BSE also provides
depository services through its Central Depository Services Ltd. (CDSL) arm.
BSEs popular equity index - the SENSEX - is India's most widely tracked stock
market benchmark index. It is traded internationally on the EUREX as well as leading
exchanges of the BRCS nations (Brazil, Russia, China and South Africa).
NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange of India Limited has genesis in the report of the
High Powered Study Group on Establishment of New Stock Exchanges. It recommended
promotion of a National Stock Exchange by financial institutions (FIs) to provide access
to investors from all across the country on an equal footing. Based on the
recommendations, NSE was promoted by leading Financial Institutions at the behest of
the Government of India and was incorporated in November 1992 as a tax-paying
company unlike other stock exchanges in the country.
The National Stock Exchange (NSE) operates a nation-wide, electronic market,
offering trading in Capital Market, Derivatives Market and Currency Derivatives
segments including equities, equities based derivatives, Currency futures and options,
equity based ETFs, Gold ETF and Retail Government Securities. Today NSE network
stretches to more than 1,500 locations in the country and supports more than 2, 30,000
terminals.
With more than 10 asset classes in offering, NSE has taken many initiatives to
strengthen the securities industry and provides several new products like Mini Nifty,
Long Dated Options and Mutual Fund Service System. Responding to market needs, NSE
has introduced services like DMA, FIX capabilities, co-location facility and mobile
trading to cater to the evolving need of the market and various categories of market
participants.
NSE has made its global presence felt with cross-listing arrangements, including
license agreements covering benchmark indexes for U.S. and Indian equities with CME
Group and has also signed a Memorandum of Understanding (MOU) with Singapore
Exchange (SGX) to cooperate in the development of a market for India-linked products
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and services to be listed on SGX. The two exchanges also will look into a bilateral
securities trading link to enable investors in one country to seamlessly trade on the other
country's exchange.
NSE is committed to operate a market ecosystem which is transparent and at the
same time offers high levels of safety, integrity and corporate governance, providing ever
growing trading & investment opportunities for investors.
MCX Stock Exchange Limited (MCX-SX)

MCX Stock Exchange Limited (MCX-SX), Indias new stock exchange,
commenced operations in the Currency Derivatives (CD) segment on October 7, 2008
under the regulatory framework of Securities & Exchange Board of India (SEBI) and
Reserve Bank of India (RBI). The Exchange is recognized by SEBI under Section 4 of
Securities Contracts (Regulation) Act, 1956. In line with global best practices and
regulatory requirements, clearing and settlement is conducted through a separate clearing
corporation, MCX-SX Clearing Corporation Ltd. (MCX-SXCCL).
MCX-SX, which had started operations in Currency Futures segment, has been
witnessing a steady and significant growth in average daily turnover and open interest
ever since its inception. The average daily turnover (ADT) of currency futures stood at Rs
13,530.47 crore at the end of July 2012, a significant increase from an ADT of Rs 324.78
crore in the first month of operations. Completing the spectrum of currency risk
management products, MCX-SX recently introduced its first differentiated product in
Currency Options with a smaller tick size of 10 bps.
The currency derivatives segment at MCX-SX is supported by a strong
membership base and witnesses a nation-wide participation. At the end of July 2012,
MCX-SX had 751 members and saw participation from 714 towns and cities across
India.
MCX-SX received permissions to deal in Interest Rate Derivatives, Equity,
Futures & Options on Equity and Wholesale Debt Segment, vide SEBIs letter dated July
10, 2012.
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COMPANY PROFILE:IFCI Financial Services Ltd (IFIN)
was promoted in 1995, by IFCI
Ltd., to provide a wide range of
financial
products
and
services to investors, institutional
and retail. IFIN is primarily
involved
Investment Banking, Mutual
in
Stock
Broking,
Fund Distribution & Advisory Services, Depository Participant Services, Insurance

Products Distribution and the like.
IFIN is positioned as a global financial supermarket, built on the foundations of
incisive research and trust. Intense interaction with investors helps us understand their
specific needs and suggest holistic and appropriate financial solutions. Our team of
professionals continuously scans the financial arena and stay ever prepared to educate
investors and partner them in creating enduring wealth.
IFCI Limited, Our legendary parent Institution

The Government of India established The Industrial Finance Corporation of India
(IFCI) on July 1, 1948, as Indias first and premier Development Financial Institution, to
cater to the long term financial needs of the industrial sector.
By the early 1990s, with the need for greater flexibility to respond to the changing
financial system, IFCI was mandated to directly access the capital markets for its fund
needs. Therefore, the constitution of IFCI was changed in 1993 from a statutory
Corporation to a Company under the Indian Companies Act, 1956. The name of the
Company itself was changed to IFCI Limited with effect from October 1999.
IFCI has achieved a financial turnaround with the consistent support and
cooperation of all its stakeholders and is now endeavoring to re-position itself. In addition
to its core competence in long-term lending to industrial and infrastructure sectors, IFCI
is also enhancing its organizational value through better realization of its Non-performing
Assets (NPAs) and unlocking of value of its investment portfolio including unquoted
investments as well as real estate assets.
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IFIN Management Team

IFIN has well experienced committed and qualified professionals in various facets of the
financial landscape to provide unmatched services to its diverse clientele. The team is being
strengthened to lend support to the new areas into which IFIN is embarking.
Mr. Sujit K. Mandal.

Prior to joining the financial sector in 1992, Mr. Mandal has had 19 years of experience in
engineering industries including Hindustan Aeronautics Ltd. in the Management of
Operations, Production, Projects, Corporate Planning, etc. For the last 15 years he has
worked with IFCI Ltd. in different capacities. As a Whole time Director now, he is
responsible for entire Credit Management of the IFCI. He was also instrumental in setting up
of Assets Care Enterprise Ltd. (ACE), an asset reconstruction company promoted by IFCI.
Mr. Mandal is a Bachelor of Engineering and he has also been awarded a PGDM from IIMA.
Mr. Manoj P. Rege.
Mr.Rege has worked in various capacities for over 22 years with different Economic
Ministries of the Government of India, including the position of Additional Economic
Adviser, in Ministry of Food & Civil Supplies. He took voluntary retirement from the Indian
Economic Services (IES) in 1995. He is a Post-Graduate in Economics from the UK.
Prof. Shobhit Mahajan.
Currently Director, Delhi University Computer Center, Prof. Mahajan obtained his M.S.
(Physics) and PhD (Physics) from the University of California, Berkeley. He has spent over
27 years in research and teaching, including the Universities of Delhi and California. He has
authored several books on Science and Information Technology.
Mr. M.V.Muthu.
Mr. Muthu was the Executive Director and Chief Executive of IFCI before taking voluntary
retirement in 2005. He continued as the Chairman of IFCI Venture Capital till 2006, before
voluntarily relinquishing the position. He was the first Chairman of ACE, an Asset
Reconstruction Company formed by IFCI. He has been a Director on several Boards, the
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PRIMARY MARKET
Generally, the personal savings of the entrepreneur along with contributions from
friends and relatives are pooled in to start new business ventures or to expand existing
ones. However, this may not be feasible in the case of capital intensive or large projects
as the entrepreneur (promoter) may not be able to bring in his share of contribution
(equity), which may be sizable, even after availing term loan from Financial
Institutions/Banks. Thus availability of capital is a major constraint for the setting up or
expanding ventures on a large scale.
Instead of depending upon a limited pool of savings of a small circle of friends
and relatives, the promoter has the option of raising money from the public across the
country/world by issuing) shares of the company. For this purpose, the promoter can
invite investment to his or her venture by issuing offer document which gives full details
about track record, the company, the nature of the project, the business model, etc. If the
investor is comfortable with this proposed venture, he may invest and thus become a
shareholder of the company. Through aggregation, even small amounts available with a
very large number of individuals translate into usable capital for corporate.
Primary market is a market wherein corporate issue new securities for raising
funds generally for long term capital requirement.
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The companies that issue their shares are called issuers and the process of issuing
shares to public is known as public issue. This entire process involves various
intermediaries like Merchant Banker, Bankers to the Issue, Underwriters, and Registrars
to the Issue etc. All these intermediaries are registered with SEBI and are required to
abide by the prescribed norms to protect the investor.
The Primary Market is, hence, the market that provides a channel for the issuance
of new securities by issuers (Government companies or corporate) to raise capital. The
securities (financial instruments) may be issued at face value, or at a discount / premium
in various forms such as equity, debt etc. They may be issued in the domestic and / or
international market.
Features of primary markets include:
The securities are issued by the company directly to the investors.

