Final Ipo in India

Initial Public Offering In India
TABLE OF CONTENTS
Sr. No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.
Particulars
Executive Summary Financial markets and IPO Primary Market IPO- Features Trends Pricing Of Issue Book Building Cost Of Issue Brief Note on Intermediaries SEBI and IPO Marketing of IPO Analysis of Biocon IPO Prospectus TCS Conclusion Bibliography Annexure
Page No.
2 4 6 9 13 20 22 27 29 35 46 52 63 78 80 81
[Type text]
Page 1
EXECUTIVE SUMMARY
When a business entity needs money the general course of action that it follows is that it goes to the bank. However banks may not be ready to provide huge finance for a long time especially if the returns are not fixed. The best way to raise money is through offer of shares. The securities which the companies issue for the first time to the public and other financial institutions either after incorporation or on conversion from private to public company is called INITIAL PUBLIC OFFERING or IPO. Raising equity gives boost to economical development of the country. Raising money through IPO is a very complex process. It requires analysis and implementation of various commercial laws applicable to IPOProspectus. These laws are Companies Act, Income Tax Act, FEMA, Securities Contract Act and SEBI Guidelines on Disclosure and Investor Protection. It is also necessary to implement circulars from time to time by SEBI. The introduction of SEBI attracted Foreign Institutional Investors to invest money in stock market in India. It has also helped Indian Companies to offer securities in most scientific method to Indian and Foreign investors Therefore to understand this complex subject, I decided to undertake studies by this Project Report.
The basic objective of my study on IPO is mainly as underTo analyze and evaluate the complex IPO process. To study and incorporate the legal requirements of an IPO. SEBI Norms and Guidelines.
[Type text]
Page 2
Various aspects of IPO like cost, Involvement of intermediaries, pricing of an IPO. Pricing of an issue through the Book-Building Method. Analysis of the Biocon IPO is the heart of the project. I have included the prospectus of the latest IPO-TATA Consultancy Services in a compact form. I have given prospectus to explain applicability of various laws and guidelines.
The limitations with this report are as underI have excluded guidelines and procedures relating to ADR/GDR to raise money by issuing securities abroad. I have also excluded procedures relating to listing securities in Foreign Stock Exchange I have excluded provision relating to the stock invest option in the IPO-Application form. If the company is making IPO just to get securities listed on Stock Exchange and make disinvestment promoters, then the money will not come to company and pricing method followed will also be different. I have not covered how the IPO process is carried out in international markets.
[Type text]
Page 3
FINANCIAL MARKETS AND THE IPO

The Financial Market is an amorphous set of players who come together to trade in financial assets.
Financial Markets in any economic system that acts as a conduit between the organizations who need funds and the investors who wish to invest their money into profitable opportunity. Thus, it helps institutions and organizations that need money to have an access to it and on the other hand, it helps the public in general to earn savings.
Thus they perform the crucial function of bringing together the entries who are either financially scarce or who are financially slush. This helps generally in a smoother economic functioning in the sense that economic resources go to the actual productive purposes. In modern economic systems Stock Exchanges are the epicenter of the financial activities in any economy as this is the place where actual trading in securities takes place.
Modern day Stock Exchanges are most of the centers to trade in the existing financial assets. In this respect, they have come a long way in the sense that these days, they act as a platform to launch new securities as well as act as most authentic and real time indicator of the general economic sentiment.
The zone of activities in the capital market is dependent partly on the savings and investment in the economy and partly on the performance of the
[Type text]
Page 4
Industry and economy in general. In other words capital market constitutes the channel through which the capital resources generated in the society and made available for economic development of the nation.
As such, Financial Markets are functionally classified as having two parts, namely,
1. The Primary Market 2. The Secondary Market
Primary Market comprises of the new securities which are offered to the public by new companies. It is the mechanism through which the resources of the community are mobilized and invested in various types of industrial securities. Whenever a new company wants to enter the market it has to first enter the primary market.
Secondary Market comprises of further issues which are floated by the existing companies to enhance their liquidity position. Once the new issues are floated and subscribed by the public then these are traded in the secondary market. It provides easy liquidity, transferability and continuous price formation of securities to enable investors to buy and sell them with ease. The volume of activity in the Secondary Market is much higher compared to the Primary Market
[Type text]
Page 5
PRIMARY MARKET-GENESIS AND GROWTH

