Draft copy Submitted By Pradeepkumar t

EXECUTIVE SUMMARY
As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the current industry, mainly because of India being a developing country and lot of growth in various sectors which leads a country to ultimate success. And when we talk about countrys growth which is dependent on the kind of work and how much importance to which sector is given. And when we say or talk about industries growth which leads the economy of country has to be balanced and given proper finance so as to reach the levels to fulfill the needs of the society. And industries which have massive outflow of work and a big portfolio then its very difficult for any company to work with limited finance and this is where IPO plays an important role. This report trying to help to find out IPO performance during 2010, what are the companies which issued during thisyear. How and what are the steps taken by the companies before going for any IPO and also the role of (SEBI) Securities and Exchange Board of India the BSE and NSE , what are primary and secondary markets and also the important terms related to IPO. It gives us idea of how IPO is driven in the market and what are various factors taken into consideration before going for an IPO. And it also tells us
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how we can more or less judge a good IPO. Then we all know that scams have always been a part of any sector you go in for which are covered in it and also few recommendations are given for the same. It also gives us some idea about what are the expenses that a company undertakes during an IPO. IPO has been one of the most important generators of funds for the small companies making them big and given a new vision in past and it is still continuing its work and also for many coming years.

Chapter

INTRODUCTION

INTRODUCTION TO IPO IPO stands for Initial Public Offering and means the new offer of shares from a company which was previously unlisted. This is done by offering those shares to the public, which were held by the promoters or the private investors prior to the IPO. In the case when other investors or Promoter held the shares the stake holding comes down to the extent their shares are offered to the public. In other cases new shares are issued to the public and the shares, which are with the promoters stay with them. In both cases the share of the promoters in the total capital comes down. For example say there are 100 shares in a company and 50 of these are offered to the public in an IPO then in such a case the promoters stake in the company comes down from 100% to 50%. In another case the company issues 50 additional shares to the public and the stake of the promoter comes down from 100% to 67%. Normally in an IPO the shares are issued at a discount to what is considered their intrinsic value and thats why investors keenly await IPOs and make money on most of them. IPO are generally priced at a discount, which means that if the intrinsic value of a share is perceived to be Rs.100 the shares will be offered at a price, which is lesser than Rs.100 say
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Rs.80 during the IPO. When the stock actually lists in the market it will list closer to Rs.100. The difference between the two prices is known as Listing Gains, which an investor makes when investing in IPO and making money at the listing of the IPO. A Bullish Market gives IPO investors a clear opportunity to achieve long term targets in a short term phase.

What is an IPO An IPO is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO. Companies fall into two broad categories: private and public. A privately held company has fewer shareholders and its owners don't have to disclose much information about the company. Anybody can go out and incorporate a company: just put in some money, file the right legal documents and follow the reporting rules of your jurisdiction. Most small businesses are privately held. But large companies can be private too. Did you know that IKEA, Domino's Pizza and Hallmark Cards are all privately held?

It usually isn't possible to buy shares in a private company. You can approach the owners about investing, but they're not obligated to sell you
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anything. Public companies, on the other hand, have sold at least a portion of themselves to the public and trade on a stock exchange. This is why doing an IPO is also referred to a going public. Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. In the United States, public companies report to the Securities and Exchange Commission (SEC). In other countries, public companies are overseen by governing bodies similar to the SEC. From an investor's standpoint, the most exciting thing about a public company is that the stock is traded in the open market, like any other commodity. If you have the cash, you can invest. The CEO could hate your guts, but there's nothing he or she could do to stop you from buying stock.

The first sale of stock by a private company to the public, IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the
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company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value.

Primary and Secondary markets In the primary market securities are issued to the public and the proceeds go to the issuing company. Secondary market is term used for stock exchanges, where stocks are bought and sold after they are issued to the public. PRIMARY MARKET The first time that a companys shares are issued to the public, it is by a process called the initial public offering (IPO). In an IPO the company offloads a certain percentage of its total shares to the public at a certain price. Most IPOS these days do not have a fixed offer price. Instead they follow a method called BOOK BUILDIN PROCESS, where the offer price is placed in a band or a range with the highest and the lowest value (refer to the newspaper clipping on the page). The public can bid for the shares at any price in the band specified. Once the bids come in, the company evaluates all the bids and decides on an offer price in that range. After the

offer price is fixed, the company allots its shares to the people who had applied for its shares or returns them their money.

SECONDRY MARKET Once the offer price is fixed and the shares are issued to the people, stock exchanges facilitate the trading of shares for the general public. Once a stock is listed on an exchange, people can start trading in its shares. In a stock exchange the existing shareholders sell their shares to anyone who is willing to buy them at a price agreeable to both parties. Individuals cannot buy or sell shares in a stock exchange directly; they have to execute their transaction through authorized members of the stock exchange who are also called STOCK BROKERS.

Why Go Public?
Basically, going public (or participating in an "initial public offering" or IPO) is the process in which a business owned by one or several individuals is converted into a business owned by many. It involves the offering of part ownership of the company to the public through the sale of debt or more commonly, equity securities (stock).

Going public raises cash and usually a lot of it. Being publicly traded also opens many financial doors: Because of the increased scrutiny, public companies can

usually get better rates when they issue debt. As long as there is market demand, a public company can

always issue more stock. Thus, mergers and acquisitions are easier to do because stock can be issued as part of the deal. Trading in the open markets means liquidity. This makes it

possible to implement things like employee stock ownership plans, which help to attract top talent. Being on a major stock exchange carries a considerable amount of prestige. In the past, only private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get listed. The internet boom changed all this. Firms no longer needed strong financials and a solid history to go public. Instead, IPOs were done by smaller startups seeking to expand their businesses. There's nothing wrong with wanting to expand, but most of these firms had never made a profit and didn't plan on being profitable any time soon. Founded on venture capital funding, they spent like Texans trying to generate enough excitement to make it to the market before burning through all their cash. In
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cases like this, companies might be suspected of doing an IPO just to make the founders rich. This is known as an exit strategy, implying that there's no desire to stick around and create value for shareholders. The IPO then becomes the end of the road rather than the beginning. How can this happen? Remember: an IPO is just selling stock. It's all about the sales job. If you can convince people to buy stock in your company, you can raise a lot of money.

Getting In On an IPO
The Underwriting Process Getting a piece of a hot IPO is very difficult, if not impossible. To understand why, we need to know how an IPO is done, a process known as underwriting. When a company wants to go public, the first thing it does is hire an investment bank. A company could theoretically sell its shares on its own, but realistically, an investment bank is required - it's just the way Wall Street works. Underwriting is the process of raising money by either debt or equity (in this case we are referring to equity). You can think of underwriters as middlemen between companies and the investing public. The biggest underwriters are Goldman Sachs, Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan Stanley.

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The company and the investment bank will first meet to negotiate the deal. Items usually discussed include the amount of money a company will raise, the type of securities to be issued and all the details in the underwriting agreement. The deal can be structured in a variety of ways. For example, in a firm commitment, the underwriter guarantees that a certain amount will be raised by buying the entire offer and then reselling to the public. In a best efforts agreement, however, the underwriter sells securities for the company but doesn't guarantee the amount raised. Also, investment banks are hesitant toshoulder all the risk of an offering. Instead, they form a syndicate of underwriters. One underwriter leads the syndicate and the others sell a part of the issue. Once all sides agree to a deal, the investment bank puts together a registration statement to be filed with the SEC. This document contains information about the offering as well as company info such as financial statements, management background, any legal problems, where the money is to be used and insider holdings. The SEC then requires a cooling off period, in which they investigate and make sure all material information has been disclosed. Once the SEC approves the offering, a date (the effective date) is set when the stock will be offered to the public. During the cooling off period the underwriter puts together what is known as the red herring. This is an initial prospectus containing all the information about the company except for the offer price and the effective
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date, which aren't known at that time. With the red herring in hand, the underwriter and company attempt to hype and build up interest for the issue. They go on a road show - also known as the "dog and pony show" - where the big institutional investors are courted. As the effective date approaches, the underwriter and company sit down and decide on the price. This isn't an easy decision: it depends on the company, the success of the road show and, most importantly, current market conditions. Of course, it's in both parties' interest to get as much as possible. Finally, the securities are sold on the stock market and the money is collected from investors. As you can see, the road to an IPO is a long and complicated one. You may have noticed that individual investors aren't involved until the very end. This is because small investors aren't the target market. They don't have the cash and, therefore, hold little interest for the underwriters. If underwriters think an IPO will be successful, they'll usually pad the pockets of their favorite institutional client with shares at the IPO price. The only way for you to get shares (known as an IPO allocation) is to have an account with one of the investment banks that is part of the underwriting syndicate. But don't expect to open an account with $1,000 and be showered with an allocation. You need to be a frequently trading client with a large account to get in on a hot IPO.
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IPO ADVANTAGES AND DISADVANTAGES The decision to take a company public in the form of an initial public offering (IPO) should not be considered lightly. There are several advantages and disadvantages to being a public company, which should thoroughly be considered. This memorandum will discuss the advantages and disadvantages of conducting an IPO and will briefly discuss the steps to be taken to register an offering for sale to the public. The purpose of this memorandum is to provide a thumbnail sketch of the process. The reader should understand that the process is very time consuming and complicated and companies should undertake thisprocess only after serious consideration of the advantages and disadvantages and discussions with qualified advisors.