The company receives the money and issues new securities to the investors.
The primary markets are used by companies for the purpose of setting up new
ventures/ business or for expanding or modernizing the existing business

Primary market performs the crucial function of facilitating capital formation in
the economy.
FUNCTIONS OF PRIMARY MARKET

The main function of New Issue Market is to facilitate the transfer of resources
from savers to users seeking to establish new enterprise or to expand/diversify existing
units. The savers are individuals, commercial banks, insurance company etc. the users are
public limited companies and the government. These markets play an important role of
mobilizing the funds from the savers and transfer them to borrowers for production
purposes, an important requisite of economic growth. In this basis the new issue market
can be classified as:
Market where firms go to the public for the first time through Initial Public
Offering (IPO).
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Market where firms which are already trade raise additional capital through
Seasoned Equity Offering (SEO).
This main function of new issue market can be split from the operational stand-point, into
three service functions
I.
II.
III.
Origination,
Underwriting,
Distribution.
Origination:
The term origination refers to the work of investigation and analysis and processing
of new proposals. Origination starts before an issue is actually floated in the market.
There are two aspects in this function:
A careful study of the technical, economic and financial viability to ensure

soundness of the project. This is a preliminary investigation undertaken by the
sponsors of the issue.
Advisory services which improve the quality of capital issues and ensure its
success.
Underwriting:
Underwriting is an agreement whereby the underwriter promises to subscribe to a
specified number of shares or debentures or a specified amount of stock in the event of
public not subscribing to the issue. If the issue is fully subscribed then there is no liability
for the underwriter. If a part of share issues remain unsold, the underwriter will buy the
shares. Thus underwriting is a guarantee for the marketability of shares.
Distribution:
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Distribution is the function of sale of securities to ultimate inventors. This service

is performed by brokers and agents who maintain regular and direct contact with the
ultimate investors.
Benefits of Primary Market
Company need not repay the money raised from the market.
Money has to be repaid only in the case of winding up or buyback of shares.
There is no financial burden, because it does not involve interest payment. If the
company earns profit, dividend may be paid.

Better performance of the company enhances the value for the shareholders.
It enables trading and listing of securities at stock exchanges.
There is greater transparency in the corporate governance.
If the company performs well, the image of the company brightens.
INVESTOR
Primary markets attract a wide spectrum of investors. Different categories of
investors buy shares in the primary market. Here may be reservations for retail investors,
non-institutional investors, Qualified Institutional Bidders (QIBs), employees of the
issuing company, existing shareholders of the issuing company, etc.
Investors are broadly categorized as:

Qualified Institutional Buyers
Non-institutional investors
Retail investors
Qualified Institutional Buyers: Mutual funds,, banks, financial institutions like LIC and
foreign investors, fall under the category of QIBs. Earlier, QIBs were not required to
submit any money along with their bids and this had led to some manipulative practices.
However, SEBI has recently changed the provisions and now QIBs have to pay a margin,
not the full amount, at the time of bidding in the book building of an issue.
Non-Institutional Investors: Resident Indian individuals, HUF, companies, corporate
bodies, NRIs, societies and trusts whose application size in terms of value is more than
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Rs 1lakh also come unde1r this category. At le1ast 15 percent of the total issue has to be
reserved for non-institutional investors.
Retail Investors: They are defined in terms of the value of the primary issue applied by
them; the value of the applied shares should not exceed Rs 1lakh. According to the new
guidelines, the inclusion of PAN in application forms for public/rights issues has been
also made mandatory, irrespective of the value of application.
PROCEDURE OF PRIMARY MARKET ISSUE:

Preparation and Filing of Offer Document:
i. A company wanting to raise capital from the public is required to prepare an offer
document giving sufficient information and disclosures, which enables (potential)
investors to make an informed decision. Accordingly, the offer document is required to
contain details about the company, its promoters, the project, financial details, objects of
raising the money, terms of the issue etc.
ii. The issuer company engages a SEBI registered merchant banker to prepare the offer
document. Besides, due diligence in preparing the offer document, the merchant banker is
also responsible for ensuring legal compliance. The merchant banker facilitates the issue
in reaching the prospective investors (marketing the issue).
iii. The draft offer document thus prepared is filed with SEBI and is made available on
SEBIs website
(http://www.sebi.gov.in)
along
with
its
status
of
processing
(http://www.sebi.gov.in/PMDData.html). Company is also required to make a public

announcement about the filing in English, Hindi and in regional language newspapers. In
case, investors notice any wrong / incomplete / lack of information in the offer document,
they may send their representation / complaint to the merchant banker and / or to SEBI.
19
iv. The Indian regulatory framework is based on a disclosure regime. SEBI reviews the
draft offer document and may issue observations on the draft offer document with a view
to ensure that adequate disclosures are made by the issuer company/merchant bankers in
the offer document to enable the investor to make an informed investment decision in the
issue. It must be clearly understood that SEBI does not vet and approve the offer
document.
v. SEBIs observations on the draft offer document are forwarded to the merchant banker,
who incorporates the necessary changes and files the final offer document with SEBI,
Registrar of Companies (ROC) and stock exchange(s). This is made available on
websites of the merchant banker, stock exchange(s) and SEBI.
Opening of the Issue:

vi. After completing legal formalities, the issuer company issues advertisements in
English, Hindi and regional language news papers and the issue is open to public for
subscription.
vii. If the prospective investor is interested in subscribing to the shares of the issuer
company based on what is disclosed in the offer document, he can apply for its shares (or
debentures) before the issue closes, by duly filling up the application form and making
the payment.
viii. The entire back office operation of the public issue, including processing of
application forms, dispatch of refunds, allotment of securities, is handled by the
Registrar to the Issue (RTI) on behalf of the issuer company.
ix. It is to be noted that only one application per PAN is allowed in any issue. If investor
makes more than one application, all the applications are liable to be rejected. The RTI
matches applicants name in the application form and verifies it against the PAN, demat
account details (DP ID and Demat A/c No) and also weeds out duplicate applications.
Allotment and Listing:
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x. The issue when closes (investor cannot apply beyond the closing date) the shares are
allotted to the applicants proportionally or on lottery basis, if there is oversubscription.
The merchant banker and RTI finalize the basis of allotment.
This is approved by the stock exchange officials and the basis of allotment is made
available in the website of the RTI. The issuer company issues advertisements in English,
Hindi and regional language news papers about the issue price and basis of allotment.
xi. Upon allotment, investor will receive demat credit within 12 days. The dispatch of
refund cheques, instructions for unblocking amount in bank account (for ASBA) and
instructions for electronic credits of refund money, is given by the RTI within 12 days
of the close of the issue. ASBA is dealt in the section How to apply in public issue.
xii. The shares of the company are then listed on the stock exchange within 12 working
days of the close of the issue. Listing of shares in stock exchange enables the investor to
buy securities from or sell securities to other investors (secondary market).
xiii. The complete contact details of all the intermediaries involved in an issue namely
merchant banker, RTI, banker to the issue etc. are available in the offer document. In case
the investor needs any clarification they can contact them.
METHODS OF PRICING BY COMPANIES ISSUING SECURITIES

Indian primary market ushered in an era of free pricing in 1992. Following this,
guidelines have provided that the issuer in consultation with Lead Manager (L.M.) should
decide the price. There is no price formula stipulated by SEBI. SEBI does not play role in
price fixation. There are two types of issues one where company and LM fix a price
(called fixed price) and other, where the company and LM stipulate a floor price or a
price band and leave it to market forces to determine the final price (price discovery
through book building process).
Pricing of primary market issues
On the basis of pricing, issues can be classified into two types:
1. Fixed Price issues