When a business entity needs money the general course of action that it follows is that it goes to the bank. However banks may not be ready to provide huge finance for a long time especially if the returns are not fixed. The best way to raise money is through offer of shares and for this: PRIMARY MARKET is the answer The Primary Market deals with the new securities which were previously not tradeable to the public. The main function is to facilitate the transfer of resources from savers to entrepreneurs seeking to establish or to expand and diversify existing events. The mobilization of funds through the Primary Market is adopted by the state government and corporate sector. In other words the Primary Market is an integral part of the capital market of a country and together with the securities market. The development of security as well as the scope for higher productive capacity and social welfare depends upon the efficiency of the Primary Market.
What is an IPO? The securities which the companies issue for the first time to the public either after incorporation or on conversion from private to public company is called INITIAL PUBLIC OFFERING or IPO
[Type text]
Page 6
GROWTH OF IPOs IN INDIA
HISTORY OF PRIMARY MARKET
Indian capital market was initiated with establishing the Bombay stock exchange in the year 1875. At that time the main function of stock exchange was to provide place for trading in the stocks. Now the exchange has completed more than 25 years. It has undergone several changes.
Initially the IPO was called New Issue and the issues in the Primary Market were controlled by CCI (Controller of capital issue). It was working as a department of MOF (ministry of finance). There were very few issues every year. CCI was highly conservative and hardly allowed any premium issues. Also, the regulatory framework was inadequate to control several issues relating to Primary Market. Therefore, in the year 1992 it was abolished.
There was no awareness of new issues among the investing public. In fact, during 1950s-1960s, the investment in stock market was considered to be gambling. It was prerogative to highly elite business community to participate in new issues. More than 99% of Indian population never participated in any issue during CCI regime.
There was tremendous growth in capital market in U.S.A. and Western Europe. In these markets they had established Security Exchange
[Type text] Page 7
Commission (SEC). It is most powerful autonomous body. The Government of India realized the importance of a similar body in India for healthy and fast growth of Capital Market. Thus Security Exchange Board of India (SEBI) was established with headquarters in Mumbai in 1992.SEBI is the most powerful body in India.
SEBI has come up with the guidelines for disclosures and investors protection. SEBI has framed rules for various intermediaries like Merchant Bankers, Underwriters, Brokers, Bankers, Registrars and Transfer Agents, Depositories, Stock Exchanges etc. These rules are on the line of similar rules in western world. This has attracted foreign institutional and individual investors to invest money in India. This has resulted in exponential growth of Capital Market in this last decade.
POPULARISING THE NEW ISSUE. Late Shri, Dhirubhai Ambani can be considered as Bhishmapita of new issues, though initially he also had to struggle to get subscribers but he always used innovative ides for marketing IPOs. It is said that investor never lost money in his pricing methods. There are several incidences of the common man participated in his issues, got allotment, sold shares and created fabulous wealth for themselves. As on 31-12-2003, Reliance Group has more than 3.5 million shareholders.
[Type text]
Page 8
The first public offer of securities by a company after its inception is known as Initial Public Offering (IPO). Going public (or participating in an initial public offering or IPO) is a process by which a business owned by one or several individuals is converted in to a business owned by many. It involves the offering of part ownership of the company to the public through the sale of equity securities (stock). IPO dilutes the ownership stake and diffuses corporate control as it provides ownership to investors in the form of equity shares. It can be used as exit strategy and finance strategy. As a financing strategy, its main purpose is to raise funds for the company. When used as an exit strategy, existing investors can offload equity holdings to the public.
REASONS FOR GOING PUBLIC To raise funds for financing capital expenditure needs like expansion diversification etc. To finance increased working capital requirement As an exit route for existing investors For debt financing.
[Type text]
Page 9
ADVANTAGES OF GOING PUBLIC y Stock holder Diversification As a company grows and becomes more valuable, its founders often have most of its wealth tied up in the company. By selling some of their stock in a public offering, the founders can diversify their holdings and thereby reduce somewhat the risk of their personal portfolios. y Easier to raise new capital If a privately held company wants to raise capital a sale of a new stock, it must either go to its existing shareholders or shop around for other investors. This can often be a difficult and sometimes impossible process. By going public it becomes easier to find new investors for the business. y Enhances liquidity The sock of a closely held firm is not liquid. If one of the holders wants to sell some of his shares, it is hard to find potential buyersespecially if the sum involved is large. Even if a buyer is located there is no establishes price at which to complete the transaction. These problems are easily overcome in a publicly owned company y Establishes value for the firm This can be very useful in attracting key employees with stock options because the underlying stock have a market value and a market for them to be traded that allows for liquidity for them. y Image The reputation and visibility of the company increases. It helps to increase company and personal prestige.
[Type text] Page 10
y Other advantages Additional incentive for employees in the form of the companies stocks. This also helps to attract potential employees. It commands better valuation of the company. Better situated for making acquisitions. Creditability and image enhancement for the company.
DISADVANTAGES OF GOING PUBLIC Cost of Reporting A publicly owned company must file quarterly reports with the Securities and exchange Board of India. These reports can be costly especially for small firms. Disclosure Management may not like the idea or reporting operating data, because such data will then be available to competitors. Self dealings The owners managers of closely held companies have many opportunities for self-transactions, although legal they may not want to disclose to the public. Inactive market low price If a firm is very small and its and its shares are not traded frequently, then its stock will not really be liquid and the market price may not be truly representative of the stocks value. Control
[Type text]
Page 11
Owning less than 50% of the shares could lead to a loss of control in the management. Other disadvantages The profit earned by the company should be shared with its investors in the form of dividend. An IPO is a costly affair. Around 15-20% of the amount realized is spent on raising the same. A substantial amount of time and effort has to be invest. In an IPO, the company has to disclose results of operations and financial position to the public and the Securities and Exchange Board of India (SEBI).
[Type text]
Page 12
TRENDS IN IPO
PRIMARY REASONS FOR A COMPANY GOING PUBLIC.
Most people label a public offering as a marketing event, which it typically is. For the majority of firms going public, they need additional capital to execute long-range business models, increase brand name, to finance possible acquisitions or to take up new projects. By converting to corporate status, a company can always dip back into the market and offer additional shares through a rights issue.
PERFORMANCE IN 90s Let us have a look at the general development of the Primary Markets in the nineties. There have been many regulatory changes in the regulation of primary market in order to save investors from fraudulent companies. The most path breaking development in the primary market regulation has been the abolition of CCI (Controller of capital issues). The aim was to give the freedom to the companies to decide on the pricing of the issue and this was supposed to bring about a self-managing culture in the financial system. But the move was hopelessly misused in the years of 1994-1995 and many companies came up with issues at sky-high prices and the investors lost heavily. That phase took a heavy toll on the investors sentiment and the result was the amount of money raised through IPO route.
[Type text]
Page 13
1993-96: SUNRISE, SUNSET. With controls over pricing gone, companies rushed to tap the Primary Market and they did so, with remarkable ease thanks to overly optimistic merchant bankers and gullible
investors. Around Rs20000 crores were raised through 4053 issues during this period. Some of the prominent money mobilizes were the so called sunrise sectors-polyester, textiles, finance, aquaculture. The euphoria spilled over to the Secondary Market. But reality soon set in. Issuers soon failed to meet projections, many disappeared or sank. Result: the small investor deserted both markets-till the next boom!
1998-2000: ICE ON A HOT STREAK As the great Indian software story played itself out, software stocks led a bull charge on the bourses. The Primary Market caught up, and issues from the software markets flooded the market. With big IPOs from companies in the ICE (Information Technology, Communication and Entertainment) sectors, the average issue price shot up from Rs.5 crore in 1994-96 to Rs.30 crore. But gradually, hype took over and valuations reached absurd levels. Both markets tanked.
2001-2002-ALMOST CLOSED There were hardly any IPOs and those who ventured, got a lukewarm response. A depressed Secondary Market had ensured that the doors for the
[Type text] Page 14
Primary Market remained closed for the entire FY 2001-2002.There were hardly any IPOs in FY 2001-2002.
2002: QUALITY ON OFFER. The Primary Market boom promises to be different. To start with, the cream of corporate India is queuing up, which ensures quality. In this fragile market, issue pricing remains to be conservative, which could potentially mean listing gains. This could rekindle the interest of small investors in stocks and draw them back into the capital market. The taste of gains from the primary issues is expected to have a spillover effect on the secondary market, where valuations today are very attractive.
2003: IPO-IMPROVED PERFORMANCE OVERALL! Even as the secondary market moved into top gear in 2003 the primary market too scripted its own revival story, buoyed largely by the Maruti IPO which was oversubscribed six and a half times. In 2003 almost all primary issues did well on domestic bourses after listing, prompting retail investors to flock to IPOs. All IPOs, including Indraprastha Gas and TV Today Network which was oversubscribed 51 times showed the growing appetite for primary issues. Divi Labs hit the market in February followed by Maruti. Initially, the Maruti share price was considered steep at Rs125 per share for a Rs5 paidup share. By the end of the year, the stock had climbed to over Rs355. Close on the heels of Maruti, came the Uco Bank IPO, which attracted about 1mn
[Type text] Page 15
applicants. The primary issue of Indian Overseas Bank attracted about 4.5mn applicants and Vijaya Bank over Rs40bn in subscriptions. The last one to get a huge response was Indraprastha Gas, which reportedly garnered about Rs30bn. TV Todays public offer was expected to draw in excess of Rs30bn. In overseas listings, the only notable IPOs were Infosys Technology's secondary ADR offering and the dull debut of Sterlite Group company Vedanta on the London Stock Exchange. It was really Maruti Udyog that took the lead with its new issue in June. The issue was heavily over-subscribed and by the middle of December the share value appreciated 186 per cent. The near trebling of the investment in less than 6 months inspired the retail investor who is now back again in the market scouting for good scrips. After the phenomenal success of Maruti issue, a number of companies have approached the capital market and a lot more are waiting for SEBI approval. SEBI has taken enough care to force companies to make relevant disclosures for the investor to judge the quality of new issues. Besides, the companies themselves have been careful not to over-price the shares. On the contrary, some of the companies have deliberately under-priced them to let the issue get over-subscribed and to let the investor share some of the capital gain after listing. With the care taken by SEBI and the companies it is unlikely that the experience of 1995 will be repeated. In the financial year just ended, 23 companies tapped the primary market and managed to garner less than Rs200bn.
[Type text]
Page 16
The latest development in the primary market has been the Indian players thirst for money satiating offshore
INITIAL PUBLIC OUTBURST Riding high on the market bull, companies are preparing to lap up investors money through Initial Public Offerings (IPOs). The fundamentally good economy makes us very positive about the initial public offering market. Nearly 600 companies wish to raise over Rs50,000 Crore, for a variety of reasonspublic sector units for capital (Power Finance Corporation and National Thermal Power Corporation), residual sale (CMC and IBP), divestment (ONGC and Gas Authority of India Ltd), banks for capital (Central Bank of India and Punjab & Sind Bank), for market valuations (Tata Consultancy Services), for venture capital exit (UTV and Secure Meters), and for expansion (Biocon and NDTV). Among these Biocon the first Indian Biotech company to come with an IPO was oversubscribed by 33% and raised as much as Rs.315 Crore. Other mega issues included TCS which was oversubscribed 5.46 times and raised Rs.417 Crore. The much awaited government companies ONGC was oversubscribed by 6 times and raised a whooping capital of Rs.1069.49 Crore another government company which was a huge success was IPCL which too was oversubscribed by 1.18 times raising a capital of Rs.1010.45 Crore. The media company NDTV was oversubscribed 3 times its size.Other IPOs to hit the market this year were Shah Petroleum (31.78 Crore) Crew
[Type text]
Page 17
Bos Products (12.25 Crore) Texmaco (15.49 Crore) Vishal Export Overseas (27 Crore). A slew of IPOs have been lined up in the coming months from the public as well as the private sector. The IPOs are estimated to raise Rs25,000-30,000 Crore. The sentiment for IPOs has been bolstered after the government came out with fair pricing of its stake sale in IPCL. Among the companies slated to come out with IPOs include: SET India, Shoppers Stop, Central Bank of India, NTPC and Hutchinson Max Telecom.
Company Tata Consultancy Services Ltd New Delhi Television Ltd. Datamatics Technologies Ltd. Dishman Pharmaceuticals & Chemicals Ltd. Biocon Ltd Oil & Natural Gas Corporation Ltd. Power Trading Corporation of India Ltd. Gas Authority of India Ltd. Indian Petrochemicals Corporation Ltd.
[Type text]
Issue Date 05/08/2004 28/04/2004 19/04/2004 07/04/2004
Issue Price 850 70 110 175
Current Price 987.50 87.55 136.20 459.60
% Change 16.17 25.07 23.81 162.62
18/03/2004 13/03/2004 08/03/2004
315 712.50 16
503.85 703.20 53.05
59.95 -1.30 231.56
05/03/2004 27/02/2004
185.25 161.50
176.10 188.10
-4.93 16.47
Page 18
Patni Computer Systems Ltd. T.V. Today Network Ltd. Indraprastha Gas Limited Maruti Udyog Limited Divi's Laboratories Ltd. Canara Bank Union Bank of India I-Flex Solutions Ltd. Punjab National Bank Moving Picture Company (India) Ltd. Centurion Bank Ltd. Birla Corporation Ltd. Arvind Remedies Ltd. Adlabs Films Ltd. Creative Eye Ltd. Aztec Software & Technology Services Ltd. Balaji Telefilms Ltd. Aksh Optifibre Ltd. Tele Data Informatics Ltd. Tata Teleservices (Maharashtra) Ltd
05/02/2004 27/12/2003 05/12/2003 19/06/2003 17/02/2003 18/11/2002 20/08/2002 05/06/2002 21/03/2002 19/02/2001 14/02/2001 17/01/2001 06/01/2001 11/12/2000 03/11/2000 02/11/2000 06/10/2000 18/07/2000 20/07/2000 20/09/2000
230 95 48 125 130 25.00 6.00 525.00 21.00 30.00 2.00 9.00 90.00 115.00 45.00 77.00 120.00 55.00 15.00 2.00
311.75 105.80 18.65 360.20 1,136.00 126.75 62.05 573.00 253.20 6.13 6.85 114.25 1.38 89.10 8.20 36.50 90.55 16.30 41.95 18.05
35.54 11.36 -61.14 188.16 773.85 407.00 934.17 9.14 1,105.71 -79.57 242.50 1,169.44 -98.47 -22.52 -81.78 -52.60 -24.54 -70.36 179.67 802.50
[Type text]
Page 19
PRICING OF ISSUE
Controller Of Capital Issue During the Controller of Capital Issue (CCI) regime the issues were priced by the company and approved by CCI. Generally the CCI was very conservative and hardly allowed premium issues.
Arrival of SEBI After the Arrival of SEBI free market policy is followed for pricing of issue. Merchant Bankers are responsible for justifying the premium. The company was allowed to give future profit projections. A company can issue shares to applicants in the firm allotment category at higher price than the price at which securities are offered to public. Further, an eligible company is free to make public/rights issue in any denomination determined by it in accordance with the Companies Act, 1956 and SEBI norms.
During the booming period stock market issues got oversubscribed beyond imagination. Number of companies came in with stiff premium and faced investor resistance. This resulted in cautious approach by the merchant bankers and underwriters for taking up underwriting of the future issues.
[Type text]
Page 20
Deciding Premium by Bid System Since year 2000 SEBI has changed pricing formula. The promoters cannot give future projections and merchant banker alone cannot decide the pricing of IPO. At present, 50%of the IPO is reserved for the wholesale investors and 50% is for the small investor. The Lead-Manager starts road show in consultation with Institutional Investors. Then they call for bid at recommended prices. Once, bids are received pricing is open for discussion. The mean bid price is accepted and allocation is done. The lead manager has to ensure full subscription of the full quota. Then the price is declared in the newspapers. The retail investor has to follow this price and submit application with cheque or demand draft. This part of the issue should also be fully subscribed. If the issue is not underwritten and subscription received is less than 90% then the IPO is considered as fail and whatever fund has been received has to refunded. The company looses money it has spent on IPO.
Thus pricing is most important and difficult aspects of IPO. However in the present scenario most of the issues are priced by the book building method. Accurate pricing is essential for the success of IPO.
[Type text]
Page 21
BOOK BULIDING THE LATEST AVTAAR OF PRICE DISOVERY