Advantages of going public Increased Capital

A public offering will allow a company to raise capital to use for various corporate purposes such as working capital, acquisitions, research and development, marketing, and expanding plant and equipment. Liquidity
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Once shares of a company are traded on a public exchange, those shares have a market value and can be resold. This allows a company to attract and retain employees by offering stock incentive packages to those employees. Moreover, it also provides investors in the company the option to trade their shares thus enhancing investor confidence. Increased Prestige

Public companies often are better known and more visible than private companies, this enables them to obtain a larger market for their goods or services. Public companies are able to have access to larger pools of capital as well as different types of capital. Valuation

Public trading of a company's shares sets a value for the company that is set by the public market and not through more subjective standards set by a private valuator. This is helpful for a company that is looking for a merger or acquisition. It also allows the shareholders to know the value of the shares. Increased wealth

The founders of the company often have the sense of increased wealth as a result of the IPO. Prior to the IPO these shares were illiquid and had a more subjective price. These shares now have an ascertainable price and after any lockup period these shares may be sold to the public, subject to limitations of federal and state securities laws.
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Disadvantages of going Public Time and Expense

Conducting an IPO is time consuming and expensive. A successful IPO can take up to a year or more to complete and a company can expect to spend several hundreds of thousands of dollars on attorneys, accountants, and printers. In addition, the underwriter's fees can range from 3% to 10% of the value of the offering. Due to the time and expense of preparation of the IPO, many companies simply cannot afford the time or spare the expense of preparing the IPO. Disclosure

The SEC disclosure rules are very extensive. Once a company is a reporting company it must provide information regarding compensation of senior management, transactions with parties related to the company, conflicts of interest, competitive positions, how the company intends to develop future products, material contracts, and lawsuits. In addition, once the offering statement is effective, a company will be required to make financial disclosures required by the Securities and Exchange Act of 1934. The 1934 Act requires public companies to file quarterly statements containing unaudited financial statements and audited financial statements annually. These statements must also contain updated information regarding nonfinancial matters similar to information provided in the initial registration statement. This usually entails retaining lawyers and auditors to
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prepare these quarterly and annual statements. In addition, a company must report certain material events as they arise. This information is available to investors, employees, and competitors. Decisions based upon Stock Price

Management's decisions may be effected by the market price of the shares and the feeling that they must get market recognition for the company's stock. Regulatory Review

The Company will be open to review by the SEC to ensure that the company is making the appropriate filings with all relevant disclosures. Falling Stock Price

If the shares of the company's stock fall, the company may lose market confidence, decreased valuation of the company may effect lines of credits, secondary offering pricing, the company's ability to maintain employees, and the personal wealth of insiders and investors. Vulnerability

If a large portion of the company's shares are sold to the public, the company may become a target for a takeover, causing insiders to lose control. A takeover bid may be the result of shareholders being upset with management or corporate raiders looking for an opportunity. Defending a hostile bid can be both expensive and time consuming. Once a company has
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weighed the advantages and disadvantages of being a public company, if it decides that it would like to conduct an IPO it will have to retain a lead

Parameters to judge an IPO

Good investing principles demand that you study the minutes of details prior to investing in an IPO. Here are some parameters you should evaluate: Promoters

Is the company a family run business or is it professionally owned? Even with a family run business what are the credibility and professional qualifications of those managing the company? Do the top level managers have enough experience (of at least 5 years) in the specific type of business? Industry Outlook

The products or services of the company should have a good demand and scope for profit.

Business Plans

Check the progress made in terms of land acquisition, clearances from various departments, purchase of machinery, letter of credits etc. A higher initial investment from the promoters will lead to a higher faith in the organization.
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Financials

Why does the company require the money? Is the company floating more equity than required? What is the debt component? Keep a track on the profits, growth and margins of the previous years. A steady growth rate is the quality of a fundamentally sound company. Check the assumptions the promoters are making and whether these assumptions or expectations sound feasible. Risk Factors

The offer documents will list our specific risk factors such as the companys liabilities, court cases or other litigations. Examine how these factors will affect the operations of the company. Key Names

Every IPO will have lead managers and merchant bankers. You can figure out the track record of the merchant banker through the SEBI website.

Pricing

Compare the companys PER with that of similar companies. With this you can find out the P/E Growth ratio and examine whether its earning projections seem viable.
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Listing

You should have access to the brokers of the stock exchanges where the company will be listing itself.

Understanding the role of intermediaries

Who are the intermediaries in an issue?

Merchant Bankers to the issue or Book Running Lead Managers (BRLM), syndicate members, Registrars to the issue, Bankers to the issue, Auditors of the company, Underwriters to the issue, Solicitors, etc. are the intermediaries to an issue. The issuer discloses the addresses, telephone/fax numbers and email addresses of these intermediaries. In addition to this, the issuer also discloses the details of the compliance officer appointed by the company for the purpose of the issue. Who is eligible to be a BRLM?

A Merchant banker possessing a valid SEBI registration in accordance with the SEBI (Merchant Bankers) Regulations, 1992 is eligible to act as a Book Running Lead Manager to an issue. What is the role of a Lead Manager? (pre and post issue)

In the pre-issue process, the Lead Manager (LM) takes up the due diligence of companys operations/ management/ business plans/ legal etc. Other activities of the LM include drafting and design of Offer documents,
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Prospectus, statutory advertisements and memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, RoC and SEBI including finalization of Prospectus and RoC filing. Appointment of other intermediaries viz., Registrar(s), Printers, Advertising Agency and Bankers to the Offer is also included in the preissue processes. The LM also draws up the various marketing strategies for the issue. The post issue activities including management of escrow accounts, co-ordinate non-institutional allocation, intimation of allocation and dispatch of refunds to bidders etc are performed by the LM. The post Offer activities for the Offer will involve essential follow-up steps, which include the finalization of trading and dealing of instruments and dispatch of

certificates and demat of delivery of shares, with the various agencies connected with the work such as the Registrar(s) to the Offer and Bankers to the Offer and the bank handling refund business. The merchant banker shall be responsible for ensuring that these agencies fulfill their functions and enable it to discharge this responsibility through suitable agreements with the Company. What is the role of a registrar?

The Registrar finalizes the list of eligible allottees after deleting the invalid applications and ensures that the corporate action for crediting of
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shares to the demat accounts of the applicants is done and the dispatch of refund orders to those applicable are sent. The Lead manager co-ordinates with the Registrar to ensure follow up so that that the flow of applications from collecting bank branches, processing of the applications and other matters till the basis of allotment is finalized, dispatch security certificates and refund orders completed and securities listed. What is the role of bankers to the issue?

Bankers to the issue, as the name suggests, carries out all the activities of ensuring that the funds are collected and transferred to the Escrow accounts. The Lead Merchant Banker shall ensure that Bankers to the Issue are appointed in all the mandatory collection centers as specified in DIP Guidelines. The LM also ensures follow-up with bankers to the issue to get quick estimates of collection and advising the issuer about closure of the issue, based on the correct figures. Question on Due diligence The Lead Managers state that they have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators etc. and other materials in connection with the finalization of the offer document pertaining to the said issue; and on the basis of such examination and the discussions with the Company, its Directors and other officers, other agencies, independent
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verification of the statements concerning the objects of the issue, projected profitability, price justification, etc., they state that they have ensured that they are in compliance with SEBI, the Government and any other competent authority in this behalf. Current issues

SEBI simplifies IPO process New Companies to list in 12 days Benefits

Securities and Exchange Board of India (SEBI) has been making significant changes to the the stock market rules and proceedings for quite some time now and especially on the Initial public offering (IPO) front. First, it was Applications Supported by Blocked Amount (ASBA) process which simplified IPO applying procedures and reduced hassles of money refunds. Now, the Sebi has decided to reduce the time between public issue closure and listing to 12 days from existing period of up to 22 days. And, this comes to effect on May 1, 2010. This will greatly help to reduce the reduce instances of manipulation in the prelisting period. Several IPOs had created havoc before and after listing due to big grey market plays. Market operators manipulate the IPO process using the long gap in the listing process.