2. Book Built issues.
21
1. FIXED PRICE METHOD

In a fixed priced offer, an issuer company is allowed to freely price the issue. The
basis of issue Price is disclosed in the offer document where the issuer is closes in detail
about the qualitative and quantitative factors justifying the issue price. The issuing firm
(with the help of the underwriter) decides upon a selling price and offers a set number of
shares at that price. The underwriter does not build a book of potential orders; instead, the
price is based upon the underwriters judgment of the market conditions and the intrinsic
value of the company.
The Issuer company can mention a price band of 20% (cap in price band should
not be more than 20% of the floor price) in the Draft offer documents filed with SEBI
and actual price can be determined at a later date before filing of the final offer document
with SEBI / ROCs.
In its offering materials, the issuer will give both a qualitative and quantitative
justification for the chosen price. If the offering is oversubscribed, the shares are
allocated on a pro rata basis. This type of offering is commonly used in Singapore,
Finland, India and the U.K.
In a Fixed Price Issue the company raising funds decides the price at which it
will sell (issue) its shares to the public and the same is printed in the Offer Document.
This issue is kept open for 310 working days.
2. BOOK BUILDING METHOD

In 1998 SEBI introduced guidelines for issuing shares through the Book Building
process based on the recommendations of the Malegam Committee-1995. Book
Building means 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 the securities is
assessed on the basis of the bids obtained for the quantum of securities to be issued by
means of a notice, circular, advertisement, document or information memoranda or offer
document for subscription by the issuer. This method provides an opportunity to the
market to discover price for securities.
22
In case the issuer chooses to issue securities through the book building route then
as per SEBI guidelines, and Issuer Company can issue securities in the following manner:
100% of the net offer to the public through the book building route.
75% of the net offer to the public through the book building process and
25% through the fixed price portion
BOOK BUILDING PROCESS

In a Book Building issue the issuer company mentions the minimum and
maximum price (price band) at which it will sell (issue) its shares. Thus the offer
document (in this case, called the Red Herring Prospectus) contains only the price band
instead of the price at which its shares are offered to the public.
Within this price band the investor can choose the price at which the investors are
willing to buy the shares and also the quantity. As this process is similar to bidding in an
auction, the application form for book built issue is also known as the bid form. At times
the issuer may revise the price band (revision of price band) which has to be
accompanied with news paper advertisement.
Bids by various investors are entered into the stock exchange system through the
brokers (also called syndicate member) terminal. The list of the bid received from
investors at various price bands is known as the book and can be seen in the website(s)
of the stock exchange for each investor category.
Based on the total demand in the book, the cut off price is then decided by the
issuer and merchant banker. The cut off price is the price at which the cumulative demand
for shares, equals or exceeds the offer size.
All investors who applied (bid) for shares at or above the cut off price will be
allotted shares at the cut off price (issue price) proportionately. If the investment is less
than 200,000 (retail investor), the investor have the option of bidding at the cut off price
by ticking the cut-off option in the application form.
After the allotment, a public advertisement is issued, giving details of the issue price as
well as a table showing the number of securities and the amount payable by successful
bidders.
23
The principal parties involved in the book building process are:

The Company
(1)
The Selling Shareholder
(2)
The Book Running Lead Managers (BRLMs)
(3)
The Syndicate Members, who are intermediaries registered with SEBI and
eligible to act as underwriters, appointed by the BRLMs.
(4)
The Registrar to the office.
UNDERPRICING
The pricing of an initial public offering (IPO) below its market value. When the
offer price is lower than the price of the first trade, the stock is considered to be
underpriced. A stock is usually only underpriced temporarily because the laws of supply
and demand will eventually drive it toward its intrinsic value.
Under pricing of issue represents the first day returns generated by the firm,
calculated as:

Offer price
An issue is under (over) priced if the price received by the issuer in the primary
market is lower (higher) than the price of the same securities in the secondary market.
It is believed that IPOs are often underpriced because of concerns relating to
liquidity and uncertainty about the level at which the stock will trade. The less liquid and
less predictable the shares are, the more underpriced they will have to be in order to
compensate investors for the risk they are taking. Because an IPO's issuer tends to know
24
more about the value of the shares than the investor, a company must under price its stock
to encourage investors to participate in the IPO.
PROCEDURE TO INVEST IN PRIMARY MARKET

a. The pre-requisites:
(i) The investor need to have Permanent Account Number (PAN) issued by the Income
Tax Department and quote the same in the application form. However, the investors are
not required to attach photocopy of PAN along with the application form.
(ii) The investor need to have a Bank account.
(iii) Shares or debentures allotted in a public issue will be credited to the investors
account in electronic form. For this the investor need to have a demat account and the
investor need to fill up the correct 16 digit demat account number in the application form.
Procedure to obtain prerequisites
(i) Obtaining PAN: The website of Tax Information Network of Income Tax Department
provides on-line application for PAN.
The investor can submit his application and make payment on line or off line and forward
physically copies of the required documents [proof of identity, proof of residence,
photograph and demand draft (if the payment is off line)] to the address mentioned
therein.
(ii) Opening Demat account: Just as money is kept in bank account, shares and
debentures can be kept in electronic form in a demat account by an entity called
Depository. For opening a demat account, the investor has to approach a Depository
Participant (DP), an agent of Depository, and fill up an account opening form.
Along with the account opening form, the investor must enclose the any one of
the following document for proof of identity and proof of address as under.
1. Passport
2. Voter ID Card
25
3. Driving license
4. Identity card / document with applicants Photo, issued by Central / State
Government
5. PAN card with photograph Bank Passbook
6. Ration Card
7. Self-declaration by High Court and Supreme Court judges, giving the new
address in respect of their own accounts
8. Verified copies of
a) Electricity bills (not more than 2 months old)
b) Residence Telephone bills (not more than 2 months old) and
c) Lease and License agreement / Agreement for sale
The investor has to produce the original documents, including PAN card, for
verification by the DP at the time of account opening.
The investor will have to enter into an agreement with DP in the standard format,
which gives details of rights and duties of investor and DP. The investors are entitled to
receive a copy of the agreement and schedule of charges for future reference.
The DP will open then account and give the investor a 16 digit demat account
number (8 digits DP ID and 8 digits Client ID). All purchase / investment in securities
will be added (credited) to this account. Upon sale of securities, the demat account will
be reduced (debited).
The investor should remember to update its bank account number, postal address etc.
of the demat account, as investor will receive refund credits / cheques of public issues as
per the details mentioned in the demat account
b. Getting the offer document
The offer documents of public issues are available on the websites of merchant
banker and stock exchange. It is also available in the website of SEBI under Offer
Documents section.
The investor can obtain hard copy of the offer document from SEBI upon payment of
`100 through Demand Draft made in favor of Securities & Exchange Board of India or
obtain it from the issuer company at its registered office or from the merchant banker.
26
The abridged prospectus contains all the salient features of the offer document and
is available along with the issue application form.
c. Getting the application form
Application forms are available with stock brokers (syndicate members), collection
centers, Registrar to the issue (RTI) and with the bankers to the issue.
ASBA (APPLICATION SUPPORTED BY BLOCKED AMOUNT) THE

SMART CHOICE:
ASBA is an application containing an authorization to block the application
money in the bank account, for subscribing to an equity issue.
ASBA (Application Supported by Blocked Amount) application forms are
available with designated branches of the Self Certified Syndicate Bank (SCSB), stock
brokers (syndicate members) or from the website(s) of Stock Exchange(s).
The investor can avail ASBA facility for making payment in a public issue instead
of making payment through cheque. For this the investors have to submit the simple
ASBA application form to the designated bank branch (Self Certified Syndicate Bank,
SCSB).
If the investor has, say, ` 30,000 in the savings bank account and if the investor
applies through ASBA for shares worth say, ` 20,000, then ` 20,000 will be blocked in
the investor account till allotment of shares. If the investor is allotted, say, shares worth
18,000, then an amount of 18,000 is debited from bank account and transferred to the
issuer company and the balance of 2,000 is unblocked. While all the time the entire
amount of ` 30,000 is in your bank account, earning interest. The shares allotted to are
credited into the demat account within 12 days of the close of the issue. ASBA forms will
be treated similar to the nonASBA forms while finalizing the basis of allotment
27
In case there are any complaints regarding ASBA applications, investors may
approach the concerned SCSB who is required to reply within 15 days. In case, investor
is not satisfied, he may write to SEBI.
d. Procedure to fill the application form
(i) General:
You can make up to 3 bids in the same application form in book built issues.
Alternatively, you can choose to bid at the cut off option, if your investment amount is
less than ` 200,000. Above that amount, you will not be treated as a retail investor and
you will be in the category of non institutional investor. However, you can submit
only one application per issue.
Fill the application in BLOCK LETTERS in English and give the following details:
1. Status of applicant: (Individual / HUF)
2. Name of the applicant(s)
3. Age of the bidder (in case of joint holders, age of first applicant)
4. Depository Participant Name
5. DP ID
6. Category of Investor: (Retail)
7.
Payment details: (Cheque / DD Number, Bank Name) Bank account number
8. Check Refund Option, if covered under 68 centers* prescribed by RBI and IFSC
code of Bank Signing the undertaking authorizing to mark a lien of funds by the
bank
9. PAN Number
10. Signature of applicant
11. Signature of Bank account holder, if different from applicant
Fill the form legibly without any crossing, corrections and over writing. Please
strike off the non applicable fields in the application form. Always mention the
application form number on the reverse of the draft / cheque.
Remember to update your bank account number, postal address etc. mentioned in
your demat account as you will receive refund credits / cheques as per the details
mentioned in your demat account.
28
(ii) ASBA (Application Supported by Blocked Amount) application form:

You can avail ASBA facility even if you do not hold account with SCSB. For this your
ASBA application has to be signed by the account holder.
(iii) If you have bank account with SCSB, you can apply online if the bank offers internet
banking facility.
Grounds for rejections: (even after filling all the above fields)
Applications made by partnership firms, minors

Payment made by postal order / money order / cash / stock invest
Bids made below minimum lot or not in multiples of lot prescribed in the offer
document
When there is a difference in the Names of the holder(s), DP ID, Client ID
provided in the application and details available with Depository

Multiple applications
Names of the joint holders are not in the same order as details available with
Depository
Inactive demat account
Applications, which do not bear stamp of the syndicate member (incase of normal
application)
Inadequate funds in the bank account
Outstation Cheques / Drafts drawn on the banks not participating in the clearing
process
e. Submitting the application form

The application form and the offer document have the full contact details of where you
can submit the filled up forms.
Ensure that you submit the application well within the closing date and time specified.
(i) Submit the ASBA application forms to the designate branch of the SCSB/ Syndicate
member and collect Transaction Registration Slip (TRS) / acknowledgement.
(ii) Submit non ASBA application forms to the stock broker (syndicate member) along
with a cheque for the payment and obtain acknowledgement (date stamping on the
counterfoil).
29
(iii) Retain the acknowledgement till allotment / refund is complete as it is crucial

evidence in case of any complaint.
f. Checking the demand for the book built issue at any point of time
The status of bidding in a book built issue is available on the website(s) of stock
exchange(s) on a consolidated basis. The data is also available investor category wise.
g. Revision of bids
You can revise both the price and the quantity of your bid(s) within the price band, till the
issue closing date. For this use the revision form available along with the application
form and submit it to the same broker / SCSB. Remember to collect the revised TRS.
h. Withdrawal of Bids
You can withdraw your bid till the closure of the issue by approaching syndicate member/
SCSB.
After closure of the issue, you can withdraw your bid till the finalization of the basis of
allotment by making a written application to the RTI.
i. Allotment of shares
Shares will be allotted to you and credited to your demat account within 12 days of the
close of the issue. In the case of bonds/ debentures, the timeline for allotment is 30 days
of the close of the issue.
j. Refund of money
(i) If you have applied through ASBA, the money in your bank account is blocked to the
extent of your proposed investment and it continues to remain there, earning interest.
Upon allotment, value of the shares allotted to you is debited from your bank account. In
case of partial allotment the balance amount gets unblocked and there is no refund. The
RTI issues instruction for debit or unblocking of your account within 12 days of the close
of the issue.
(ii) In case of application through cheque / demand draft, the refund would be through
30
1. Electronic mode:
i. Direct credit to your bank account, if you have bank account with the refund banker(s)
ii. through ECS (Electronic Clearing Service), if you have account in one of the centers
specified by RBI. The list of such centers is available in the in the offer document and
RBI web site
(http://rbidocs.rbi.org.in/rdocs/ECS/PDFs/I87908.pdf)
iii. You will receive intimation from the RTI about the credit
2. Physical refund warrants / cheques:
i. through under certificate of posting (UCP) if the refund amount is up to 1,500.
ii. through speed post / registered post, if the refund amount is above 1,500.
(iii) The RTI issues instruction for electronic credit and sends you intimation of the same
within 12 days of the close of the issue. The RTI dispatches the refund cheques within 12
days of the close of the issue. To receive refund, you are required to ensure that you bank
details including MICR code (a 9 digit code which appears in the cheque leaf) is
maintained and updated with the DP along with your postal address.
k. Interest for delay in allotment / refund
You are eligible to receive interest @ 15% p.a. upon delay in allotment / refund beyond
the prescribed period.
l. Any other requirement
Peruse the post issue advertisements issued by the company for the issue price and the
basis of allotment.
m. Listing of the shares
Equity shares are listed on the stock exchange for trading within 12 days of closure of the
issue.
n. Grievance redressal (non receipt of shares, delay in refund etc.)
In case of any grievance in a public issue, you can approach the compliance officer of the
issuer, whose name and contact details are mentioned on the cover page of the Offer
Document.
31
SEBI also facilitates redressal of investors grievances. Accordingly, you can also address
your complaints to SEBI through
E-mail (investorcomplaints@sebi.gov.in).
Visit SEBI Office (s)
Letter to SEBI
Lodge online complaint at the web link given below
http://investor.sebi.gov.in/complaints%20form/lodge%20index.htm
2014-2015 BOOK BUILDING ISSUES
Scrip Name
Start Date
End Date
Sharda Cropchem Limited
05-09-2014
09-09-2014
Shemaroo Entertainment Limited
16-09-2014
18-09-2014
Monte Carlo Fashions Limited
03-12-2014
05-12-2014
Ortel Communications Limited
03-03-2015
05-03-2015
Adlabs Entertainment Limited
10-03-2015
17-03-2015
Inox Wind Limited
18-03-2015
20-03-2015
Offer
Price
Rs. 145156
Rs.155170
Rs. 630645
Rs.180200
Rs.180215
Rs. 315325
Face
Value
Face
Value
10
10
10
10
10
10
Table 1: Book Building Issue Companies
2014-2015 FIXED PRICE ISSUES

Scrip Name
Start Date
End Date
Offer
Price
Raghuvansh Agrofarms Limited
09-01-2015
13-01-2015
Rs. 11
10
Karnavati Finance Limited
19-01-2015
21-01-2015
Rs. 10
10
Akme Star Housing Limited
25-02-2015
05-03-2015
Rs. 30
10
Mahabir Metallex Limited
09-03-2015
12-03-2015
Rs. 10
10
32
AGI Infra Limited
10-03-2015
13-03-2015
Rs. 54
10
SSPN Finance Limited
10-03-2015
12-03-2015
Rs. 20
10
Table 2: Fixed Price Issue Companies
BOOK BUILDING ISSUES
Sharda Cropchem Limited
IPO :
Incorporated in 2004, Sharda Cropchem Ltd is a crop protection chemical

company engaged in the marketing and distribution of a wide range of formulations and
generic active ingredients globally. They are also involved in order based procurement
and supply of Belts, general, chemicals, dyes and dye intermediates. Over the years the
company has primarily, grown organically and its core strength lies in identifying generic
molecules, preparing dossiers, seeking registrations, marketing and distributing
formulations or generic active ingredients in fungicide, herbicide and insecticide
segments.
Company Promoters:
The promoters of the company are:
1. Ramprakash V. Bubna
2. Sharda R. Bubna
3. Ashish R. Bubna
4. Manish R. Bubna
Objects of the Issue:

The objects of the Offer are to:
1. Achieve the benefits of listing the Equity Shares on the BSE and the NSE and
33
2. To carry out the sale of 22,555,124 Equity Shares by the Selling Shareholders
Issue Detail:
Issue Open: Sep 5, 2014 - Sep 9, 2014
Issue Type: 100% Book Built Issue IPO
Issue Size: 22,555,124 Equity Shares of Rs. 10
Issue Size: Rs. 351.86 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 145 - Rs. 156 Per Equity Share
Market Lot: 90 Shares
Minimum Order Quantity: 90 Shares
Listing At: BSE, NSE
Issue Subscription Detail / Current Bidding Status:

Number of Times Issue is Subscribed (BSE + NSE)
Non
Qualified
Institutional
Institutional
Investors
Buyers (QIBs)
(NIIs)
As on Date & Time