The basic motto of Book Building is that the market knows the best. Ever since SEBI allowed companies with no profitability record to come up with IPO via Book Building route, there has been a good rush of such issues.
What is Book Building? Book Building is basically a capital issuance process used in Initial Public Offering (IPO), which aids price and demand discovery. IT is a process used for marketing a public offer of equity shares of a company and is a common practice in most developed countries. Book Building is so-called because the collection of bids from investors is entered in a "book". These bids are based on an indicative price range. The issue price is fixed after the bid closing date.
Persons Involved in the Book-Building Process The principal intermediaries involved in the Book Building process are the company; Book Running Lead Managers (BRLM) and syndicate members who are intermediaries registered with SEBI and are eligible to act as underwriters. Syndicate members are appointed by the BRLM.
How is the book built? A company that is planning an initial public offer appoints a category-I Merchant Banker as a book runner. Initially, the company issues a draft prospectus which does not mention the price, but gives other details about
[Type text] Page 22
the company with regards to issue size, past history and future plans among other mandatory disclosures. After the draft prospectus is filed with the SEBI, a particular period is fixed as the bid period and the details of the issue are advertised. The book runner builds an order book, that is, collates the bids from various investors, which shows the demand for the shares of the company at various prices. For instance, a bidder may quote that he wants 50,000 shares at Rs.500 while another may bid for 25,000 shares at Rs.600. Prospective investors can revise their bids at anytime during the bid period that is, the quantity of shares or the bid price or any of the bid options.
Basis of Deciding the Final Price On closure of the book, the quantum of shares ordered and the respective prices offered are known. The price discovery is a function of demand at various prices, and involves negotiations between those involved in the issue. The book runner and the company conclude the pricing and decide the allocation to each syndicate member.
Payment for the shares The bidder has to pay the maximum bid price at the time of bidding based on the highest bidding option of the bidder. The bidder has the option to make different bids like quoting a lower price for higher number of shares or a higher price for lower number of shares. The syndicate member may waive the payment of bid price at the time of bidding. In such cases, the issue price may be paid later to the syndicate member within four days of confirmation of allocation. Where a bidder has been allocated lesser number of shares
[Type text]
Page 23
than he or she had bid for, the excess amount paid on bidding, if any will be refunded to such bidder.
Advantage of the Book Building process versus the Normal IPO marketing process Unlike in Book Building, IPOs are usually marketed at a fixed price. Here the demand cannot be anticipated by the merchant banker and only after the issue is over the response is known. In book building, the demand for the share is known before the issue closes. The issue may be deferred if the demand is less. This process allows for price and demand discovery. Also, the cost of the public issue is reduced and so is the time taken to complete the entire process.
Features Pricing
Fixed Price Process
Book Building Process
Price at which the Security Price at which the Security is offered/allotted is known will be offered/allotted is not in advance to the investor. known in advance to the investor. Only an indicative price range is known.
Demand
Demand for the securities Demand for the securities offered is known only after offered the closure of the issue. can be known
everyday as the book is built. only after
Payment
Payment if made at the Payment times of subscription allocation.
wherein refund is given
[Type text]
Page 24
after allocation
Guidelines for Issues to be made through 100% Book Building Route SEBI had issued guidelines in October 1997 for book building which were applicable for 100% of the issue size and for issues above Rs.100 Crore. The guidelines were revised subsequently to reduce the limit to issues of Rs.25 crore to encourage the use of this facility. However, no issuer used this facility. SEBI modified the framework for Book Building further in October 1999 to make it more attractive. The modified framework does not replace the existing guidelines. The issuer would have option to issue securities using book building facility under the existing framework: 1. The present requirement of graphical display of demand at bidding terminals to syndicate members as well as the investors has been made optional. 2. The 15% reservation for individual investors bidding for up to 10 marketable lots may be merged with the 10% fixed price offer. 3. Allotment for the book built portions shall be made in demat form only. 4. The issuer may be allowed to disclose either the issue size or the number of securities to be offered to the public. 5. Additional disclosure with respect to the scheme for making up the deficit in the sources of financing and the pattern of deployment of excess funds shall be made in the offer document.
[Type text]
Page 25
Is the process followed in India different from abroad? Unlike international markets, India has a large number of retail investors who actively participate in IPOs. Internationally, the most active investors are the Mutual Funds and Other Institutional Investors. So the entire issue is book built. But in India, 25 per cent of the issue has to be offered to the general public. Here there are two options to the company. According to the first option, 25 per cent of the issue has to be sold at a fixed price and 75 per cent is through Book Building. The other option is to split the 25 per cent on offer to the public (small investors) into a fixed price portion of 10 per cent and a reservation in the book built portion amounting to 15 per cent of the issue size. The rest of the book built portion is open to any investor.
[Type text]
Page 26
COST OF PUBLIC ISSUE.