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Benefits: 1. When IPO Applied thru ASBA process, your whole IPO bid money stays in your bank account and continues to earn the interests till the IPO allotment status is out. After then, only the money for allotted shares will be debited. So, we dont have to worry about the refunds from the IPO registrars for you have paid only the exact amount to the registrar. 2. With shorter IPO listing time, duration for which money locked-in your bank account is shorter. You would see the result of IPO allotments and listings in 12 days and the IPO money locked-in would be released sooner enabling us to apply for more IPOs than before. Also, SEBI believes this shorter duration can bring down the grey market manipulations of IPO listing prices.

VARIOUS TYPES OF ISSUES

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The classification of issues can be described as below:

IPO (For Unlisted Companies) FPO (For Listed Companies) QualifiedISSUESIssue Preferential Placement Private Placement Institutions Private

Righ Publ

(For Listed Companies) (Listed (For unlistedCos.) Offer for Fresh Fresh companies)

Placement ic t

Issue Sale Issue Issu

es

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Classification Issues can be broadly classified into Public Issue, Rights Issue and Private Placement. Public issues can be further classified into Initial Public offerings and further public offerings. In a public offering, the issuer makes an offer for new market investors to join their shareholders family. The issuer company makes detailed disclosures as per the SEBI (DIP) Guidelines, 2000 in its offer document and offers it for subscription. The significant features of each type of Issue are illustrated below: Initial Public Offering IPO is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This provides a listing and trading of the issuers securities. Rights Issue It is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue. This route is best suited for companies who would like to raise capital without diluting stake of its existing shareholders unless they do not intend to subscribe to their entitlements. A private placement is an issue of shares or of convertible securities by a company to a select group of persons under
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Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue. This is a faster way for a company to raise equity capital. Private Placement Private Placement of shares or of convertible securities by a listed company is generally known by name of preferential allotment. A listed company going for preferential allotment has to comply with the requirements contained in Chapter XIII of SEBI (DIP) Guidelines pertaining to preferential allotment in SEBI (DIP) guidelines which interalia includes pricing, disclosures in notice etc., in addition to the requirements specified in the Companies Act. Further public offering FPO is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document. An offer for sale in such scenario is allowed only if it is made to satisfy listing or continuous listing obligations.

Pricing of an IPO The pricing of an ipo is a very critical aspect and has a direst impact on the success or failure of the ipo issue. There area many factors that need
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to be considered while pricing an ipo and on attempt should be made to reach an ipo price that is low enough to generate interest in the market and at the sometimes, it should be high enough to raise sufficient capital for the company. The process for determining an optimal price for the ipo involves the underwriting arranging share purchase commitments from leading institutional investors. Process Once the final prospectus is printed and distributed to investors, company arrangements meets with their investment bank to choose the final offering price and size. The investment bank tries to fix an appropriate price for the ipo depending upon the demand expected and the capital requirements of the company. The pricing of an ipo is a delicate balancing act as the investment firms try to strike a balance between the company and the investors. The lead underwriters is the responsibility to ensure smooth trading of the companys stock. The underwriter is legally allowed to support the pricing of a newly issued stock by either buying them in the market or by selling them short. Ipo , pricing differences

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It is generally noted, that there is alarge difference between the price at the time of issue of an ipo, and the price when they start trading in the secondary market. These pricing disparities occur mostly when an ipo is considered hot, or in othere words, when is appeals to a large numbers of investors. An ipo is hot when the demand for it far exceeds the supply. The imbalance between demand and supply causes a dramatic rise in the price of each share in the first day itself, during the early hours of trading. Under pricing and overpricing of IPOs Under pricing: The pricing of an IPO at less than its market value is reffered to as underpricing. Under priced IPOs helps to generate additional interest in the stock when it first becomes publically traded. This might result in significant gains for investors who have been allocated share at the offering price. However, under pricing also results in loss of significant amount of capital that could have been raised had the shares been offered at the higher price. Overpricing:

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The pricing of an ipo at more than its market value is reffered to as overpricing. Even over pricing, of shares is not as healthy option. If the stock is offered at the higher price than what the market is willing to pay, then it is likely to become difficult for the underwriters to fulfill their commitment to sell shares. Furthermore, even if the underwriters are successful in selling all the issued shares and the stocks falls in value of on the first day itself of trading, then it is likely to lose its marketability and hence, even more of its value.

Principal steps in an IPO

Approval of BOD : approval of BOD is required for raising capital from the public.

Appointment of lead managers: the lead manager is the merchant banker who orchestrates the issue in consultation of the company.

Appointment of other intermediaries: Co-managers and advisors

Underwriters Bankers Broker and principal bankers Registrars

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Filing the prospectus with SEBI The prospective or the offer document communicates information about the company and the proposed security issue to the investing public. All the companies seeking to make a public issue have to file their offer document with SEBI. If SEBI or public does not communicate its observations within 21 days from the filing of the offer document, the company can proceed with its public issue. Filing of the prospectus with the registrar of the companies Once the prospectus have been approved by the concerned stock exchanges and the consent obtained from the banker, auditors, registrar, underwriters and others, the prospective signed by the directors, must be filed with the registrars of companies, with the required documents as per the companies act 1956.

Printing and dispatch of prospectus: After the prospectus

is filed with the registrar of companies, the company should print the prospectus. The quantity in which prospectus is printed should be sufficient to meet requirements. They should be send to the stock exchanges and brokers so they receive them atleast 21 days before the first announcement is made in the news papers.

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Filing of initial listing application: Within 10 days of filing

the prospectus, the initial listing application must be made to the concerned stock exchanges with the listing fees.

Promotion of the issue: The promotional campaign

typically commences with the filing of the prospectus with the registrar of the companies and ends with the release of the statutory announcement of the issue.

Statutory announcement: The issue must be made after

seeking approval of the stock exchange. This must be published atleast 10 days before the opening of the subscription list.

Collections of applications: The Statutory announcement

specifies when the subscription would open, when it would close, and the banks where the applications can be made. During the period the subscription is kept open, the bankers will collect the applications on behalf of the company.

Processing of applications: Scrutinizing of the applications

is done.
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Establishing the liability of the underwriters: If the issue

is undersubscribed, the liability of the underwriters has to be established.

Allotment of shares: Proportionate system of allotment is to

be followed.

Listing of the issue: The detail listing application should be

submitted to the concerned stock exchange along with the listing agreement and the listing fee. The allotment formalities should be completed within 30 days.

SIGNIFICANCE OF IPO Investing in IPO has its own set of advantages and disadvantages. Where on one hand, high element of risk is involved, if successful, it can even result in a higher rate of return. The rule is: Higher the risk, higher the returns. The company issues an IPO with its own set of management objectives and the investor looks for investment keeping in mind his own objectives. Both have a lot of risk involved. But then investment also comes with an

advantage for both the company and the investors.

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The significance of investing in IPO can be studied from 2 viewpoints for the company and for the investors. This is discussed in detail as follows:

SIGNIFICANCE TO THE COMPANY: When a privately held corporation needs additional capital, it can borrow cash or sell stock to raise needed funds. Or else, it may decide to go public. "Going Public" is the best choice for a growing business for the following reasons: The costs of an initial public offering are small as compared to the

costs of borrowing large sums of money for ten years or more,

The capital raised never has to be repaid.

When a company sells its stock publicly, there is also the

possibility for appreciation of the share price due to market factors not directly related to the company.

It allows a company to tap a wide pool of investors to provide it

with large volumes of capital for future growth.

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SIGNIFICANCE TO THE SHAREHOLDERS: The investors often see IPO as an easy way to make money. One of the most attractive features of an IPO is that the shares offered are usually priced very low and the companys stock prices can increase significantly during the day the shares are offered. This is seen as a good opportunity by speculative investors looking to notch out some short-term profit. The speculative investors are interested only in the short-term potential rather than long-term gains. Eligibility norms for making these issues: SEBI has laid down eligibility norms for entities accessing thee primary market through public issues. There is no eligibility norm for a listed company making a rights issue as it is an offer to the existing shareholders who are expected to know their company. The main entry norms for companies making a public issue (IPO or FPO) are summarized as under: Entry Norm (EN 1): The company shall meet the following requirements: a) Net tangible assets of at least Rs. 3 crores for 3 full years. b) Distributable profits in at least three years. c) Networth of atleast Rs. 1 crore in three years.