Shares Offered / Reserved
Day 1 Sept 5, 2014
17:00 IST
Day 2 Sept 8, 2014
17:00 IST
Day 3 Sept 9, 2014
17:00 IST
Retail
Individual
Investors
(RIIs)
Total
7,894,461
3,383,269
7,894,294
19,172,024
0.0400
0.0100
0.2200
0.1100
1.7200
1.2700
1.7900
1.6700
32.0600
251.3500
5.8500
59.9700
Table 1.1 (a): Issue Subscription status of Sharda Cropchem Limited
Return in (%)
Issue In
BSE
NSE
Offer Price(Rs)
Closing Price (Rs)

102
156
156
315.25
313.85
34
101
Table 1.1(b): Performance of Sharda Cropchem Limited
Figure 1.1 Performance of Sharda Cropchem Limited
INTERPRETATION:
The Sharda cropchem limited IPO had good response from Non-Institutional
investors(NIIs) 251.35 times & Qualified Institutional Buyers (QIBs) 32.06 times
But poor response Retail Individual Investors (RIIs) from 5.85 times
However the company had given around of 102% both in BSE and NSE return till
30/04/2015 from its issue price of Rs 156.
Shemaroo Entertainment Limited
IPO:
Incorporated in 1962, Shemaroo Entertainment Ltd is Mumbai based integrated

media content house with activities across content acquisition, value addition to content
and content distribution.
Shemaroo distribute entertainment content through television such as satellite,
terrestrial and cable television; mobile, internet, direct to home and other ways.
Shemaroo is also an official channel partner for Google and managing 32 channels.
Company Promoters:
35

1. Mr. Raman Maroo; and
2. Mr. Atul Maru;

The objects of the Issue are to:
1. Fund working capital requirements; and
2. Fund expenditure for general corporate purposes.
Issue Detail:
Issue Open: Sep 16, 2014 - Sep 18, 2014

As on Date & Time

Shares Offered /
Reserved
Day 1 Sept 16, 2014
17:00 IST
Day 2 Sept 17, 2014
17:00 IST
Qualified
Institutional
Buyers (QIBs)
Non
Institutional
Investors
(NIIs)
Retail
Individual
Investors
(RIIs)
Total
1,548,360
1,161,270
3,010,700
5,720,330
0.0000
0.0100
0.5300
0.2800
0.2300
0.0600
1.7700
1.0100
36
Day 3 Sept 18, 2014

21:30 IST
5.6900
8.6400
7.7900
7.3900
Table 1.2 (a): Issue Subscription status of Shemaroo Entertainment Limited

Return in (%)
Issue In
BSE
NSE
Offer Price(Rs)
Closing Price (Rs)
153
153
203.90
203.80
33.26
33.20
Table 1.2 (b): Performance of Shemaroo Entertainment Limited
Figure 1.2 Performance of Shemaroo Entertainment Limited
INTERPRETATION:
The Shemaroo Entertainment limited IPO had good response from NonInstitutional investors(NIIs) 8.64 times & Retail Individual Investors (RIIs) 7.79
times
But poor response Qualified Institutional Buyers (QIBs) from 5.69 times
However the company had given around 33% of returns in both BSE and NSE till
Monte Carlo Fashions Limited
37
IPO:
Incorporated in 1984, Monte Carlo Fashions Limited is the leading apparel brand
in India; especially famous for exclusive woolen brand 'Monte Carlo'.
Company cater to the premium and mid-premium branded apparel segment for
men, women and kids, offering a comprehensive line of woolen, cotton and cottonblended knitted and woven apparel and home furnishings through our 'Monte Carlo
Exclusive Brand Outlets' and multi brand outlets, including a network of national chain
stores under the 'Monte Carlo' brand.
Monte Carlo has 190 Monte Carlo Brand Outlets in India; out of which 80 are
owned by the company and the rest are franchisees. Monte Carlo operates 2
manufacturing facilities in Ludhiana, one for our woolen apparel products and one for our
cotton apparel products.
Company Promoters:
The Promoters of the Company are:
Individual Promoter:
1. Mr. Jawahar Lal Oswal
2. Mr. Kamal Oswal
3. Mr. Dinesh Oswal
4. Ms. Monica Oswal
5. Ms. Ruchika Oswal
Corporate Promoters:
6. SMCL
7. SSCL

The objects of the IPO are:
1. To achieve the benefits of listing the equity shares on the stock exchanges and
38
2. To sale of 5,433,016 Equity Shares by the Selling Shareholders.
Issue Detail:
Issue Open: Dec 3, 2014 - Dec 5, 2014

As on Date & Time

Shares Offered /
Reserved
Day 1 Dec 03, 2014
17:00 IST
Day 2 Dec 04, 2014
17:00 IST
Day 3 Dec 05, 2014
18:53 IST
Qualified
Institutional
Buyers (QIBs)
Non
Institutional
Investors
(NIIs)
Retail
Individual
Investors
(RIIs)
Total
1,086,603
814,953
1,901,700
3,803,112
0.7400
0.0300
0.7900
0.6100
1.7700
0.0700
2.3800
1.7100
13.9600
1.7100
6.9600
7.8300
Table 1.3(a): Issue Subscription status of Monte Carlo Fashions Limited

Issue In
Offer Price(Rs)
Closing Price (Rs)

39
Return in (%)
BSE
NSE
645
645
572.00
570.25
-11.31
-11.58
Table 1.3(b): Performance of Monte Carlo Fashions Limited
Figure 1.3 Performance of Monte Carlo Fashions Limited
INTERPRETATION:
The Monte Carlo Fashions limited IPO had good response from Qualified
Institutional Buyers (QIBs) 13.96 times & Retail Individual Investors (RIIs) 6.96
times
But poor response from Non-Institutional investors(NIIs) 1.71 times
However the company had given around 63% of returns in both BSE and NSE till
30/04/2015 from its issue price of Rs 350.43.
ORTEL Communications Limited
IPO:
Ortel Communications Ltd is a regional cable television and high speed

broadband services provider, mainly engaged in the distribution of analog and digital
cable television services, high speed broadband services & Voice over Internet Protocol
("VoIP") services. Company has well presence in the Indian states of Odisha,
40
Chhattisgarh, Andhra Pradesh and West Bengal. They have built a two-way
communication network for 'Triple Play' services (video, data and voice capabilities).
Ortel provides its services under the brand names "Ortel Home Cable", "Ortel Digital"
and "Ortel Broadband".
Company Promoters:
The following individuals are the Promoters of the Company:
1. Mr. Baijayant Panda; and
2. Ms. Jagi Mangat Panda

The object of the company is to:
1. Expansion of network for providing video, data and telephony services;
2. Capital expenditure on development of digital cable services;
3. Capital expenditure on development of broadband services; and
4. General corporate purposes.
Issue Detail:
Issue Open: Mar 3, 2015 - Mar 5, 2015
41

As on Date & Time

Day 1 Mar 03, 2015
17:00 IST
Day 2 Mar 04, 2015
17:00 IST
Day 3 Mar 05, 2015
18:15 IST
Qualified
Institutional
Buyers (QIBs)
6,442,575
Non
Institutional
Investors
(NIIs)
1,800,000
Retail
Individual
Investors
(RIIs)
1,200,000
Total
9,442,575
0.2100
0.0000
0.0300
0.1500
0.4200
0.0000
0.0900
0.3000
1.0047
0.0903
0.3908
0.7575
Table 1.4(a): Issue Subscription status of Ortel Communications Limited

Return in (%)
Issue In
BSE
NSE
Offer Price(Rs)
Closing Price (Rs)
181
181
165.60
171.20
-8.50
-5.41
Table 1.4(b): Performance of Ortel Communications Limited
42
Figure 1.4 Performance of Ortel Communication Limited
INTERPRETATION:
The Ortel Communications limited IPO had good response from Qualified
times
However the company had given around -8.5% in BSE and -5.4% in BSE of
returns till 30/04/2015 from its issue price of Rs 181.
ADLABS Entertainment Limited
IPO:
Adlabs Entertainment Limited is mainly engaged in the business of theme park

and entertainment industry. AEL own and operates Adlabs Imagica which is India's first
and only international standard theme park. It offers entertainment, dining, shopping and
accommodation under one roof.
The Theme Park is a part of Adlabs Mumbai, a 'one-stop' entertainment
destination that they offer at this location. Adlabs Mumbai also includes Aquamagica, a
water park, which became fully operational on October 1, 2014, and a family hotel,
43
Novotel Imagica Khopoli, the first phase of which is expected to be completed by March
2015.
Company Promoters:
The Promoters of the Company are:
1. Mr Manmohan Shetty
2. Thrill Park Ltd