The cost of public issue is normally between 8 and 12 percent depending on the size of the issue and on the level of marketing efforts. The important expenses incurred for a public issue are as follows:
y Underwriting expenses: The underwriting commission is fixed at 2.5 % of the nominal value (including premium, if any) of the equity capital being issued to public. y Brokerage: Brokerage applicable to all types of public issues of industrial securities are fixed at 1.5% whether the issue is underwritten or not. The managing brokers (if any) can be paid a maximum remuneration of 0.5% of the nominal value of the capital being issued to public. y Fees to the Managers to the Issues: The aggregate amount payable as fees to the managers to the issue was previously subject to certain limits. Presently, however, there is no restriction on the fee payable to the managers of the issue. y Fees for Registrars to the Issue: The compensation to he registrars, typically based on a piece rate system, depends on the number of applications received, number of allotters, and the number of unsuccessful applicants.
[Type text]
Page 27
y Printing Expenses: These relate to the printing of the prospectus, application forms, brouchers, share certificate, allotment/refund letters, envelopes, etc. y Postage Expenses: These pertain to the mailing of application forms, brochures, and prospectus to investors by ordinary post and the mailing of the allotment/refund letters and share certificates by register posts. y Advertising and Publicity Expenses: These are incurred primarily towards statutory announcements, other advertisements, press conferences, and investors conferences. y Listing Fees: This is the concerned fee payable to concerned stock exchange where the securities are listed. It consists of two components: initial listing fees and annual listing fees. y Stamp Duty: This is the duty payable on share certificates issued by the company. As this is the state subject, it tends to vary from state to state.
[Type text]
Page 28
BRIEF NOTE ON INTERMEDIARIES
The process of IPO is highly complex and its success is extremely important for the company. In this process it is important that all the intermediaries should work cohesively and within a framework of law. Any serious error by any intermediary can affect the IPO.
The following are the important intermediaries involved in the process-
MERCHANT BANKERS Eligibility criteria-SEBI issues an authorization letter to the finance companies, which are eligible to work as merchant bankers. The eligibility criteria depend on network and infrastructure of the company. The company should not be engaged in activities that are banned for merchant bankers by SEBI. SEBI issues authorization letter valid for 3 years and the company has to pay necessary fees. Such merchant banker can be appointed as lead manager for IPO.
Functions-Merchant banker can work as lead manager co lead manager investment banker underwriter etc.
Responsibility-lead managers are fully responsible for the content and correctness of the prospectus. They must ensure the commencement to the completion of the IPO. Certain guidelines are laid down in section 30 of the
[Type text] Page 29
SEBI act 1992 on the maximum limits of the intermediaries associated with the issue.
Size of the Issue 50 cr. 50-100 cr. 100-200 cr. 200-400 cr. Above 400 cr.
No of Lead Managers 2 3 4 5 1 or more as agreed by the board
The number of co managers should not exceed the number of lead managers. There can be only 1 adviser to the issue. There is no limit on the number of underwriters.
Informational Asymmetry-in general merchant bankers know the market better than the issuing company. They would exploit the superior knowledge to under price issues. This makes their job easier and helps them earn the goodwill of investors.
BROKERS All the recognized stock exchange members are called brokers and thus any member of a recognized stock exchange can become a broker to the issue. The brokers can work as broker and underwriter or both. In India usually a broker not only does his normal broking business buying and selling securities for brokerage but also works as an underwriter. They can give
[Type text] Page 30
underwriting commitment in accordance with their net worth. A broker offer marketing support, underwriting support, disseminates information to investors about the issue and distributes issues stationary at retail investor level. The brokers are governed by rules of SEBI and the respective stock exchange. The brokers are key to the success of the issue. The brokers appoint sub brokers who are in direct contact with the investors.
UNDERWRITERS The underwriter is the principle player in the IPO providing the firm withReputation-as the underwriter is legally liable and because he has on going dealing with the customers to whom he sells shares. The underwriter puts his reputation on the line.
Finding investors-the underwriter first puts together a syndicate of other underwriters to distribute the shares. The syndicate finds investors willing to put their money into the company. This has serious implications. Will the investors be institutional or private? Is the company widely held or are the shares concentrated with just a few investors?
Experience-the underwriter knows the detail of the process better than any other participant since issuing shares is one of their primary business functions. Underwriters are the ones who provide proper guidance.
After market support-the underwriter protects investors and thus makes the offering more attractive. It is important for the firm to have a clear
[Type text] Page 31
understanding with the underwriter exactly how much support he plans to provide if the IPO is not fully subscribed and accordingly his underwriting commission is fixed.
Future services-a good relationship with an underwriter can save time and money in future dealings.
Pre offering assistance-the underwriter will conduct road shows with the companys management distribute the prospectus and marketing of the underwriters directly generates talk to potential investors about appropriate pricing. Some part of the value that the potential shareholders attach to shares.
Underwriting involves a commitment from the underwriter to subscribe to the shares of a particular company to the extent it is under subscribed by the public or existing shareholders of the corporate. An underwriter should have a minimum net worth of 20 lakhs and his total obligation at any time should not exceed 20 times his net worth. A commission is paid to the writers on the issue price for undertaking the risks of under subscription. The maximum rate of underwriting commission paid is as follows. Nature of Issue On amount Devolving on Underwriters On amounts subscribed by the public Equity shares preference shares and Debentures 2.5% 2.5%
[Type text]
Page 32
Issue amount upto Rs5 lakhs Issue amount exceeding %
2.5%
2.5%
2.0%
1.0%
The fees for underwriter and broker are decided by the company within the maximum possible limit as fixed by the SEBI.
BANKERS TO THE ISSUE Any scheduled bank registered with SEBI can be appointed as the banker to the issue. Several commercial banks are working as bankers to the issue. They get fees on amount collected by them. There are no restrictions on the number of bankers to the issue. The main function of banker involves collection of duly filed application forms with money (cheque/drafts) maintains a daily report, transferring the proceeds to the share application money collected with the application forms to the registrar. The bank provides application forms to the investors. They accept duly filled forms with cheque/ drafts. They prepare collection reports and transfer funds and applications to the company/registrar.
REGISTRAR AND TRANSFER AGENTS Registration with SEBI is mandatory to take on responsibilities as a registrar or share transfer agent. The registrar provides administrative support to the issue process. Each agent is registered with SEBI. Hey have to maintain net worth and infrastructure criteria. They have to renew their License
[Type text] Page 33
periodically. He collects all application from the bank and ensures reconciliation of funds and of application amount and participates in process of basis of allotment. If the IPO is oversubscribed they provide computerized program for allotment. They manage refund orders and allotment letters. They provide the final list of allotees to Lead Manager ROC and stock exchange. If the company wants they also manage post issue IPO functions relating to shareholders register for the company.
DEPOSITORIES Since the year 2000 its compulsory that all fresh issue of shares must be made only in the dematerialized format (DMAT). The Depository institute issues unique number of every IPO or company, when shares are allotted to the company/registrar provides shareholders register to depository in electronic form. Thus automatically all shareholders get allotment in their DMAT account.
LEGAL ADVISOR. Normally the company for the purpose of IPO does this appointment. He is responsible legal compliance of IPO process. There are other intermediaries like Advertising Agents etc. but the company governs their role.
[Type text]
Page 34
SEBI AND IPO