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d) If change in name, atleast 50% revenue for proceding 1 year should be form the new activity. e) The issue size does not exceed 5 times the pre-issue networth. To provide sufficient flexibility and also to ensure that genuine companies do not suffer on account of rigidity of the parameters, SEBI has provided two other alternative routes to company not satisfying any of the above conditions, for accessing the primary market, as under: Entry Norm 11(EN 11) a) Issue shall be through book building route, with at least 50% to be mandatory allotted to the Qualified Institutional Buyers (QIBs). b) The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a compulsory market-making for at least 2 years OR Entry Form 111 (EN 111) a) The project is appraised and participated to the extent of 15 % by Fis/Scheduled Commercial Banks of which at leat 10% comes from the appraiser(s). b) The minimum post-issue face value capital shall be Rs. 10 crores or there shall be a compulsory market making for at least 2 years. In addition to satisfying the aforesaid eligibility norms, the company shall also satisfy the criteria of having at least 1000 prospective allotters in its.
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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.

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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.
38

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.

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:

The 4 mtropolitain centres vis. Mumbai, Delhi, Kolkata&Chennai

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

39

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. 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 up to 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 RBIsupported by a resolution passed in the General Meeting.

Timeframes for Issue and Post-Issue Formalities

40

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 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 Order 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

41

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 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.
42

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.

INTRODUCTION TO CAPITAL MARKET Capital market may be defined as a market of borrowings and lending long term capital funds required by business firms. Capital market is the market for financial assets that have long or indefinite maturity. In other words it refers to all the facilities and the institutional arrangements for borrowings and lending medium term and long term funds. The capital market is dealing with various financial instruments that are used for raising capital resources in capital market are known as capital market instruments. The various capital market instruments used by corporate entities in India for raising resources are as following:Preference shares:Shares that carry preferrencial rights in comparison with ordinary shares are called preference shares. Preferential rights regarding payment of dividends

43

and the distributions of the assets of the company in the events of its winding up in preference to equity shares. There are six types of preference shares, which are as follows, a) Cumulative preference shares b) Non cumulative preference shares c) Participating preference shares d) Redeemable preference shares e) Fully convertible cumulative preference shares f) Preference share with warrants attached.

Equity shares: Equity share, also known as ordinary shares are the shares held by the corporate intity. Since equity shareholders face greater risk and have no specific preferencial rights. They are given larger shares in profit through higher dividend then those given to preference share holders that the companys performance is excellent. Directors declare no dividends in case there are no profits in subsequent year. Equity shareholders also enjoy the benefit of ploughing back of undistributed profits kept as reserve and surplus for the purpose of business expansion. Often part of these is
44

distributed to them as bonus shares. Such bonus shares are entitled to a proportionate or full dividend in the succeeding year.

Debentures and bonds: A document that either creates a debt of acknowledges it is known as debentures. Accordingly, any documents that fulfill either of this condition is a debenture. A debenture, issued under the common seal of the company usually takes the form of certificate that acknowledges in debt ness of the company.

Importance of capital market Absence of capital market serves as deterrent factor to capital formation and economic growth. Resources would remain idle if finances are not funneled through capital market. It serves as an important sourse for the productive use of the economys savings. It provides incentives to saving and facilitates capital formation by offering suitable rates of interest as the price of the capital.

45

 It provides avenue for investors to invest in financial assets. It facilitates increase in production and productivity in the economy and thus enhances the economic welfare of the society. A healthy market consisting of expert intermediaries promotes stability in the value of securities representing capital funds. It serves as an important source for technological up gradation in the industrial sector by utilizing the funds invested by the public. Primary market reforms: Entry barrier for unlisted companies modified as dividend payment in immediately preceding 3 years. A listed company required to meet the entry norm only if the post issue net worth becomes morethan five times the pre-issue net worth. Companies required making their partly paid-up shares fully paid up of forfeiting the same, before making a public/right issue. Unlisted company allowed to freely price its securities provided it has shown net profit in the immediately preceding 3 years subject to its fulfilling the exisiting disclosure requirements. The promoters contribution for public issues made at 20% irrespective of the issue size.

46

 Written consent from share holders in regard to lock-in made compulsory for securities to be offered for promoters contribution. Appointment of registrar to an issue for rights issues made mandatory.

A provision made regarding disclosure of the share holding of the promoters whose names figure in the paragraph on promoters and their background in the offer document.

The SEBI (Registrars to an Issue and share Transfer Agents ) Rules and Regulations 1993 have been amended to provide for an arms length relationship between the issuer and the registrars to the issue. It has now been stipulated that no Registrar to an Issue can act as such for any issue of securities made by any body corporate, if the Registrar to the issue and the Issuer Company are associates.

With a view to facilitating rising of funds by infrastructure projects, SEBI has allowed debt instruments ot be listed on the Stock Exchanges without prior listing of equity. Corporate with infrastructure projects and Municipal Corporations to be exempted from the requirements of Rule 19(2b) of securities (contract) Regulation rules to facilitate public offer and listing of its pure debt instruments as well as debt instruments fully or partly convertible in to equity without the requirement of prior listing of equity but subject to conditions like investments grade ratings.

Only body corporate to be allowed to function as Merchant Bankers

47

 Multiple categories of merchant bankers to abolished and there shall be only one entity viz., merchant banker, presentl, the Merchant Banker allowed to perform underwriting activity but required to seek separate registration to function as a portfolio manager under SEBI (portfolio manager ) Rules and Regulations, 1993.

Chapter 2 Research methodology

48

RESEARCH METHODOLOGY AND DESIGN

STATEMENT OF THE PROBLEM: There is much hype of IPOs nowadays. And while considering the previous years, the number of companies which going for IPO is increased during 2010. There are common phenomenons among the investors today that the return on investing in IPO is not much. Event though investor has the storm back the IPO and yearly there are huge application received from the investor to invest in IPO. And we also heared about that the coal India IPO, etc. so now the trend is changing. Concider following graph:

49

One IPO that are listed in the last year have been trading at a higher price when compare to the issue price call it a fundamentals playing out of after the initial euphoria if you may. But, out 73 IPOs some of them are not listed, they were withdrawn their IPO. The interesting news, was that, some of the issues were oversubscribed, and some of the Issues got gain in their issue price. In short, out of 73 IPOs, 16 offers listed at higher price compare to the issue price. The re-rating of stocks by the investors reported after the initial hype of the public offer warns out. Somehow, the IPO 2010 is better than previous year, and some of the IPOs are doing well in the market even after the global crisis. There are some IPOs whose trade price and the issue price differs significantly. Some investors are getting more money and some are loosing. The most of IPOs issued during the year 2010 are traded at the lower prices than their issue price. So there is a need to know the performance of the IPO. This is the study to know the performance of the IPO that are issued during the year 2010. The problem here is to know which IPO is doing well and which are not. However this study has taken up for the purpose to know: The IPO issued during the year 2010 The performance of the IPO during the year. The investors information of the IPO during the year 2010 The economical impact on IPO due to the Market condition.
50

JUSTIFICATION OF THE STUDY:The study highlights the performance of the IPO dusing the year 2010. It also deals the future prospects of IPO. It also reviews the performance of different sector.