The object of the issue is to:
1. Partial repayment or pre-payment of the Consortium Loan;
2. General corporate purposes; and
3. Receive the benefits of listing of the Equity Shares on the Stock Exchanges.
Issue Detail:

44
As on Date & Time

Day 1 Mar 10, 2015
17:00 IST
Day 2 Mar 11, 2015
17:00 IST
Day 3 Mar 12, 2015
17:00 IST
Day 4 Mar 13, 2015
17:00 IST
Day 5 Mar 16, 2015
17:00 IST
Day 6 Mar 17, 2015
17:30 IST
Qualified
Institutional
Buyers (QIBs)
12,522,536
Non
Institutional
Investors
(NIIs)
3,048,934
Retail
Individual
Investors
(RIIs)
2,032,622
Total
17,604,092
0.0000
0.0600
0.1500
0.0300
0.1800
0.0900
0.3500
0.1800
0.4000
0.4000
0.1100
0.1100
1.1000
1.1000
0.4400
0.4700
0.5300
0.3600
1.1100
0.6000
1.1700
0.4900
1.3700
1.1100
Table 1.5(a): Issue Subscription status of Adlabs Entertainment Limited

Return in (%)
Issue In
BSE
NSE
Offer Price(Rs)
Closing Price (Rs)
168
168
146.20
146.95
-12.9
-12.5
Table 1.5(b): Performance of Adlabs Entertainment Limited
Figure 1.5 Performance of Adlabs Entertainment Limited
45
INTERPRETATION:
The Adlabs Entertainment limited IPO had good response from Qualified
times
However the company had given around -13% of return in both BSE and NSE till
INOX WIND LIMITED
IPO:
Incorporated in April 2009; Inox Wind Limited is leading wind power solutions
provider in India. Inox manufactures wind turbine generators. Company also offer
services including wind resource assessment, site acquisition, infrastructure development,
erection and commissioning, and also long term operations and maintenance of wind
power projects. Company manufacture the components of wind turbine generators inhouse with a view to ensuring high quality, advanced technology and reliability and
maintaining cost competitiveness
Company Promoters:
The promoter of the company is Gujarat Fluorochemicals Limited (GFL); India's
largest producer of refrigerants and polytetrafluoroethylene, a synthetic flouropolymer in
India. GFL holds 75% of the pre-issue issued. GFL is a listed in BSE and NSE.

The objects of the fresh issue are:
1. Expansion and up gradation of existing manufacturing facilities;
2. Long term working capital requirements;
46
3. Investment in our Subsidiary, IWISL, for the purpose of development of power

evacuation infrastructure and other infrastructure development; and
Issue Detail:
Issue Size: Equity Shares of Rs. 10

As on Date & Time

Day 1 Mar 18, 2015 17:00
IST
Day 2 Mar 19, 2015 17:00
IST
Day 3 Mar 20, 2015 19:48
IST
Qualified
Institutional
Buyers (QIBs)
6,637,826
Non
Institutional
Investors
(NIIs)
4,818,989
Retail
Individual
Investors
(RIIs)
11,244,306
Total
23,201,121
0.0000
0.0400
0.1600
0.0900
0.5500
0.3000
0.0100
0.5900
35.6800
35.3800
0.1200
18.6000
Table 1.6(a): Issue Subscription status of Inox Wind Limited

Return in (%)
Issue In
BSE
NSE
Offer Price(Rs)
Closing Price (Rs)
310
310
422.80
423.15
Table 1.6(b): Performance of Inox Wind Limited
47
36.38
36.50
Figure 1.6 Performance of Inox Wind Limited
INTERPRETATION:
The Inox Wind limited IPO had good response from Qualified Institutional
Buyers (QIBs) 35.68 times & Non-Institutional investors(NIIs) 35.38 times

But poor response from Retail Individual Investors (RIIs) 0.12 times
However the company had given around 36% of return in both NSE and BSE till
OVERALL BOOK BUILDING ISSUES PERFORMANCE
IPO Name
Sharda Cropchem
Limited
Shemaroo
Entertainment
Limited
Monte Carlo
Fashions Limited
Ortel
Communications
Limited
Offer
Price(Rs)
156
153
645
181
Closing
Price in
BSE (Rs)
Closing
Price in
NSE (Rs)
315.25
313.85
203.90
203.80
33.26
33.20
572.00
570.25
-11.31
-11.58
165.60
171.30
-8.50
-5.41
48
Return in
BSE (%)
102
Return in
NSE
(%)
101
Adlabs
Entertainment
Limited
168
Inox Wind Limited
310
146.20
146.95
-12.9
-12.5
422.80
423.15
36.38
36.50
Table 1.7: Overall Book Building Issues Performance
Figure 1.7 Overall Book Building Issues Performance
INTERPRETATION:
As shown in above 6 Book Building Issuing Companies, we can observe that 3
companies are showing good response of positive returns and remaining 3 companies are
49
showing negative returns. But overall we can interpret that positive returns can be
observed in the Book Building issues.
FIXED PRICE ISSUES
Raghuvansh Agro farms Limited
IPO :
Incorporated in 2013, Raghuvansh Agrofarms Ltd is engaged in cultivation of

Organic Vegetables, Organic Grains and Cereals. They have an integrated facility for
cultivation, processing and distribution of agricultural produce. Company is also in the
business of dairy farming and production and distribution of dairy products.
RAL owns cultivable lands and cattle stock, have consultancy liaisons with
researchers, and possess vast experience in Indian business environment. The company
offer financial, technical, strategic assistance in the agricultural and dairy business areas
to establish profitable enterprises.
Company Promoters:
The following are the promoters of the Company:
1. Mr. Subodh Agarwal,
2. Litmus Investments Ltd; and
3. Model Kings Safety wear Ltd

The objects of the issue are to:
1. Construction of 1000 M3 capacity of Bio-Gas Plant for Power Generation;
2. Investment in subsidiary companies, Sanjeevani Fertilizers and Chemicals Private
Ltd and Kanpur Organics Private Ltd; and
3. To raise funds for General Corporate Purposes.
Issue Detail:
50
Issue Open: Jan 9, 2015 - Jan 13, 2015

Issue Type: Fixed Price Issue IPO
Issue Price: Rs. 11 Per Equity Share
Listing At: BSE SME
Performance of Raghuvansh Agrofarms Limited Listing Day Trading Information

BSE SME
Issue Price:
Rs. 11.00
Open:
Rs. 12.12
Low:
Rs. 12.12
High:
Rs. 12.12
Last Trade:
Rs. 12.12
Volume:
10,000
Price on 30/04/2015
Rs. 34.10
Table 2.1(a): Trading Information of Raghuvansh Agro farms limited

Issue In
BSE
Offer Price(Rs)
11
Closing Price (Rs)
34.10
Return
23.10
Table 2.1(b): Performance of Raghuvansh Agro farms Limited
51
Figure 2.1 Performance of Raghuvansh Agro farms Limited
INTERPRETATION:
The Raghuvansh Agro Farm Limited had shown much fluctuation in its
price. Its issue price is Rs.11.00 and the last traded price as on 30/04/2015 is Rs. 34.10.
The stock had less volume only 10,000. The stock was in profit of Rs.23.10 as on
30/04/2015.
KARNAVATI FINANCE LIMITED
IPO:
Incorporated in 1989, Karnavati Finance Ltd is a Non Deposit taking Loan

Company (NBFC-ND-LC) engaged in the business of providing loans as per the
requirement of customers and they are both secured and unsecured finance. That is
mainly involved in business loan and personal loan.
Company Promoters:
1. Mr. Raman Morzaria
2. Mr. Jay Morzaria

52
The objects of this Issue are to raise funds to:
1. To augment capital base and provide fund requirements for increasing operational
scale with respect to NBFC activities/Financing Operations;
2. Public Issue expenses.
Issue Detail:
Issue Open: Jan 19, 2015 - Jan 21, 2015
Listing At: BSE SME
Performance of Karnavati Finance Limited Listing Day Trading Information
BSE SME
Issue Price:
Rs. 10.00
Open:
Rs. 10.60
Low:
Rs. 10.60
High:
Rs. 10.55
Last Trade:
Rs. 10.60
Volume:
80,000
Price as on 30/04/2015
Rs.10.52
Table 2.2(a): Trading Information of Karnavati Finance Limited