ELIGIBILITY NORMS
FOR UNLISTED COMPANIES It should have a pre issue network of a minimum amount of Rs1 crore in 3 out of the preceding 5 financial years. In addition the company should compulsorily need the minimum network level during the two immediately preceding years.
It should have a track record distributable profits as given in section 205 of companies act 1956 for at least 3 years in the preceding 5 years period. The issue size (i.e. Offer + Form allotment + Promoters contribution through the offer document) should not exceed an amount equal to 5 times its pre issue worth.
FOR LISTED COMPANIES It should have a track record distributable profits as given in section 205 of companies act 1956 for at least 3 years in the preceding 5 years period.
[Type text]
Page 35
It should have a pre issue network of a minimum amount of Rs1 crore in 3 out of the preceding 5 financial years with the minimum net worth to be met during the immediately preceding 2 years.
SEBI NORMS
SEBI has come up with Investor Protection and Disclosure Norms for raising funds through IPO. These rules are amended from time to time to meet with the requirement of changing market conditions.
Disclosure Norms.
y Risk Factor-The Company/Merchant Banker must specify the major risk factor in the front page of the offer document. y General Risk.-Attention of the investor must be drawn on these risk factors. y Issuers Responsibility-It is the absolute responsibility of the issuer company about the true and correct information in the prospectus. Merchant Banker is also responsible for giving true and correct information regarding all the documents such as material contracts, capital structure, appointment of intermediaries and other matters. y Listing Arrangement- It must clearly state that once the issue is subscribed where the shares will be listed for trading.
[Type text]
Page 36
y Disclosure Clause- It is compulsory to mention this clause to distinctly inform the investors that though the prospectus is submitted and approved by SEBI it is not responsible for the financial soundness of the IPO. y Merchant Bankers Responsibility-Disclaimer Clause the Lead Manager has to certify that disclosures made in the prospectus are generally adequate and are in conformity with the SEBI Guidelines. y Capital Structure- The company must give complete information about the Authorised capital, Subscribed Capital with top ten shareholders holding pattern, Promoters interest and their subscription pattern etc. Also about the reservation in the present issue for Promoters, FII`s, Collaborators, NRI`s etc. Then the net public offer must be stated very clearly. y Auditors Report- The Auditors have to clearly mention about the past performances, Cost of Project, Means of Finance, Receipt of Funds and its usage prior to the IPO. Auditor must also give the tax-benefit note for the company and investors.
INVESTOR PROTECTION NORMS.
y Pricing of Issue-The pricing of all the allocations for the present issue must follow the bid system. The reservation must be disclosed for different categories of investors and their pricing must be specified clearly.
[Type text]
Page 37
y Minimum Subscription- If the company does not receive minimum subscription of 90% of subscription in each category of offer and if the issue is not underwritten or the underwriters are unable to meet their obligation, then fund so collected must be refunded back to all applicants. y Basis of Allotment- In case of full subscription of the issue, the allotment must be made with the full consultation of the concerned stock exchange and the company must be impartial in allotting the shares. y Allotment/Refund- Once the allotment is finalized, the refund of the excess money must be made within the specified time limits otherwise the company must pay interest on delayed refund orders. y Dematerialisation of Shares-As per the provisions of the Depositories Act, 1996, And SEBI Rules, now all IPO will be in Demat form only. y Listing of Shares- It is mandatory on the part of the promoters that once the IPO is fully subscribed, and then the underlying shares must be listed on the stock exchange. This provides market and exit routes to the investors.
The above are the major Guidelines for the Investor Protection and Disclosure Norms. The SEBI has provided rules for every possible situation.
[Type text]
Page 38
SEBI GUIDELINES
IPO of Small Companies Public issue of less than five crores has to be through OTCEI (Over the Counter Exchange of India) and separate guidelines apply for floating and listing of these issues.
Public Offer of Small Unlisted Companies (Post-Issue Paid-Up Capital upto Rs.5 crores) Public issues of small ventures which are in operation for not more than two years and whose paid up capital after the issue is greater than 3 crores but less than 5 crores the following guidelines apply. 1. Securities can be listed where listing of securities is screen based. 2. If the paid up capital is less than 3 crores then they can be listed on the Over The Counter Exchange of India (OTCEI) 3. Appointment of market makers mandatory on all the stock exchanges where securities are proposed to be listed.
Size of the Public Issue Issue of shares to general public cannot be less than 25%of the total issue. Incase of IT, Media and Telecommunication sectors, this stipulation is reduced subject to the conditions that 1. Offer to the public is not less than 10% of the securities issued. 2. A minimum number of 20 lakh securities is offered to the public 3. Size of the net offer to the public is not less than Rs.30 crores.
[Type text]
Page 39
Promoters Contribution 1. Promoters should bring in their contribution including premium fully before the issue 2. Minimum promoters contribution is 20-25% of the public issue. 3. Minimum lock in period for promoters contribution is five years. 4. Minimum lock in period for firm allotment is three years.
Collection Centers for Receiving Applications 1. There should be at least 30 mandatory collection centers, which should include invariably the places where stock exchanges have been established. 2. For issues not exceeding Rs.10 crores the collection centers shall be situated at:y The 4 metropolitan centres viz. Mumbai Delhi Calcutta Chennai y All such centres where stock exchanges are located in the region in which the registered office of the company is situated.
Regarding allotments of shares 1. Net Offer the general public has to be atleast 25% of the total issue size for listing on a stock exchange 2. It is mandatory for a company to get its shares listed at the regional stock exchange where the registered office of the issuer is located. 3. In an issue of more than 25 crores the issuer is allowed to place the whole issue by book-building.
[Type text] Page 40
4. Minimum of 50% of the Net Offer to the public has to be reserved for the investors applying for less than 1000 shares. 5. There should be atleast 5 investors for every 1 lakh equity offered. 6. Quoting of PAN or GIR No. in application for the allotment of securities is compulsory where monetary value of investment is Rs.50000/- or above. 7. Indian development financial institutions and Mutual Fund can be allotted securities upto 75% of the issue amount. 8. A venture capital fund shall not be entitled to get its securities listed on any stock exchange till the expiry of 3 years from the date of issuance of securities. 9. Allotment to categories of FIIs and NRIs/OCBs is upto maximum of 24%, which can be further extended to 30% by an application to the RBI-supported by a resolution passed in the General Meeting.
Timeframes for Issue and Post-Issue Formalities 1. The minimum period for which the public issue is to be kept open is 3 working days and the maximum for which it can be kept open is 10 working days. The minimum period for right issue is 15 working days and the maximum is 60 working days. 2. A public issue is effected if the issue is able to procure 90% of the total issue size within 60 days from the date of the earliest closure of the public issue. 3. In case of oversubscription the company may have he right to retain the excess application money and allot shares more than the proposed issue, which is referred to as green-shoe option
[Type text] Page 41
4. Allotment has to be made within 30 days of the closure of the Public issue and 42 days in case of Rights issue 5. All the listing formalities of a Public Issue have to be completed within 70 days from the date of closure of the subscription list.
Dispatch of Refund Orders. 1. Refund orders have to be dispatched within 30 days of the closure of the issue. 2. Refunds of excess application money i.e. non-allotted shares have to be made within 30 days of the closure of the issue.
Other Regulations 1. Underwriting is not mandatory but 90% subscription is mandatory for each issue of capital to public unless it is disinvestment where it is not applicable. 2. If the issue is undersubscribed then the collected amount should be returned back 3. If the issue size is more than Rs500 crores, voluntary disclosures should be made regarding the deployment of funds and an adequate monitoring mechanism put in place to ensure compliance. 4. There should not be any outstanding warrants for financial instruments of any other nature, at the time of the IPO. 5. In the event of the initial public offer being at a premium and if the rights under warrants or other instruments have been exercised within 12 months prior to such offer, the resultant shares will be not taken
[Type text] Page 42
into account for reckoning the minimum promoters contribution further, the same will also be subject to lock-in. 6. Code of advertisement as specified by SEBI should be adhered to 7. Draft prospectus submitted to SEBI should also be submitted simultaneously to all stock exchanges where it is proposed to be listed.
Restrictions on Allotments 1. Firm allotments to mutual funds, FII and employees are not subject to any lock-in period. 2. Within 12 months of the public issue no bonus issue should be made. 3. Maximum percentage of shares, which can be distributes to employees cannot be more than 5% and maximum shares to be allotted to each employee cannot be more than 200.
Relaxation of entry norms for infrastructure companies With a view channelise greater flow of funds to infrastructure companies, SEBI granted a number of relaxations to infrastructure companies. These included: Exemption from the requirement of making a minimum public offer of 25 percent of securities and also from the requirement of 5shareholders per Rs.1 lakh of offer made.
[Type text]
Page 43
Exemption from the minimum subscription of 90 per cent provided disclosure is made about the alternate source of funding considered by the company, in the event of under-subscription in the public issue. Permission to freely price the offerings in the domestic market provided the promoter companies along with equipment supplier sand other strategic investors subscribe to 50 percent of the equity at the same price as the price offered to the public or at a price higher than that offered to the public. Permission to keep the issues open for 21 days to enable the companies to mobilize funds. Exemption from requirement to create and maintain a debenture redemption reserve in case of debenture issues as provided in the SEBI Disclosure & Investor Protection Guidelines These concessions are available to them if these are appraised by a Development Financial Institution, Infrastructure Development Finance Corporation or Infrastructure Leasing and Financing Services Ltd. and there is a minimum financial participation by them. The minimum participation of the appraising agency, initially fixed at 10% of project cost, was reduced to 5%. Further, the minimum participation can be met by any of the appraising agencies, jointly or severally, irrespective of whether they appraise the project or not.
Eligibility norms for public issues/offers for sale by companies in the IT Sector Eligibility norms were modified to provide that a company in the IT Sector going for IPO/offer for sale shall have track record of
[Type text] Page 44
distributable profits as per Section 205 of the Companies Act in three out of five years in the IT business/from out of IT activities. It can also access the market through the alternative route of appraisal and financing by a bank or financial institution. The same conditions would apply also to a listed company which has changed its name to reflect activities in IT sector.
[Type text]
Page 45
MARKETING OF IPO
The role of marketing, and particularly promotion, in the pricing and trading of Securities is fairly limited
PRELIMINARY REQUIREMENTS The company has to complete all legal requirements, appoint all intermediaries and once they get SEBI card (approval), the process of marketing of IPO can commence.
TIMING OF IPO This the most important factor for the success of IPO. If, secondary market is depressed, if there is political unrest, if serious international problems are prevailing then it is considered to be negative factors for timing of IPOs. If these factors are favorable then the Company must find out about the timing of other prestigious IPOs. Normally in good times many companies are crowding at the same time .This year more than 29 companies are coming with IPOs. Around Rs.25,000-30,000crore of capital is going to be raised this year.
A question of Timing Timing the issue is critical as it determines the success or failure of an issue to a great extent. During 1995-96, Primary Market boom, there was a period during which there were two to three issues in a day. This is a dangerous situation.
[Type text]
Page 46
The ideal time for marketing an issue is a boom in the Secondary Market, peaceful socio-political-economic environment and at least two days gap between two issues.
Marketing initial public offers (IPOs) through the secondary market SEBI approved a proposal of marketing IPOs through the secondary market. It proposes to use the existing infrastructure of stock exchanges (terminals, brokers and systems), presently being used for secondary market transactions, for marketing IPOs with a view to get rid of certain inherent disadvantages faced by issuers and investors like tremendous load on banking and postal system and huge costs in terms of money and time associated with the issue process. This system would confirm to all extant statutory requirements. The investor would approach broker for placing an order for buying shares of primary issues. The registrar in consultation with merchant banker and the regional stock exchange of the issuer will finalize the basis of allotment and intimate the same to the exchanges who in turn shall inform the brokers. The brokers will advise the successful allottees to submit the application form and the amount payable towards the shares. The broker will deposit the amount received in a separate escrow account for the primary market issue. The clearing house of the exchange will debit the primary issue account of the broker and credit the issuers account. Subsequently, the certificates would be delivered to the investors or the depository account of the investor would be credited.
[Type text] Page 47
The securities can be listed on the stock exchange from the 15th day from the closure of the issue as against 45-60days at present. As investors will have to part with their funds only on successful allotment, their funds are not unnecessarily blocked. This would also ensure that refunds are done away with. The system seeks to reduce the time taken presently for completion of the issue process, as well as the cost of the issue.
The Effects of Marketing on IPOs An investment bankers marketing campaign for an IPO is critical. This campaign, as much as anything that precedes or follows it, will determine the success or failure of the IPO. The key is to stimulate investor demand for the stock so that, the demand will exceed the supply. Through the marketing effort, the underwriter attempts to create an imbalance in the supply/demand equation for the issue, so that there are more buyers than sellers when the stock is finally released for sale to the public. Before a company gets to market through an IPO, it spends a fortune on hype, Paperwork and publicity to create demand. The buzz is stirred up before the shares are released. So you never get in cheap. And the ones that are cheap are usually not worth holding five minutes. To understand the sense of these statements one must understand the relationship between the marketing of an IPO and its initial returns, and how different parties benefit from this relationship. A securitys value is an increasing function of the number of investors who know about the security. Investor knowledge leads to greater value consequently; the efforts taken by an investment banker to promote awareness in a firm can affect the valuation of its stock by expanding the investor base.
[Type text] Page 48
The reputation of an investment banker could expand a firms investor base at a lower cost than the firm can, since the promotional efforts of an investment banker on behalf of the firm would be more creditable. The efforts of an investment banker to promote an IPO through increased media coverage will increase retail interest in that stock. The effects of an investment bankers promotional efforts are not only important for explaining the initial returns of some IPOs, but also for explaining the rankings of investment bankers Promoting an issue sufficiently to insure a run-up in its early aftermarket prices attracts further investor interest catches the interest of analysts and helps to maintain or expand the investor base of the stock If the sole motivation of a road show were to sell IPOs to their regular institutional investors and if those investors were to hold onto these stocks, then there would be no motivation for an investment banker to do more than a minimal amount of promotion since there would be no need to attract retail investors in early aftermarket trading. However, research contradict that these institutional investors do not hold onto the shares allocated to them over the long-term, instead they sell their allocation, primarily to retail customers in hot issues
GENERAL PROCEDURE FOR MARKETING OF IPO

PRESS CONFERENCE Promoters and Lead Managers call for press conference in each major investment center. Reporters are briefed about the issue. They carry it as news-item in their papers.
[Type text] Page 49
INVESTORS CONFERENCE The prospective investors are called by invitation. The Promoters and Lead Managers give presentations. They reply to the questions of the investors to boost their confidence.
ROAD-SHOW This is like the investors conference but normally is done abroad for marketing ADR/GDR issues. It is an expensive process and requires a lot of legal compliances. The company has to observe the rules of the concerned country. However, road shows are becoming more and more popular in India.
NEWSPAPER ADVERTISEMENT The company releases statutory advertisements in leading newspapers. The company has to publish abridges prospectus in leading newspapers. It is the responsibility of the promoters to ensure that the issuing company and their group companies should not release any commercial advertisement, which may influence the investors decision for investment.
PRINTING STATIONERY-PROSPECTUS The company has to print approved prospectus and provide enough copies to all intermediaries. If any investor asks for a copy of prospectus it must be provided to him without any fees. Sufficient quantities should be maintained at the registered office of the company and with the Lead Managers.
[Type text] Page 50
PRINTING APPLICATION FORMS Sufficient number of application forms must be printed much before the opening of the issue. Each form must contain abridged prospectus in SEBI approved format. Sometimes different coloured forms are issued to FI, FII, NRI and general public. It is compulsory to provide stationery to all underwriters and brokers. They will arrange distribution to their sub-brokers and other clients. Sometimes, company makes direct dispatch of forms to prospective investors.
[Type text]
Page 51
COMPANY BACKGROUND Biocon is India's premier biotechnology company, established in 1978. Headquartered in Bangalore, Biocon has evolved from an enzyme company to a fully integrated biopharmaceutical enterprise, focused on healthcare. Biocon's success has been characterized by an enduring set of corporate values based on innovation, integrity, strong leadership and social responsibility. As India's first and leading biotechnology company Biocon extends its support to numerous community outreach and corporate citizenship initiatives with special concentration in the areas of healthcare, education and environment. Biocon aims to continuously create growth in different areas of the company and will soon be the first company, globally to manufacture human insulin using a Pichia expression system. In addition Biocon is positioned to be India's largest producer of human insulin and India's first company to set up commercial production of monoclonal antibodies.
PRE ISSUE ANALYSIS