OBJECTIVES OF THE STUDY: The objectives of the study is to know that Study of the IPO issued during the year 2010 Study the overall performance of the IPO during the year 2010 Comparison of the issue price and the trade price in particular day. The future prospect of IPO Types of research the research includes different options. They are, 1. Explorative Observational research Fresh data can be gathered by observing the relevant actors and settings. Under theis method the information is sought by way of investigatoss own direst observation withour asking from the respondents,
51

instead of asking for the brand of wrist watch used by the respondent, may himself look at the watch the main advantage of this method is subjective bias is eliminated, if the observation is done accurately. Secondly information obtained under this method related to what is currently happening. It is not complicated either by past behaviours or future intentions or attitudes. Thirdly, this mwthod is independent of reposdents willingness to respond and as such is relatively less demanding of active cooperation on the part of respondents. This method is particularly suitable in studies which particularly deal with subjects who are not capble of giving verbal reports of their feelings for one reason or the other. 2. Focus group research. A focus group is a gathering of six to ten people who are invited to spend a few hours with a skilled moderator to discuss a product, service, organization, or other marketing entity. The moderator needs to be objective, knowledgible on the issue and skilled in group dynamics. Participants are normally paid a small sum for attending. The meeting is typically held in pleasant surroundings and refreshments are served. 3. Survey research. Surveys are best suited for descriptive research. Companies undertake surveys to learn about peoples knowledge, beliefs, preferances, and satisfaction, and to measure these magnitudes in the general population. A company such as Mainstay might prepare its own survey instrument to
52

gather information it needs, or it might add questions to an omnibus survey that carries the questions of several companies at much lower cost. 4. Experimental research. The most scientifically valid research is experimental research. The pupose of experimental research is to capture cause and effect relationships by eliminating competing explanations of the observes findings to the extent that the design and execution of the experiment eliminate alternative hypothesis that might explain the results, research and HR managers can have confidence in the conclusions. It calls for selecting matched groups of subjects, subjecting them to different treatments, controlling extraneous variable, and checking whether observed response differences are satisficallysignifican. To ehte extent that extraneous factors are eliminated of controlled, the observed effects can be related to variation in the treatments. Adopted Research Design:The research design that is adopted is both explanatory and experimental research design. The advantage behind adopting the explorative method is that is helps on identifying the problems and is finding out the alternative solution to the problem as herein referred to the effectiveness of the campaign.
53

recruitment

The reason being it is also an experimental study is that is is the testing of the attitude towards the hypothesis proposed and it is variable as well as a study of the existing system. Collection of Data:The data required for the study were obtained from, 1. Primary data 2. Secondary data. The primary data are those data which are collected for the first time. The primary data was collected through discussions and interviewing wit some financial experts and bank officers. It includes the eminent personalities dealing with IPO and some bank expert. The secondary data and other related information published reports of corporations like Websites RBI Guidelines SEBI Guidelines Newspapers : Economic times, Business lines, Business standards Text books Business journals: Dalal street, capital market, ICFAI journals, etc.

54

Tools of Analysis:The toolswhich are used for this study are: The interviews and discussions has been done with some

financia experts, and share brokers to know the performance of the IPO during the year 2010. This research study has been conducted by collecting the

secondary data from various sources like RBI bulletin, Websites, Business journals, etc. about the FDIand interpreting the same with reference to the year 2010. Sampling Plan :Sampling may be defined as the selection of some part of an aggregate or totality on basis of which judgement or inference about the aggregate or totality is made. A sample design is a definite plan for obtaining a sample from a given population. It refers to a technique or the procedure the researcher would adopt in selecting the items for the sample. Since it is a research kind of study about performance of the ipo issued during the year, 2010, I have taken the sample as the total of population. I have taken all the 73 IPOs that are issued during the year 2010. ANALYSIS OF DATA
55

Analysis of data has been done, By taking all the IPO that are issued during the year 2010. By taking the issue price of the data that are issued during the year 2010. By taking the trade price pertaining to a particular day. By comparing the gain or loss during the year 2010.

By relating the data to know which sectors IPO are doing well and how the trade price are changing significantly from the issue price.

Limitation of the study For this study collecting of primary data with regards to the IPOs is very difficult. Getting the full fledged data on this topic is quite impossible. The study contains most of the secondary data and analysis of the same. The study has been taken to the performance of the IPO during the year 2010 It only judge the performance of the IPO based on the issue price and trade price. But there are so many reasons for the success of IPO. It has not dealt with the cause behind on company is getting the huge success whether other suffers. It does not deal with the speculation in the capital market.

56

Chapter 3

COMPANY PROFILE

KARVY Stock Broking Limited, one of the cornerstones of the KARVY edifice, flows freely towards attaining diverse goals of the
57

customer through varied services. It creates a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. KARVY Stock Broking Limited is a member of: 1) National Stock Exchange (NSE) , 2) Bombay Stock Exchange (BSE). Member-National Stock Exchange and The Bombay Stock Exchange . Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal.

Stock Broking Services They offer services that are beyond just a medium for buying and selling stocks and shares. Instead we provide services which are multi dimensional and multi-focused

58

in their scope. There are several advantages in utilizing our Stock Broking services, which are the reasons why it is one of the best in the country. They offer trading on a vast platform ; National Stock Exchange and Bombay Stock Exchange. More importantly, they make trading safe to the maximum possible extent, by accounting for several risk factors and planning accordingly. They are

assisted in this task by our in-depth research, constant feedback and sound advisory facilities. Their highly skilled research team, comprising of technical analysts as well as fundamental specialists, secure result-oriented information on market trends, market analysis and market predictions. This crucial information is given as a constant feedback to our customers, through daily reports delivered thrice daily ; The Pre-session Report, where market scenario for the day is predicted, The Mid-session Report, timed to arrive during lunch break , where the market forecast for the rest of the day is given and The Post-session Report, the final report for the day, where the market and the report itself is reviewed. To add to this repository of information, we publish a monthly magazine “Karvy ; The Finapolis”, which analyzes the latest stock market trends and takes a close look at the various investment options, and products available in the market, while a weekly report, called “ Karvy Bazaar Baatein”, keeps you more informed on the immediate trends in the stock market. In addition, our specific industry reports give comprehensive information on various industries. Besides this, we also offer special portfolio analysis packages that provide daily technical advice on scrips for successful portfolio management and provide customized advisory services to help you make the right financial moves that are specifically suited to your portfolio.

In the future, our focus will be on the emerging businesses and to meet this objective, we have enhanced our manpower and revitalized our knowledge base with enhances focus on Futures and Options as well as the commodities business.
59

depository services
The onset of the technology revolution in financial services Industry saw the emergence of Karvy as an electronic custodian registered with National Securities Depository Ltd (NSDL) and Central Securities Depository Ltd (CSDL) in 1998. Karvy set standards enabling further comfort to the investor by promoting paperless trading across the country and emerged as the top 3 Depository Participants in the country in terms of customer serviced. Offering a wide trading platform with a dual membership at both NSDL and CDSL, we are a powerful medium for trading and settlement of dematerialized shares. We have established live DPMs, Internet access to accounts and an easier transaction process in order to offer more convenience to individual and corporate investors. A team of professional and the latest technological expertise allocated exclusively to our demat division including technological enhancements like SPEED-e, make our response time quick and our delivery impeccable. A wide national network makes our efficiencies accessible to all.

Distribution of Financial Products The paradigm shift from pure selling to knowledge based selling drives the business today. With our wide portfolio offerings, we occupy all segments in the retail financial services industry. A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and professional backgrounds are committed to maintaining high levels of client service delivery. This has propelled us to a position among the top distributors for

60

equity and debt issues with an estimated market share of 15% in terms of applications mobilized, besides being established as the leading procurer in all public issues. To further tap the immense growth potential in the capital markets we enhanced the scope of our retail brand, Karvy the Finapolis , thereby providing planning and advisory services to the mass affluent. Here we understand the customer needs and lifestyle in the context of present earnings and provide adequate advisory services that will necessarily help in creating wealth. Judicious planning that is customized to meet the future needs of the customer deliver a service that is exemplary. The market-savvy and the ignorant investors, both find this service very satisfactory. The edge that we have over competition is our portfolio of offerings and our professional expertise. The investment planning for each customer is done with an unbiased attitude so that the service is truly customized. Our monthly magazine, Fin polis, provides up-dated market information on market trends, investment options, opinions etc. Thus empowering the investor to base every financial move on rational thought and prudent analysis and embark on the path to wealth creation. Advisory service Under our retail brand Karvy the Finapolis', we deliver advisory services to a cross-section of customers. The service is backed by a team of dedicated and expert professionals with varied experience and background in handling investment portfolios. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers' portfolios and providing valuable inputs, monitoring and managing the portfolio through varied technological initiatives. This is made possible by the expertise we have gained in the business over the years. Another venture towards being investor-friendly is the circulation of a monthly
61

magazine called Karvy - the Finapolis'. Covering the latest of market news, trends, investment schemes and research-based opinions from experts in various financial fields .

Private client group

This specialized division was set up to cater to the high net worth individuals and institutional clients keeping in mind that they require a different kind of financial planning and management that will augment not just existing finances but their life-style as well. Here we follow a hard-nosed business approach with the soft touch of dedicated customer care and personalized attention. For this purpose we offer a comprehensive and personalized service that encompasses planning and protection of finances, planning of business needs and retirement needs and a host of other services, all provided on a one-to-one basis.
Our research reports have been widely appreciated by this segment. The delivery and support modules have been fine tuned by giving our clients access to online portfolio information, constant updates on their portfolios as well as value-added advise on portfolio churning, sector switches etc. The investment recommendations given by our research team in the cash market has enjoyed a high success rate. KARVY CONSULTANT LTD.