Issue In
BSE
Offer Price(Rs)
10
Closing Price (Rs)
10.52
Return
0.52
Table 2.2(b): Performance of Karnavati Finance Limited
53
Figure 2.2: Performance of Karnavati Finance Limited
INTERPRETATION
The Karnavati Finance Ltd had not shown much fluctuation in its price. Its issue
price is Rs.10.00 and the last traded price as on 30/04/2015 is Rs. 10.52. The stock had
volume 80,000. The stock was in profit of Rs.0.52 as on 30/04/2015.
Akme Star Housing Finance Limited

IPO:
Incorporated in 2005, Akme Star Housing Finance Ltd is registered with National
Housing Bank (NHB) and mainly engaged in the business of housing finance. Company
provides home loans finance to weaker sections of the society, group housing societies
and NGOs engaged in the welfare of the weaker section which includes housing loans,
construction loans, and loan against home properties. Akme Star Housing Finance
Limited is a part of AKME Group.
Company Promoters:
1. Mr. Mohan Lal Nagda

2. Mr. Nirmal Kumar Jain
54
3. Mr. Kalu Lal Jain

4. Mr. Anil Kumar Jain
5. Mrs. Abhilasha Jain

The objects of the Issue are to:
1. Augmentation of capital base and meeting fund requirements for increasing
operation scales;
2. General Corporate Purposes and
3. Issue Expenses.
Issue Detail:
Issue Open: Feb 25, 2015 - Mar 5, 2015
Listing At: BSE SME
Performance of Akme Star Housing Finance Limited Listing Day Trading
Information
BSE SME
Rs. 30.00
Rs. 32.00
Rs. 32.00
Rs. 31.50
Rs. 31.75
Issue Price:
Open:
Low:
High:
Last Trade:
55
Volume:
64,000
Rs.31.50
Table 2.3(a): Trading Information of Akme Star Housing Finance Limited

Issue In
BSE
Offer Price(Rs)
30
Closing Price (Rs)
31.50
Return
1.50
Table 2.3(b): Performance of Akme Star Housing Finance Limited
Figure 2.3: Performance of Akme Star Housing Finance Limited
INTERPRETATION
Akme Star Housing Finance Limited had positive fluctuations. It had a profit of
Rs.1.50 as on 30/04/2015. Its issue price is Rs.30.00 and last traded price was as on
30/04/2015 Rs.31.50.
MAHABIR METALLEX LIMITED
IPO:
Incorporated in 2003, Mahabir Metallex Ltd is engaged in the business of trading

and distribution of steel products like TMT Bars, Rolled Products, Billets, Color Coated
56
Sheets, Steel strips/ Cold Rolled Strips, Round Angle Channels& Bars, Ingots and Steel
Pipes and Tubes.
Company buy the material from various manufacturers and further sell and
distribute the material to various consumers like real estate developers, capital goods
manufacturers, scrap holding manufacturers etc on cash basis as well as on credit basis.
Companys product offerings includes ready to use steel, primarily re-bars to be used in
construction activities in various Sector like roads, power plants, housing, bridges,
metros, monorails etc.
Company Promoters:
1. Mrs. Anju Gupta
2. Mr. Manoj Gupta
The objects of the Issue are:
1. Long term working capital requirements and
2.
Issue expenses.
Issue Detail:
Listing At: BSE SME
57
Performance of Mahabir Metallex Limited Listing Day Trading Information

BSE SME
Issue Price:
Rs. 10.00
Open:
Rs. 10.30
Low:
Rs. 10.30
High:
Rs. 09.79
Last Trade:
Rs. 10.10
Volume:
1,90,000
Rs.12.40
Table 2.4(a): Trading Information of Mahabir Metallex Limited
Issue In
BSE
Offer Price(Rs)
10
Closing Price (Rs)
12.40
Return
2.40
Table 2.4(b): Performance of Mahabir Metallex Limited
Figure 2.4: Performance of Mahabir Metallex Limited
INTERPRETATION
58
Mahabir Metallex Limited had positive fluctuations. Its issue price is Rs.10.00
and last traded price was as on 30/04/2015 Rs.12.40. The stock had volume 1, 90,000.
The stock was in profit of Rs.2.40 as on 30/04/2015.
AGI INFRA LIMITED
IPO:
Incorporated in 2005, AGI Infra Ltd is an integrated construction and real estate
development company, primarily focusing on construction and development of
commercial / residential projects, in and around Punjab. The company has successfully
completed a Group Housing Project - "G. I. Apartments" comprising of 78 flats at the
Phagwara District, Kapurthala in 2009. In 2011, it launched flagship Group Housing
Project "Jalandhar Heights".
Company Promoters:
1. Mr. Sukhdev Singh and
2. Mrs. Salwinderjit Kaur

1. To part finance the construction of 215 Residential Flats in on-going Group
Housing Project "Jalandhar Heights" in Punjab;
2.
Repayment of Loans;
3. To meet Issue Expenses.
Issue Detail:
59

Listing At: BSE SME
Performance of Agri Infra Limited Listing Day Trading Information

BSE SME
Issue Price:
Rs. 54.00
Open:
Rs. 54.40
Low:
Rs. 54.75
High:
Rs. 54.05
Last Trade:
Rs. 54.65
Volume:
1,88,000
Rs.58.00
Table 2.5(a): Trading information of Agri Infra Limited
Issue In
BSE
Offer Price(Rs)
54
Closing Price (Rs)
58
Return
Table 2.5(b): Performance of Agri Infra Limited
60
Figure 2.5: Performance of Agri Infra Limited
INTERPRETATION
AGI Infra Limited had positive fluctuations. Its issue price is Rs.54.00 and last
traded price was as on 30/04/2015 Rs.58. The stock had volume 1, 88,000. The stock was
in profit of Rs.4 as on 30/04/2015.
SSPN FINANCE LIMITED
IPO:
Incorporated in 2012, SSPN Finance is a financial services company offers

corporate and financial advisory services which include Project Advisory, Loan
Syndication, Mergers & Acquisitions and Private Equity. The Corporate Advisory
services clients ranging from medium-sized corporate, SMEs and family managed
businesses. They are also engaged in making investment in the form of Debt & Equity in
various companies.
Company Promoters:
The Promoters of the company are:
Individual Promoter:
1. Mr. Chandu K. Jain
61
2. Mr. Keshrimal B. Jain

HUF:
3. Chandu K Jain HUF
1. Augmenting long term working capital;
2. Meeting public issue expenses.
Issue Detail:
Issue Size: 750,000 Equity Shares of Rs. 10
Listing At: BSE SME
Performance of SSPN Finance Limited Listing Day Trading Information

BSE SME
Issue Price:
Rs. 20.00
Open:
Rs. 15.00
Low:
Rs. 15.00
High:
Rs. 14.25
Last Trade:
Rs. 14.40
Volume:
1,92,000
62
Rs.15.00
Table 2.6(a): Trading Information of SSPN Finance Limited