Details of the Public Offer The issue size includes 10,000,000 equity shares of Rs.5/-each at a price of Rs. [270-315] the issue constitutes 10% of the fully diluted post issue paid up capital.
[Type text] Page 52
Issue Opens on: March 11, 2004 Issue Closes on: March 18, 2004 Offer price Rs.315. The offer is being made through the 100% book building process.
SALIENT FEATURES OF THE ISSUE IssuerBiocon India owned by American International Group Inc is the largest biotechnology enterprise in India was the first biotech company in India to come up with an IPO. It has a market share of around
Size of issueThe issue size includes 10,000,000 equity shares of Rs.5/-each at a price of Rs [270-315] in cash aggregating to Rs [2700mn- 3150] mn. The issue constitutes 10% of the fully diluted post issue paid up capital. The ceiling of allocation of equity share capital to various bidders is as follows: Qualified Institutional Bidders 60% Non Institutional Bidders 15% Retail Individual Bidders 25%
Issue Price The offer is being made through the 100% book building process. The price band was Rs [270-315]. The offer price was fixed at the higher end of the price band at Rs315 per share of Rs 5 each.
[Type text]
Page 53
Lead Manager to the Issue: DSP Merrill Lynch Ltd, Kotak Company Capital Ltd., Karvy Consultants Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd.
Registrar to the issue: Karvy Consultants Ltd
Bankers to the IssueHSBC, State Bank of India, Canara Bank
ListingBSE and NSE stock exchange
Competitive strengthsBiocon Ltd is the largest biotechnology enterprise in India with presence in biopharmaceuticals, enzymes, Custom research and clinical research activities. The company believes in non infringing processes for the manufacture of products targeted at the therapeutic categories of cardiovascular, immunosuppressant, anti-diabetics and oncology.
Basis for Allotment Discretionary in case of Qualified Institutional Buyers and proportionate in case of Non-Institutional Buyers and Retail Investors.
[Type text]
Page 54
Maximum and Minimum Bid size For retail investors- The minimum bid for the Equity shares should be in multiples of [] and the amount should not exceed Rs.50000.The maximum bid should be in multiples of [] and should not exceed Rs.50000. For Non-Institutional Buyers and Qualified Institutional Buyers- The minimum bid for the Equity shares should be in multiples of [] and the amount should exceed Rs.50000. The maximum bid should not exceed the size of the issue.
Who can Apply Wholesale investors-Public Financial Institutions as specified in the Sec 4A of the Companies Act, FII`s registered with SEBI, Mutual Funds, Industrial Development Corporation, insurance companies etc. Retail Investors- Resident Individuals, NRI`s and HUF`s in the name of the Karta
Allotment mode Compulsory demat mode
Valuation Biocon Ltd is the largest biotechnology enterprise in India with presence in biopharmaceuticals, enzymes, Custom research and clinical research activities. Biocon is the largest Indian Biotechnology company in terms of fiscal 2003 revenue according to Indias Association of Biotechnology Led Enterprises. It is the first Indian Biotechnology company to come up with a public issue.
[Type text]
Page 55
The Total Consolidated Operating Income and Net Profit were Rs.2819.9 million and Rs422.3 million respectively in fiscal 2003. In the first 9 months of fiscal year 2004 our Total Consolidated Operating Income and Net Profit Rs.3977.4 million and Rs.949.4 million respectively The scrip, currently available at the P/E of (23.1 26.9) x FY04P earnings of Rs11.7. The P/E is relatively comparable to peer group P/E average of 25.1. Although Biocon is expensive at the current price, it is a good buy taking into consideration its promising future prospects.
Scrip Details.
Market Capital (Rs .Cr.) (at Min. Offer Price) P/E (x) FY04 (annualized) Market Capital/Sales (x) FY04 (annualized) Ent.Val/EBIT(x) FY04 (annualized) Div./Share (Rs.) FY04E Div Yield (%)FY04E
270-315
19.1-22.3 5.1-5.9 22.6-26.3 -
[Type text]
Page 56
Peer Comparison
COMPANY
RANK
REVENUE (Crore Rs)
Biocon India Panacea Biotec Wipro Health Science Wockhardt Haffkine Bio Eli Lily Nicholas Piramal Krebs Biochem Bharat Serums Indian Immunologicals
1 2 3 4 5 6 7 8 9 10
255 169.88 98.55 74 72.90 71.31 70.64 64.16 58 55.31
Objects of the Offer Plans to expand capacity at Rs 400cr. Develop biological business Expand capability in drug business Leverage position in the export market Continue to target APIs for high value growth Launch branded formulations on the domestic market Grow business through strategic partnership and M&A
[Type text]
Page 57
ISSUE ANALYSIS
Performance Evaluation Day One- 11 March 2004, Biocon Ltd. IPO gets oversubscribed The long awaited issue of Biocon opened on 11 March. The issue got oversubscribed within five minutes of the opening.This is the first issue by a biotechnology company; the company plans to list on the BSE and NSE. Biocon had a fixed price band between Rs 270 and Rs 315 per equity share of a face value of Rs 5, for its IPO with most of the bids being submitted at Rs 315, the upper end of the price band.
Day two-Biocon IPO gets stronger The IPO of Biocon Ltd was oversubscribed 10.6 times on Thursday, when it opened, according to its bankers. Strong demand by institutional investors saw the issue get an unprecedented four times the response for one crore shares of face value Rs 5 each within five minutes of opening. The scrip was in demand
March 18 Biocon IPO A hit with investors The countrys first biotech IPO by Biocon India received a handsome response from investors, with the issue being oversubscribed 33 times. The company received bids for more than 330m shares versus about 10m on offer, with most of the bids being submitted at Rs 315, the upper end of the price band. Biocon IPO generates overwhelming response. Total demand in excess of Rs.10,000 crores. There was large scale participation by QIB`s, HNI`s and Retail Investors
[Type text]
Page 58
POST ISSUE ANALYSIS