As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress. Having emerged as a leader in the registry business, the first of the businesses that

62

we ventured into, we have now transferred this business into a joint venture with Computershare Limited of Australia, the worlds largest registrar. With the advent of depositories in the Indian capital market and the relationships that we have created in the registry business, we believe that we were best positioned to venture into this activity as a Depository Participant. We were one of the early entrants registered as Depository Participant with NSDL (National Securities Depository Limited), the first Depository in the country and then with CDSL (Central Depository Services Limited). Today, we service over 6 lakhs customer accounts in this business spread across over 250 cities/towns in India and are ranked amongst the largest Depository Participants in the country. With a growing secondary market presence, we have transferred this business to Karvy Stock Broking Limited (KSBL), our associate and a member of BSE NSE and HSE.

63

Chapter 4 LIST OF IPO ISSUED DURING THE YEAR 2010

64

List of IPOs issued during the year 2010 No IPOs name Total quantity issue price

Infinite computer solution ltd

189.8

165

2 3 4 5 6 7 8 9 10

Birla shlokaedutech ltd. jubilant food works ltd Vascon engineering ltd Syncom health works ltd aqua logistics DB Reality ltd EMMBI polyarns ltd NTPC Ltd ARSS projects ltd infrastructure

24.78 328.72 199.8 56.25 150 1500 38.96 8480.1 103

50 145 165 75 220 468 40 201 450

11

Hathway datacom ltd

cables

and

666

240

12 13 14

Texmo pipes and pdts ltd Man infra construction Rural electrification corp. ltd

45 141.75 xxxxx

90 252 Xxxxx

15 16

United banak of india DQ entertainment

324.98 128.16

66 80

(international) ltd 17 18 NMDC ltd Pradip overseas ltd 9930.45 116.6 375 110
65

19

IL and FS transportation network ltd

700

258

20 21 22

Persistent systems Thamngamayil jewelry Shree house ganeshjewellary

168.01 28.79 371.02

310 75 260

23 24

Infrasoft technologies ltd Goenka jewels diamond and

53.65 126.51

145 135

25

Talwalkers fitness ltd

better

value

77.44

128

25 26 27 28 29 30 32 33 34 35 36 37

Nitesh estates ltd Tarapur transformers ltd Mandhana industries ltd SJVN ltd Jaypeeinfratech ltd Tara health food ltd Standard chartered plc Fatpipe network india ltd Parabolic drugs ltd Aster silicates ltd Technofab engineers ltd Hindustan media venture ltd

450 63.75 107.9 1064.74 1650 xxxxx 2486.35 xxxxx 200 53.10 71.66 270

54 75 130 26 102 Xxxxxx 104 Xxxxx 118 118 240 166

38

Midfield industries ltd

59.85

133
66

39 40 41 42 43 44 45 46 47 48

Engineers india ltd SKS micro fin ltd Bajaj corp. ltd Prakashsteelage ltd Gujarathpipavat ltd Indosolar ltd Tirupati ink ltd Eros international ltd Career point infosystem Microsec services ltd financial

959.65 1628.78 297 68.75 500 357 51.5 350 115 1628.78

290 985 660 110 46 29 43 175 310 985

49 50 51 52 53 54 55 56 57 58

Ramky infrastructure ltd Orient green power co. ltd Electrosteels ltd Cantabile retail VA TECH WABHAG ltd Tecprosystem ltd Ashoka build con. Ltd Sea TV networks ltd Bedmutha industries ltd Commercial engineers and bodybuilders

530 900 248.07 105 125 267.91 225 50.20 91.8 153

450 47 11 135 1310 355 324 100 102 127

59 60 61 62 63

Obroi reality ltd BS Transcom ltd Prestige estate project ltd Gyscoal alloys ltd Coal india ltd

1028.61 190.45 1200 54.67 15199.44

260 248 183 71 245

67

64 65 66 67 68 69

Gravita India ltd Powergrid corp. of India RPP infra Moil ltd Claris life sciences The shipping corp. of india ltd

45 2984.45 48.75 1237.51 300 1164.73

125 90 75 375 228 140

70 71 72 73

A2Z maintenance Ravikumar distilleries Punchab and sind bank C mahendra export ltd

675 73.6 470.82 165

400 64 120 110

IPOs 2010, sector wise classification( number of IPOs 2010)

Conclusion : Apart from previous years, Indian IPO market had a good energy, and that showed us the result of increase in number of IPO issue, ie (in previous year the number of IPO was 21.). The major part of IPOs were issued on construction and engineering sector. But while taking the fund as yard stick, mining and minerals was the most interested area.

68

Table 4.1 5.1.1 construction and engineering sector Name of the issue Issue size (RS.Cr) Vascon engineering ltd 199.8 27jan2010 DB reality 1500 29jan2010 ARSS project ltd Infrastructure 103 8feb2010 Man infra construction ltd 141.75 18feb2010 IL & FS transportation networks 700 11mar11feb2010 22feb2010 15mar258 252 450 29jan2010 3-feb2010 468 open closes Offer offer price 165

69

2010 Nitesh estates ltd 450 23apr2010 Jaypee infra tech 1650 29apr2010 Technofab engineers ltd 71.66 29june2010 Engineers India ltd 956.65 27july2010 Gujarathpipav port 500 23aug2010 Ramky infrastructure 530 22sep2010 VA tech wabag ltd 125 22sep2010 Techpro systems 267.91 23sep-

2010 27apr2010 4may2010 7july2010 30july2010 26aug2010 27sep2010 27sep2010 28sep70

54

102

240

290

46

450

1310

355

2010 Asoka buildcon ltd 225. 24sep2010 Commercial engineers 153 30sep2010 Oberoi reality ltd 1028.61 6oct2010 Prestige estates project ltd 1200 12oct2010 RPP infra projects 48.75 18nov2010

2010 28sep2010 5-oct2010 127 324

and bodybuilders co ltd

8-oct2010

260

14102010 22nov2010

183

75

Interpretation: There are 18 companies who have come out for IPOs issues in this industry sector. Jay pee infra had come up with highest offer. And comparing other sectors, here is the place more IPOs issues are made during the year 2010.

71

And some of industrial giants like prestige groups, DB reality, etc. are also came to make their issues over here.

4.2 Banking and Finance sector Name of issue Issue size(RS.Cr) United India bank of 324.98 23feb2010 Standard chartered PLC 2486.35 25may2010 SKS Micro 1628 28july2010 Microsec fin. 147 17sep2010 Punjab bank and sind 470.82 13dec2010 25feb2010 28may2010 2aug2010 21sep2010 16dec2010 120 118 985 104 opens close Offer price 66

financial services

72

Interpretation In thissectors, the number of companies are which are came for IPO is comparatively lesser than that previous sector. But the issue size were little huge. Standard chartered PLC had come up with huge offer.

4.3 Power sectors company Issue size(RS.cr) NTPC Ltd 8480.1 3-feb2010 5feb2010 Tarapur transformers 63.75 26apr2010 SJVN ltd 1062.74 24apr2010 Orient green power 900 21sep2842010 3may2010 24sep73

opens

close

Offer price 201

75

26

47

2010 BS transcom 190.45 6-oct2010

2010 13oct2010 248

Power grid

2984.45

9nov2010

12nov2010 10dec2010

90

A2Z maintenance

675

8dec2010

400

Interpretation This is another place where huge issues were happened. NTPC, Power grid corporation, SJVN ltd were come up with huge IPO issues. And here, the 7 companies were issued for absorbing contributing 14356 crore rupees.

4.4 Pharmaceuticals sector and life care company Issue size(Rs.cr) opens closes Offer price
74

Bajaj corp

297

2aug2010

5sep2010 29jan2010 14june2010 24nov2010

660

Syncom care

health

56.25

27jan2010

75

Parabolic drugs

200

14june2010

118

Claris sciences

life

300

24nov2010

228

Interpretation: Pharmaceuticals and life care sector is an another sector where more fund essential. During 2010 around 4 companies were issued their IPOs in this sector. Bajaj corp. Claris life sciences are the companies who made comparatively huge issues.

75

1.5 Steel industry company Prakashsteelage Issue size(Rs.cr) 68.75 open 5-aug2010 21-sep2010 28-sep2010 13-oct2010 close 10aug2010 24sep2010 1-oct2010 15-oct2010 Offer price 110

Electrosteels

248.07

11

Bedmutha industries Gyscoal alloys

91.8 54.67

102 71

Interpretation: Steel industry is an another industry where huge investment is needed. The interesting fact here is, all steel sector companies were waiting till the end of first half of the year. Electro steels and gyscoal alloys are the companies which came up with comparatively huge IPOs from this sector.