Issue In
BSE
Offer Price(Rs)
20
Closing Price (Rs)
15
Return
-5
Table 2.6(b): Performance of SSPN Finance Limited
Figure 2.6: Performance of SSPN Finance Limited
INTERPRETATION:
The SSPN Finance Ltd had poor response in its price. Its issue price is Rs.20.00
and the last traded price as on 30/04/2015 is Rs. 15. The stock had volume
1,92,000. The stock moved around Rs.15.00 as on 30/04/2015.
OVERALL FIXED PRICE ISSUES PERFORMANCE
IPO Name
Raghuvansh Agrofarms Limited
Karnavati Finance Limited
Offer
Price(Rs)
11
10
63
Closing Price in
BSE (Rs)
Return in BSE
(%)
34.10
23.10
10.52
0.52
Akme Star Housing Limited
30
Mahabir Metallex Limited
10
AGI Infra Limited
54
SSPN Finance Limited
20
31.50
1.50
12.40
2.40
58.00
15.00
-5
Table 2.7: Overall Fixed Price Issues Performance
Figure 2.7: Overall Fixed Price Issues Performance
INTERPRETATION:
As shown in above 6 Fixed Price Issuing Companies, we can observe that 5
companies are showing good response of positive returns and remaining 1 company is
showing negative returns. But overall we can interpret that majority of positive returns
can be observed in the Fixed Price issues.
FINAL INTERPRETATION
From the above data analysis we can interpret that the primary market issues are
one of the important source of raising finance for the companies as well as it is the
market where one can buy stocks directly from a company.
In the years 2014 - 2015 from September, 2014 to till April, 2015 there are 12
Primary Market Issues out of which 6 are Book Building Issues and 6 are Fixed Price
64
Issues. From the 12 issues 8 issues have given positive returns till the ending of April
2015 and 4 Issues have shown poor response.
But comparing to the both Book building issuing companies and Fixed price
Issuing Companies, the Fixed Price issuing companies are showing more positive returns
compared to the Book building issues. The same is shown in the table below.
Company
Sharda Cropchem
Limited
Shemaroo
Entertainment
Limited
Monte Carlo
Fashions Limited
Issue
Type
Issue
Size
(Rs.
Cr.)
Open
Date
IPO-BB
351.86
05-Sept14
Close
Date
09Sept14
16-Sept14
03-Dec14
18Sept14
05Dec-14
IPO-BB
120.00
IPO-BB
350.43
65
Offer
Price
(Rs.)
(BSE) LTP
as on
30/04/2015
(NSE) LTP
as on
30/04/2015
145156
315.25
313.85
155170
630645
203.90
203.80
572.00
570.25
Ortel
Communications
Limited
Adlabs
Entertainment
Limited
Inox Wind Limited
Raghuvansh
Agrofarms Limited
Karnavati Finance
Limited
Akme Star Housing
Limited
Mahabir Metallex
Limited
AGI Infra Limited
SSPN Finance
Limited
03-Mar15
05Mar-15
180200
165.60
171.30
10-Mar15
18-Mar15
09-Jan15
17Mar-15
20Mar-15
13-Jan15
180215
315325
146.20
146.95
422.80
423.15
34.10
2.58
19-Jan15
19-Jan15
10.52
4.80
25-Feb15
09-Mar15
10-Mar15
10-Mar15
05Feb-15
12Mar-15
13Mar-15
12Mar-15
31.50
12.40
58.00
15.00
IPO-BB
217.20
IPO-BB
341.48
IPO-BB
700.00
IPO-FP
IPO-FP
IPO-FP
IPO-FP
IPO-FP
IPO-FP
3.96
3.90
14.99
1.50
11
10
30
10
54
20
Table 3.1: Interpretation on the Trading of the companies
If we compare the book building Issuing companies and fixed price Issuing Companies
returns the following can be observed
Book Building IPO

Name
Sharda Cropchem
Limited
Return
in BSE
(%)
102
Return in
NSE
(%)
101
66
Fixed Price IPO

Name
Raghuvansh
Agrofarms
Return in
BSE (%)
23.10
Limited
Shemaroo
Entertainment Limited
Monte Carlo Fashions
Limited
Ortel Communications
Limited
Adlabs Entertainment
Limited
Inox Wind Limited
TOTAL
33.26
-11.31
-8.50
-12.9
36.38
33.20
Karnavati
Finance Limited
0.52
-11.58
Akme Star
Housing Limited
1.50
-5.41
Mahabir Metallex
Limited
2.40
-12.5
AGI Infra Limited
36.50
SSPN Finance
Limited
-5
3 positive Returns
5 Positive
returns
Table 3.2: Comparison of Book building and Fixed Price Issues
FINDINGS:
From the above project we can find that the primary market is also an important
source of Investment for investors and it is the main source of raising funds for the
Companies. However in order to invest in the market one needs to comply with some
norms such as Demat account opening, to have a Bank account, to have a Pan Card etc.
On the other hand the companies have to comply with the SEBI (Securities & Exchange
Board of India) rules and regulations.
Primary Market Issues pricing can be either in Book Building form or of Fixed
Price method. Irrespective of the method of pricing we can see that Primary Market
67
Issues have given good listing gains when compared to the orthodox style of investments.
But we can find by the analysis that Fixed Price Issues are showing more positive results.
SUGGESTIONS:
The following are some of the suggestions in order to improve the primary market in
India:
One of the most important suggestions is to bring awareness among people about
the Primary Market.

To have lesser rules & documentation for applying to an issue like requirements
to open a demat account.

Lesser regulations for the companies coming out with the primary market issues
Online IPO application facilities to Investors.
To increase number of banks having ASBA facility.
To get the securities listed in short duration in the secondary market after the
Primary Issue.
To increase the investors protection.
To increase the liquidity and trading volume for illiquid primary issue companies.
CONCLUSION:
Primary Market is the most important market for the development of any
economy. As to develop an economy needs companies to prosper and companies in order
to prosper require huge funds which they can raise only in the primary market. Even for
an Investor in order to increase his return on investments he needs to park his funds in the
Primary market by which he not only shares the profits of the company but also becomes
one of the owner of the company.
If we can bring positive awareness among people about the importance of the
Primary Market it will help the retail investors as well as the economy to grow to a large
extent and in this primary market by investing in the fixed price Issue the Investors can
gain more returns.
68
BIBLIOGRAPHY
Web Based:
www.bseindia.com
www.nseindia.com
www.sebi.com
www.moneycontrol.com
www.economictimes.com
www.chittorgarh.com
www.bullishindia.com
69
www.wikipedia.com
www.investopedia.com
www.capitalmarket.com
www.ifinonline.com
www.scribd.com
www.bloomberg.com
Book Based:
Investment analysis & portfolio management Prasanna Chandra third
edition
Security analysis and portfolio Management Donaid E. Fischer and
Ronald J.Jordan
Financial Management I M Pandey
70

Brief Introduction: Market Refers To Open Market Operations in Highly Marketable Short-Term Debt Instruments

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BRIEF INTRODUCTION

Capital market is a market for securities which consists of two segments:

may be for setting up new projects, expansion, diversification, modernization of existing

ROLE OF PRIMARY MARKET

NEED FOR ISSUING SHARES BY COMPANIES TO PUBLIC

Figure 1: Classification of Issues

Initial Public Offering (IPO):

A Follow on Public Offering (Further Issue):

MEANING OF ISSUE PRICE

Difference between Public Issue and Private Placement or Preferential

NEED AND IMPORTANCE OF THE STUDY

MAJOR REFORMS OF PRIMARY MARKET

for a shorter time.

with the traditional method of investing in public floats.

transparency as it prevents issuers from attracting investors by way of displaying

inflated over-subscription numbers from institutional investors.

listing premium for retail investors.

prospects of the issuer.

OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

Formulae used for Book Building and Fixed Price:

Closing Price Offer price

For Fixed Price Issues:

Closing Price Offer price

P1 = Closing Price on the first day of trading.

For Fixed Price Issues:

Pt = Closing price at time t

LIMITATIONS OF THE STUDY

Indian Stock Exchange

Meaning of Stock Market or Stock Exchange

BOMBAY STOCK EXCHANGE (BSE)

NATIONAL STOCK EXCHANGE (NSE)

MCX Stock Exchange Limited (MCX-SX)

COMPANY PROFILE:IFCI Financial Services Ltd (IFIN)

was promoted in 1995, by IFCI

Ltd., to provide a wide range of

services to investors, institutional

and retail. IFIN is primarily

Investment Banking, Mutual

Fund Distribution & Advisory Services, Depository Participant Services, Insurance

IFCI Limited, Our legendary parent Institution

IFIN Management Team

Mr. Sujit K. Mandal.

Features of primary markets include:

The securities are issued by the company directly to the investors.

ventures/ business or for expanding or modernizing the existing business

FUNCTIONS OF PRIMARY MARKET

A careful study of the technical, economic and financial viability to ensure

Distribution is the function of sale of securities to ultimate inventors. This service

Benefits of Primary Market

company earns profit, dividend may be paid.

Investors are broadly categorized as:

PROCEDURE OF PRIMARY MARKET ISSUE:

(http://www.sebi.gov.in/PMDData.html). Company is also required to make a public

Opening of the Issue:

METHODS OF PRICING BY COMPANIES ISSUING SECURITIES

1. Fixed Price issues

1. FIXED PRICE METHOD

2. BOOK BUILDING METHOD

BOOK BUILDING PROCESS

The principal parties involved in the book building process are:

The Selling Shareholder