Biocon IPO generates overwhelming response The success of Biocons IPO set the benchmark for future IPOs in the sector. For it is the No.1 biotech company in the country and has strong fundamentals. It is also the first biotech company to go public CRISIL, Indias leading credit rating agency, has maintained its P1+ rating for the Rs 20 crore short-term debt programmes. Several biotech companies plan to go public. Biocon, Shantha Biotechnics, Amreshwara Agri Bio, Bharat Biotech, etc. are looking to go IPO. Biocon with its first mover advantage is well positioned to grab the huge opportunity in the global biopharma market once regulatory norms for biotech are clearly stated by the USFDA for regulated markets in the next 612 months. This will further boost the recent high growth rates in the revenues and earnings. Also, the company is well positioned to build strong relationships with existing global players by offering them contract research and manufacturing service. At the higher end price of the offer band of Rs. 315, the stock is offered at a P/E of 22x on annualized earnings of Rs. 14.1 for FY04.
[Type text]
Page 59
ADDITIONAL INFORMATION
Shareholding pattern
Share Holding Pattern Kiran Mazumdar John Shaw Glentec International AIG Asian Opportunity Fund Others Public
Pre Offer
Post Offer
44.05 0.78 23.55 10.00 21.62 -
39.64 0.70 21.19 9.00 19.47 10.00
[Type text]
Page 60
Financials (Rs.Crores) Revenue Other Income Total Expenditure PBIDT Interest Expenditure Depreciation PBT Tax- Current Tax- Deferred PAT Share Capital 6.2 21.73 3.56 3.65 14.52 1.50 7.59 27.74 4.04 2.21 21.49 1.82 59.04 11.71 48.92 8.90 4.71 35.31 1.84 95.95 9.81 107.66 20.17 1.38 86.11 45.00 9.57 FY01 122.31 0.21 91.1 32.49 4.56 FY02 160.62 3.33 124.91 40.02 4.69 FY03 254.24 0.76 189.99 65.53 4.90 9MFYO4 371.22 0.66 253.77 118.68 1.21
EPS (Rs.) at FV 48.40 Rs. 5.0 EBIDTA Margin 26%
24%
26%
32%
Bio pharmaceuticals contribute 81% of total turnover, enzymes 12% and rest is contributed by customized research. For the first 9 months of FY04, exports of biopharmaceuticals and enzymes accounted for56% of the total turnover and grew sharply toRs.208.36 compared to Rs.110.08crs in the previous full year, largely driven by exports to US and Europe. Better realization from export resulted in operating margin growth of 7bps in 9MFY04 over
[Type text]
Page 61
FY03. Robust product pipeline ensures sustenance of companys high growth rate. It has plannedRs.400crs expansion over next three years.
The current price of a Biocon Share is Rs503. The stock has risen by 188%. This shows that Biocon is a good buy and good profitable company which is worth investing.
[Type text]
Page 62
Registered Office: Bombay House, 24 Homi Mody Street, Fort, Mumbai 400001, India Tel: (91 22) 5665 8282, Fax: (91 22) 5665 8080 Email: tcs@tata.com
Public Issue of 55,452,600 Equity Shares of Re. 1 each for cash at a price of Rs.[_ ] per Equity Share aggregating Rs.[_ ] million, consisting of a Fresh Issue of 22,775,000 Equity Shares by Tata Consultancy Services Limited and an Offer for Sale of 32,677,600 Equity Shares by Tata Sons
GENERAL RISK Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Offer. For taking an investment decision, investors must rely on their own examination of TCS Limited and the Offer including the risks involved. The Equity Shares offered in the Offer have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus.
ISSUERS ABSOLUTE RESPONSIBILITY TCS Limited, having made all reasonable inquiries, accepts responsibility for, and confirms that this Red Herring Prospectus contains all information
[Type text] Page 63
with regard to the Company and the Offer, which is material in the context of the Offer, that the information contained in this Red Herring Prospectus is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING The Equity Shares are proposed to be listed on the National Stock Exchange of India Limited (Designated Stock Exchange) and The Stock Exchange, Mumbai and TCS Limited has received approvals from these stock exchanges for the listing of its Equity Shares
BOOK RUNNING LEAD MANAGERS (BRLMs) JM Morgan Stanley Private Limited 141, Maker Chambers III, Nariman Point, Mumbai 400 021 Tel.: (91 22) 1600 22 0004 / 5630 3030 Fax: (91 22) 5630 1694 Email: tcsipo@jmmorganstanley.com
DSP Merrill Lynch Limited Mafatlal Centre, 10th Floor, Nariman Point, Mumbai - 400 021 Tel.: (91 22) 5632 8000 Fax: (91 22) 2204 8518
[Type text] Page 64
JP Morgan India Private Limited Mafatlal Centre, 9th Floor, Nariman Point, Mumbai - 400 021 Tel.: (91 22) 2285 5666 Fax: (91 22) 5639 3091 E-mail: tcs.ipo@jpmorgan.com
REGISTRAR TO THE OFFER Karvy Computershare Private Limited Unit: TCS IPO Karvy House, 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034 Tel.: (91 40) 2331 2454, Fax: (91 40) 2331 1968
OFFER PROGRAMME BID/OFFER OPENS ON JULY 29, 2004 BID/OFFER CLOSES ON AUGUST 5, 2004
[Type text]
Page 65
PART 1
General Information Public Issue of 55,452,600 Equity Shares of Re. 1 each for cash at a price of Rs.[_ ] per Equity Share aggregating Rs.[_ ] million, consisting of a Fresh Issue of 22,775,000 Equity Shares and an Offer for Sale of 32,677,600 Equity Shares by Tata Sons Limited and certain other shareholders of TCS Limited 5,545,260 Equity Shares will be reserved in the Offer for subscription by employees and directors in India of the TCS Division. The face value of the Equity Shares is Re. 1 and the Offer Price is [ _ ] times of the face value. It is a 100% Book-Built Issue and the price band is Rs. 775 TO Rs. 900 per Equity Share of Re.1 each.
Authority for the Offer The Fresh Issue for the Equity Shares in this Offer by TCS Limited has been authorized by the resolution passed by the Board Of directors passed at their meeting held on April 37, 1004 subject to the Companies Act. The
shareholders approved the Fresh Issue for the Equity Shares at the AGM of the directors on May 5, 2004; a committee of the Board approved the Fresh issue of 22,775,000 Equity Shares by TCS Limited at its meeting held on June 9 2004.
Disclaimer Clause As required a copy of the Red Herring prospectus has been submitted to SEBI. Its is to be distinctly understood that the submission to SEBI should not be deemed or construed that the same has been cleared by SEBI.SEBI
[Type text] Page 66
does not take any responsibility for the financial soundness of any scheme or the project for which the offer to be made or for the correctness of the statements made or opinions expressed in the Red Herring prospectus the Book Running Lead Managers, JM Morgan Stanley Pvt Ltd. DSP Merrill Lynch Ltd have certified that the disclosures made in the Red Herring prospectus are generally adequate and in conformity with SEBI guidelines and investor protection.
Filing A copy of the Red Herring prospectus has been delivered to the registrar of companies Maharashtra located at Mumbai .A copy of the Red Herring prospectus has been filed with SEBI at Ground Floor, Mittal Court, A Wing, Nariman Point Mumbai 400021
Listing Applications have been made to NSE and BSE for permission to deal in and for an official quotation of the Equity Shares. If the permission to deal is not granted then the company will repay without interest all the monies received from the applicants in pursuant of the prospectus.
Eligibility of the Company to enter the capital markets TCS Limited satisfies the eligibility norms for companies issuing securities in terms of Clause 2.2.2 of the DIP Guidelines as described below: The Offer is made through the 100% Book-Building Process wherein minimum of 50% of the Net Offer to public would be allotted to Qualified Institutional Buyers
[Type text]
Page 67
The post-issue capital of TCS Limited shall be more than Rs. 100 million. The TCS Division meets the track record criteria specified in clause 2.2.2B (iv) of the SEBI Guidelines The TCS Division has a track record of distributable profits in terms of Section 205 of the Companies Act for at least three out of the immediately preceding five years; The TCS Division had a net worth of at least Rs. 10 million in each of the preceding three full years of 12 months each The aggregate of the proposed Offer and all previous issues made in the same financial year in terms of size does not exceed five times the pre-issue net worth of TCS Division as per its audited balance sheet under Indian GAAP as of March 31, 2004.
Prohibition by SEBI The Company, its subsidiaries, its affiliates, its directors, its promoter, Tata Sons, other Companies with which its directors are associated have not been prohibited from accessing the capital markets by SEBI. None of the Directors or the promoters has been prohibited from accessing the capital markets by SEBI
Equity Shares in Dematerialized Form As per the provisions of the Depositories Act the Equity Shares of the Company can be held in the dematerialized form. All investors can seek allotment only in dematerialized mode.
[Type text]
Page 68
Impersonation Under sec 68A of Companies Act, any person who makes in a fictitious name an application to the company for acquiring or subscribing for any shares or otherwise induces a company to allot or transfer of shares therein to him or any other person in a fictitious name shall be punishable with imprisonment for a term which can extend up till 5 years.
Minimum Subscription If the company does not receive the Minimum Subscription of 90%of the Fresh issue amount including development of underwriters within 60 days from the Bid closing date they would refund the entire subscription amount received .If there is a delay of more than 8 days they are liable to pay the amount along with interest.
Letters of Allotment or Refund The letters of allotment or refund orders shall be sent through registered post or speed post. Allotment of equity shares shall me made only in dematerialized form within 15days of the offer closing date. Despatch of refund orders shall be made within 15 days of the offer closing date. The company would pay and interest of 15% if the if refund orders have not been dispatched or demat credits have not been made within the specified time period.
[Type text]
Page 69
ISSUE MANAGEMENT TEAM Book Running Lead Managers (BRLMS) JM Morgan Stanley Private Limited 141, Maker Chambers III, Nariman Point, Mumbai 400 021 Tel.: (91 22) 1600 22 0004 / 5630 3030 Fax: (91 22) 5630 1694 Email: tcsipo@jmmorganstanley.com
Registrar to Offer Karvy Computershare Private Limited Unit: TCS IPO Karvy House, 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034 Tel.: (91 40) 2331 2454, Fax: (91 40) 2331 1968
Bankers to the Offer and Escrow Collection Banks State Bank of India (New issue division) Mumbai Main Branch, Mumbai Samachar Marg, Fort, Mumbai 400001
[Type text]
Page 70
PART 2
Terms of the Present Issue TCS is coming with a public issue of 55,452,600 Equity Shares or Re.1 each for cash at a price Rs [.] per share aggregating to Rs. [.] consisting a fresh issue of 2275000 Equity Shares or Re.1 each by Tata consultancy Services Limited (TCS) and an offer sale or 32677600 Equity Shares by Tata Sons Limited and certain other shareholders of TCS Limited.
Rights of the Equity Shareholder. Right to receive dividend Right to attend general meetings and exercise voting powers. Right to receive offers of Rights Shares and allot Bonus Shares Right to receive surplus on liquidation
Face Value and Offer price The Equity Shares having face value of Re 1 each are being offered at Rs[.] per equity Share. At any given point there shall be only one denomination for the Equity Shares
Ranking of Equity Shares The Equity Shares being offered shall be subject to the provisions of the Companies Act, the Memorandum of Association and Articles of Association of TCS Limited and shall rank pari passu with the existing Equity Shares of the Company including in respect of the rights to receive dividends.
[Type text] Page 71
Market Lot As trading in the Equity Shares is compulsorily in dematerialized mode, the tradeable lot is one Equity Share. Allotment of Equity Shares will be done in electronics form, subject to minimum allotment of (7) Equity Shares.
Nomination Facility to Investor Since the allotment of the Equity Shares will be made only in the dematerialized form, there is no need to make a separate nomination with the company. Nominations registered with respective depository participant of the applicant would prevail.
Payment by Stockinvest In terms of RBI circular dated November 5, 2003 the Stockinvest Scheme has been withdrawn with immediate effect. Hence payment through stockinvest would not be accepted in this offer.
PAN or GIR Number Where the maximum Bid for Equity Shares is Rs50000 or more each of the Bidders should mention his PAN number or when the same has not been allotted GIR number.
OFFER PROCEDURE
Book Building Procedure The offer is being made through 100%Book Building Scheme wherein at least 60% of the net offer shall be allocated to Qualified Institutional Buyers. Not less than 15% of the Net Offer will be available for allocation on a
[Type text] Page 72
proportionate basis to Non-Institutional Investors and the remaining 25% of the net offer shall be available for allocation on a proportionate basis to Retail Individual Bidders.
Who Can Bid Indian National resident in India who is major HUF or in the name of Karta Indian Financial Institutions, commercial banks, regional rural banks co-operative banks Foreign Venture Capital Investors registered with SEBI State industrial development corporation Trusts registered under the Societies registration act NRIs AND FIIs Insurance Companies
Minimum and Maximum Bid size For Retail Individual Bidders-the bid must be for a minimum of seven Equity Shares and to ensure that the amount payable by the bidder should not be more than Rs. 50000.the Cut-Off option is available only to Retail Individual Investors indicating their agreement to bid and purchase the Equity Shares at the Final Offer price at the end of the Book Building process. For Non-Institutional Bidders and QIB Bidders-the bid must be for a minimum of seven Equity Shares and to ensure that the amount payable by the bidder should be more than Rs. 50000 Non-Institutional Bidders and QIB Bidders are not allowed to bid at Cut-Off
[Type text]
Page 73
Bidding Process TCS Limited shall declare the Issue opening date and closing date. Each Bid cum Application form will give the Bidder the choice to Bid at Different Price Levels i.e. up to three price levels. After determination of the offer price, the maximum number of Equity Shares bid for by a bidder at or above the Offer Price will be considered for allocation and the rest of the bid irrespective of the price will become automatically invalid
Bid at Different Price Levels The Price Band has been fixed at Rs.775 to Rs.900 per Equity Share Rs.775 being the Floor Price and Rs900 being the Cap Price. Retail Individual Bidders can bid at Cut-Off if the Bid is not exceeding Rs50000. Bidding at Cut-Off is prohibited for Non-Institutional Bidders and QIB Bidders, such bids if received will be rejected.
Escrow Mechanism TCS Limited shall open account with Escrow Collection Banks in whose favour the bidder shall make the cheque or demand draft for the bid. All the cheques received for the bid will be deposited in this account.
Account Details It is mandatory for all Bidders to get their shares in dematerialized form.
Terms of Payment The Company shall open an Escrow Account with the Escrow Collection banks for the Collection of Bid amount payable upon submission of the Bid-
[Type text]
Page 74
Cum Application form and for the amount payable pursuant to allocation in the offer.
Right to Reject Bids The Company and TATA Sons have the right to reject Bids without assigning any reason thereof for QIBs and in case of Employee reservation Portion. Incase of Non-Institutional Bidders and Retail Individual Bidders the Company and TATA Sons have the right to reject Bids only on technical grounds.
Interest on Refund of excess Bid Amount The Company and the Selling Shareholders shall pay interest at the rate of 15% per annum on the excess Bid Amount received by us if refund orders are not dispatched within 15 days from the Bid/Offer Closing Date as per the guidelines issued by the Government of India and Ministry of Finance.
Utilization of Offer Proceeds The Board of Directors of the Company certifies that: _ all monies received out of the Fresh Issue of Equity Shares to the public shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act; _ Details of all monies utilized out of the Fresh Issue referred above shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies have been utilized; _ Details of all unutilized monies out of the Fresh Issue, if any, shall be disclosed under the appropriate separate head in the balance sheet of the Company indicating the form in which such unutilized monies have been
[Type text] Page 75
invested. The Company and the Selling Shareholders shall not have any recourse to the Offer proceeds until the approval for trading the Equity Shares is received from the Stock Exchanges. The Company shall transfer to Tata Sons the proceeds from the Offer for Sale, Net of expenses, on the same being permitted to be released in accordance with applicable laws.
Objects of the Offer The object of the offer is to create a public trading market for the equity shares of the company by listing them on the stock exchange TCS believes that by listing the shares on the stock exchange their visibility and brand name will be enhanced and enable them to use their share for acquisitions. The offer will also provide liquidity to existing shareholders. They intend to use the net proceeds of the Fresh Issue to pay transfer consideration of Rs 23000 million to Tata Sons pursuant to the scheme. If the net proceeds of the fresh issue are less than 23000 million than they will pay either borrowing or internal accrual or will pay interest at rate of 6% until the payment of the remaining consideration.
[Type text]
Page 76
PART 3
CAPITAL STRUCTURE
SHARE CAPITAL AS OF JULY 15, 2004 A Authorized Capital 600,000,000 Equity Shares of Re.1 each B Issued, Subscribed and Paid-up Capital 455,500,029 Equity Shares of Re.1 each fully paid up C Present Offer to the Public in Pursuant to the Red Herring Prospectus 55,452,600 Equity Shares of Re.1 each Out of the Above: Fresh Issue a)22,775,000 Equity Shares of Re.1 each Offer for Sale b)32,677,600 Equity Shares of Re.1 each D Employee Reservation Portion (1) 5,545,260 Equity Shares of Re.1 each E Net Offer to the Public 49,907,304 Equity Shares of Re.1 each F Green Shoe Option Pursuant to the Red Herring Prospectus 8,317,880 Equity Shares of Re.1 each G Equity Capital after the Offer 478,275,029 Equity Shares of Re.1 each H Share Premium Account Before the Offer After the Offer Aggregate Nominal value 600.0 455.5 Aggregate value at Offer Price (Rs. Million)
22.8 32.6 5.5 49.9
[ ] [ ] [ ] [ ]
8.3 478.3 0 [ ]
[ ]
[Type text]
Page 77
CONCLUSION
The Indian initial public offer (IPO) market has always had more than its fair share of doomsayers Right from the Maruti issue, which pundits decried as being overpriced, to the ONGC and TCS issues, where the huge sizes of the offerings drew predictions of calamitous effects on the secondary markets, the opinions of the experts have proved to be wide off the mark. Not only did the mega issues sail through, but the secondary markets proved to be far more resilient than anybody had anticipated. The data show that as much as Rs. 23,904 Crore has been raised from the primary market in the current calendar year, making it obvious that the Indian investor has far more appetite for equities than most people realise. Most of the money has been raised by big companies with a long-term track record. A substantial number of issuesbarring that of TCSalso happened during the early part of the year, before the markets got the shivers. The heavy oversubscriptions in many cases can also be traced to the availability of bank finance for IPO investment. Nevertheless, there is no denying the enormous interest retail and other investors have shown in the primary market, perhaps even more so than in the secondary one. This interest has been sustained despite the lack of bounce in the secondary market and is not confined to the big issues; even smaller issues have sailed through with large oversubscriptions. If investors are gung-ho about IPOs, there are several reasons for it.
[Type text]
Page 78
Unlike earlier IPO booms, this one is being driven by a much better quality of offering. Missing in action so far are the fly-by-night operators of the 1990s who made public offers only to collect the money and vanish. Next, most recent IPOs have resulted in gains on listing for the investor. The listing gains have probably initiated a kind of virtuous cycle, tempting investors who have already made money to return to the primary market. There is also reason to believe that companies are pricing their issues less aggressively this time, either due to general concerns about a volatile market, or because of a deliberate effort to leave something on the table for all investors. Companies have been quick to take advantage of the investor interest in IPOs, and banks, broking houses, retail outfits, media houses and government companies such as NTPC and Power Finance Corporation are lining up issues Even mutual funds have got into the act, and are tailoring their offerings to match current market fanciesmid-cap funds, dividend yield funds, and what-have-you. If the government wants to get some money into its kitty through disinvestment programmes, this is the time to make a dash for it.
[Type text]
Page 79
BIBLIOGRAPHY Books and Magazine Indian Capital Markets Financial management Prasanna Chandra Business World The Chartered AccountantJournal of Institute of Chartered Accountants in India
Websites www.indiainfoline.com www.sify.com www.moneycontrol.com www.sebi.gov.in www.domain-b.com www.business-standard.com www.google.com
[Type text]
Page 80
ANNEXURE
[Type text]
Page 81