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4.6 Computer Hardware and Software sector Company Infinite computer solutions Birla shlokaedutech Persistent systems Intrasoft tech. Issue size(Rs.cr) 189.8 open 11-jan2010 11-jan2010 17-mar2010 23-mar2010 16-sep2010 close 13jan2010 13jan2010 19mar2010 26mar2010 21mar2010 Offer price 165

24.78

50

168.01

310

53.65

145

Careerpoint

115

321.4 5

Interpretation: Now the IT sector has been recovering from the effect of financial crisis. Around 6 companies were initially offered, but from this Fatpipe
77

networks India withdrew their offer. Infinite computer solutions and persistent systems were the companies who came up with

comparatively big offer from this sector.

\4.7 Mining and minerals company NMDC ltd Coal India ltd Moil ltd Issue size(Rs.cr) 9930.45 15199.44 1237.51 open 10-mar2010 18-oct2010 26-nov2010 close 12-mar2010 21-oct2010 1-dec2010 Offer price 375 245 375

Interpretation : While taking the whole IPOs, this is the section where the huge issues where made. Around 26366.89 crore Rupees was the total size of IPOs which made in this particular sector. And coal India ltd issues were oversubscribed.

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4.8 Shipping and Transport corporation company Aqua logistics The shipping corp. of India Issue size(Rs.cr) 150 1164 open 25-jan2010 30-nov2010 close 2-feb2010 3-dec2010 Offer price 220 140

Interpretation: During 2010, only 2 companies were involved in this sector. Aqua logistics and, The Shipping Corp. Of India were the companies which made the IPOs. The Shipping Corp. of India was the company who made large issue on this particular sector.

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4.9 Media and entertainment sector company Hathway cables and data com ltd DQ entertainment Hindustan media venture Eros international media Sea TV networks ltd Issue size(Rs.cr) 666 open 9-feb2010 8-mar2010 5-june2010 19-sep2010 27-sep2010 close 11feb2010 10mar2010 7-june2010 21sep2010 29sep2010 Offer price 240

128.16

80

270 350

166 175

50.20

100

Interpretation: Media sector has a good role in development of a nation. During the year 2010, around 5 companies were come up with new issues.

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Hatchway cables and data com ltd, Eros international are companies which are made comparatively huge issues.

4.10 Jewelry sector Company Issue size(Rs .cr) 28.76 371.02 126.51 165 open close Off er pric e 75 260 135 110

Thangamayil jewelry Shree ganesh jewelry house Goenka diamond C Mahendra exports

18-jan2010 19-mar2010 23-mar2010 31-dec2010

20-12010 23-mar2010 28-mar2010 6-jan2011

Interpretation:

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This is an another major area of ivestment. Around 4 companies were come up with their new issues during 2010. Shree Ganesh jewelry was the company which made comparatively huge issues.

4.11 Retail and packing industry Company Issue size(Rs .cr) 38.96 59.85 105.00 open close Off er pric e 40 133 135

EMMBI polyarns Midfield industries Cantabile retails

1-feb2010 19-jule2010 22-sep2010

3-feb2010 21-july2010 27-sep2010

Interpretation: Retail industries are the one of the growing sector in India. During 2010 around 3 companies were come up with IPO offer, among this cantabile retails had offered 105.00 crore through IPO.

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4.12 Textiles sector Company Issue size(Rs .cr) 116 107.9 open close Off er pric e 110 130

Pradip overseas ltd Mandhana industries

11-mar2010 24-apr2010

15-mar2010 29-apr2010

Interpretation: This is an another sector where the few IPOs issues were made. Only two companies were made their IPOs over here. Among this mandhana Industries has made an IPO of 116.6 crore.

4.13 miscellaneous Company Issue size(Rs .cr) food 328.72 Open close Off er pric e 145

Jubilant works

18-jan2010

20-jan2010

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Texmo

pipes

45

and products Talwalkers better fitness ltd Aster silicates Indo solar ltd Tirupati inks Gravitaindia Ravikumar distilleries 53.1 357 51.50 45 73.60 value 77.44

16-feb2010 21-apr2010

19-feb2010 23-apr2010

90

128

24-june2010 13-sep2010 16-sep2010 1-nov2010 8-dec2010

28-june2010 15-sep2010 19-sep2010 3-nov2010 10-dec2010

118 29 43 125 28.9 5

Interpretation: The companies which are not involved in other sectors are grouped as miscellaneous sectors. In this Around 9 companies were made IPOs, tara health food were withdrawn their issue.

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CHAPTER 5

ANALYSIS AND INTREPRETATION

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Total list of IPOs and fund issued

86

n o 1

IPOs name

Total fund issued

Infinite computer solution ltd

155.165

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8

Birla shlokaedutech ltd. jubilant food works ltd Vascon engineering ltd Syncom food works ltd aqua logistics DB Reality ltd EMMBI polyarns ltd NTPC Ltd ARSS projects ltd Hathway datacom ltd Texmo pipes and pdts ltd cables and infrastructure

45.50 328.72 199.8 56.28 150 1500 38.96 8480.10 103

666

45

Man infra construction

141.75

Rural electrification corp. ltd United banak of india

XXX

324.98

DQ

entertainment

128.16

(international) ltd NMDC ltd 9930.45

Pradip overseas ltd

116.6

87

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sector Construction and engineering Banking and finance sector Power sector Pharmaceuticals and life care Steel industry Computer sector Mining and minerals Shipping and transport Media and entertainment Jewelry sector Retail and packing sector Textiles sector miscellaneous

Fund issued 9854.13 5058.43 14356.59 853.25 463.29 600.24 26366.89 1314.73 1464.36 662.53 203.81 224.5 1216.36

Analysis and Interpretation While comparing previous years, 2010 was the one which never forgettable, around 74 companies were came for IPO, and some of them were withdrew their issue, finaly around 70 companies made their issues. Out of 70 around 18 companies were made their issues on engineering and construction sector. While we taking the fund issued, mining and minerals where the sector were more funds issued. Around 26366.89 crore were issued on that particular sector.

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Following table has shows clearly that, how much funds were involved on various sector.

Analysis and Interpretation: the issue size refers to the company has issued that much share to the company. The above histogram shows the comparison of issue size for sector to sector. The issue size is the indicator how the companies has get the fund from the public. From the historical data we can get that the issue size is concentrated on some sectors like mining and minerals , construction, power ,etc. while taking other sectors, these areas has good investement scope. % of Gain or Loss =current price-issue price Issue price x 100

Sector wise analysis

5.1 Comparison of issue price and current price. 5.1.1 construction and engineering sector

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Name of the issue

Issue price

Current price 97.88 126.9 519.65 132.40 205.95 20.05 54.45 117.60 279.7 51.75 256.15 1333.35 299.3 255.4 28.8

%of gain or loss

Vascon engineering ltd DB reality ARSS Infrastructure project ltd Man infra construction ltd IL & FS transportation networks Nitesh estates ltd Jaypee infra tech Technofab engineers ltd Engineers India ltd Gujarathpipav port Ramky infrastructure VA tech wabag ltd Techpro systems Asoka buildcon ltd Commercial engineers and

165 468 450 252 258 54 102 240 290 46 450 1310 355 324 127

-68.5 -268.7 +13.4 -90.3 -25.27 -87.3 -87.3 -104.0 -3.68 +11.11 -75.6 +1.75 -18.6 -26.8 -340.9

bodybuilders co ltd Oberoi reality ltd Prestige estates project ltd RPP infra projects 260 183 75 227.6 125.5 53.9 -14.2 -45.8 -39.14

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ANALYSIS AND INTERPRETAION: During 2010, construction sector was the place where the most number of IPOs made. Around 18 companies were came with new issue. From that, only 3 companies got gain in their issue. Rest of that all are went to below expectation. In short , that was really a huge loss. The gainers are pointed below: ARSS infra projects 13 .4% Gujarat pipav VA tech 11.11% 1.75 %

5.1. 2 Banking and Finance sector Name of issue Issue price Current price %of gain or
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loss United bank of India 66 93.5 41.6 7 Standard chartered PLC SKS Micro financial services 104 985 112.55 638.4 8.22 35.5 8 Microsec fin. Punjab and sind bank 118 120 40.1 99.75 -33 -17.2

ANALYSIS AND INTERPRETATION : In this sector, around 6 companies were came up with IPO, in that only two were went to above expectation. All others are traded lower than their issue price. UBI has achieved 41.64% of gain in their issue price, and standard chartered PLC made 8.22% gain in their value. In short , this sectors has achieved little better than construction sector.