Final Ipo in India

Загружено:

Сведения о документе

Исходное описание:

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Final Ipo in India

Загружено:

Авторское право:

Доступные форматы

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

FINANCIAL MARKETS AND THE IPO

Initial Public Offering In India

1. The Primary Market 2. The Secondary Market

Initial Public Offering In India

PRIMARY MARKET-GENESIS AND GROWTH

Initial Public Offering In India

GROWTH OF IPOs IN INDIA

HISTORY OF PRIMARY MARKET

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Issue Date 05/08/2004 28/04/2004 19/04/2004 07/04/2004

Issue Price 850 70 110 175

Current Price 987.50 87.55 136.20 459.60

% Change 16.17 25.07 23.81 162.62

18/03/2004 13/03/2004 08/03/2004

503.85 703.20 53.05

59.95 -1.30 231.56

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

BOOK BULIDING THE LATEST AVTAAR OF PRICE DISOVERY

Initial Public Offering In India

Initial Public Offering In India

Fixed Price Process

Book Building Process

everyday as the book is built. only after

Payment if made at the Payment times of subscription allocation.

wherein refund is given

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

COST OF PUBLIC ISSUE.

Initial Public Offering In India

Initial Public Offering In India

BRIEF NOTE ON INTERMEDIARIES

The following are the important intermediaries involved in the process-

Initial Public Offering In India

No of Lead Managers 2 3 4 5 1 or more as agreed by the board

Initial Public Offering In India

Initial Public Offering In India

Initial Public Offering In India

Issue amount upto Rs5 lakhs Issue amount exceeding %

Initial Public Offering In India

Initial Public Offering In India

SEBI AND IPO

Initial Public Offering In India

Initial Public Offering In India

INVESTOR PROTECTION NORMS.

Initial Public Offering In India

Websites www.indiainfoline.com www.sify.com www.moneycontrol.com www.sebi.gov.in www.domain-b.com www.business-standard.com www.google.com