5.1.3 Power sectors Name of issue Issue price NTPC Ltd Tarapur transformers 201 75 Current price 176.85 22.45 %of gain or loss -12 -70.06

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SJVN ltd Orient green power BS transcom Power grid A2Z maintenance

26 47 248 90 400

21 24.25 87.8 96.4 234.7

-19.2 -48.4 -64.59 7.1 -41.475

ANALYSIS AND INTERPRETATION: This was also an tragedy, during 2010, around 7 companies were come up with new issues, among that only one get gain in their value. Powergrid corporation was the company which made gain in their price. All others are gone in to underpriced. 5.1.4 Pharmaceuticals sector and life care Name of the issue Issue price Current price % gain loss Bajaj corp Syncom health care Parabolic drugs Claris life sciences 660 75 118 228 407.05 31.1 43.15 169.95 -38.32 -58.53 -63.45 -25.46
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of or

ANALYSIS AND INTERPRETATION: Unlike other sector, here all issues were traded lower prices than their issue price. Around 4 companies were come up with new issues. None of them could trade their share on a higher price than their issue price.\

5.1.5 steel industry Name of issue Issue price Prakashsteelage Electrosteels ltd Bedmutha industries Gyscoal alloys 110 11 102 71 Current price 125.2 8.95 90.75 15.95 % gain or loss -13.8 -18.6 -11 -77.5

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ANALYSIS AND INTERPRETATION: Steel industry is the place where we need more initial fund. And its also an very profitable business too. Even here also only one company could achieved the gain in their value. 5.1.6 Computer Hardware and software sector Name of issue Issue price Current price % gain loss Infinite solution Birla shlokaedutech ltd Persistent systems Intrasoft technologies Careerpointinfosystems 50 310 145 310 16.1 386.95 65.1 321.45 -67.8 27.8 -55.1 3.69 computer 165 154.4 -6.42 of or

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ANALYSIS AND INTERPRETATION:

While taking this sector, two companies were got higher price that their issue price. Others may be the result of Great financial crisis. 5.1.7 mining and minerals

Name of issue

Issue price

Current price

% gain loss

of or

NMDC Coal India Ltd Moil ltd

375 245 375

260.6 304.6 405

-30.5 24.3 8.01

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ANALYSIS AND INTERPRETATION: Here out of 3 two were traded at higher price. And some of the IPOs were oversubscribed. Unlike other sectors, the IPOs made over this sector performed well. 8 Shipping and Transport Name of issue Issue price Current price % of

gain or loss

Aqua logistics The shipping corp. of India

220 140

19.9 109

-90.95 -22.142

ANALYSIS AND INTERPRETATION: This was the place where all IPOs were traded lower than their issue price. In short, the performance of these share was totally so poor. 9 Media and Entertainment Name of issue Issue Current % of
98

price

price

gain loss

or

Hatchway cables and data com ltd DQ entertainment

240

120.8

-49.6

80

70.2

-12.25

(international) ltd Hindustan ventures Eros media Sea TV networks 100 23.25 -76.75 international 175 154.9 -11.45 media 166 154.95 -6.65

ANALYSIS AND INTERPRETATION: The IPOs which made over this sector also under performed. None of them were traded more than their face value.

10 jewelers and diamond Name of issue Issue price Current price % of

gain or

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loss Thangamayill jewelry Shree house ltd Goenka diamond and jewelry C Mahendra exports 110 178.45 62.22 135 59.85 -55.67 ganeshjwelry 75 260 150.95 162.3 101.26 -37.57

ANALYSIS AND INTERPRETATION: While taking this sectors, the performance of IPOs in this sector was no so poor, out of 4 around two ipos were traded above than their issue price. Among this, thangamayil jewelers got 101.26% gain, and C Mahendra got 62.22% gain.

11 Retail and packing Name of issue Issue price Current price % of

gain or

100

loss EMMBI polyarns Midfield industries Cantabil retails 40 133 135 13.75 46.4 37 -65.6 -65.1 -72.59

ANALYSIS AND INTERPRETATION: This was another poorest performance, out of 3, none of them got good value. All were traded below the issue price.

13 textiles

Name of the issue

Issue price

Current price

% of gain or loss

Pradip overseas Mandhana industries

110 130

75.6 259

-31.27 99.80

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ANALYSIS AND INTERPRETATION: Here we could see, only two issues made, out of them one goe excellent gain in their value, one was totally worst in result. 12 Others Name of issue Issue price Current price % gain or loss Jubilant food works Texmo pipes and products Talwalkers fitness ltd Aster silicates Indo solar ltd Tirupati inks Gravitaindia Ravikumar distilleries 118 29 43 125 64 25.7 17.25 10.13 209.1 28.95 -78.2 -40.8 -76 67.20 54.7 better value 145 90 128 490.4 34.25 175.15 238.2 -61.9 36.8

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ANALYSIS AND INTERPRETATION: The companies which are not included none of previous sectors are added with miscellaneous sector. Under this category around 8 issues are made. And one Issues was withdrew by the company. Here some are got good gain, some are totally failed. Jubilant food works was one company, that traded with high gain.

5.2Top five gainers

Name of the issue
Jubilant food works Thangamayiljewler s Mandhana industries Gravita India C Mahendraexpots 4 5 67.20 62.32 3 99.80 1 2 238.2 101.26

position

% of gain

103

ANALYSIS AND INTERPRETATION: The histogram shows the percentage of the gain by comparison of issue price and the current price. Here from above chart Jubilant food works top the list with 238.2% gain followed by Thangamayyil Jewelers with 101.26 %, followed by Mandhana Industries with the gain of 99.8%, followed by Gravit India and C Mahendra exports gain of 67.2% and 62.32% respectively. Here from the following data we can observe that Jubilant foodworks has traded with gain of 238.2%.

Top losers
Name of the issue
Commercial engineers and body builders ltd Nitesh estates DB reality technofab Aqua logistics 69th 68th 67th 66th -169.3 -126.9 104 90.95 70th -340.9

Position

% of loss

104

ANALYSIS AND INTERPRETATION: These are the list of the company which underperforms in the market. The bottom most company is commercial engineers and bodybuilders ltd with decline of 340.9%, followed by Nitesh estates with 169.3% was carried on by

followed by DB reality with the decline of 126.9%.

Technofab and Aqua logistics with 104% and 90.95% respectively. So from the following data the companies which are under performed have suffered huge loss of around 80-340%.

OVERALL PERFORMANCE OF IPO ISSUED IN THE YEAR 2010 According to this sector wise analysis made during the year, the performance of the IPOs was not so bad. The some of the retail investors invested in the primary market during the year have lost money as most of IPOs are quoting below their issue price. Among 70 IPOs 13 of them able to gain and rest of 57 are trading at a loss. Again when we compare the number of IPOs issued in the year, in construction sector out of 18 only three were got gain in their value, in shipping and transport, retail sector, packing sector, media and entertainment sector all IPOs were under performed. Some trent was,

105

the demand for Coal India, Jubilant food works are excellent, still these shares have very good demand in the market. So overall we can see that companies going for IPO issues are improved while comparing previous sectors, and almost all IPOs are underperformed due to the bad condition in the market.

106

CHAPTER 6 OBSERVATIONS & FINDINGS

107

OBSERVATIONS AND FINDINGS OF THE STUDY DURING THE STUDY THE FOLLOWING ASPECTS WERE CLEARELY OBSERVED:

There are increase in the number of companies going out for the public. By comparing different years, the year 2010 shows an increasing trend in going for public. 2010 shows that highest number of companies going for IPO. Some of the IPOs are over subscribed. And the companies could able to contribute more fund. The capital appreciation ot the initial return during the year was very bad, almost 80% of companies issued IPOs during the year was trading less that its offer price. The capital depreciation was many. The initial return was very frustrating. Even the business giants also suffered loss. This year was blessed with the number of IPOs, but the performance was not up to expectation. The awareness to invest in IPO was great. SEBI took some tough initiative to overcome the IPO scam. The enthuse of the investor were in great shape. The investor kept faith with the primary market. The sector wise results can be watch closely from the performance of the IPO. The sector wise performance deals with best sector. The mining and mineral sectors gives the highest return to its investors. The capital appreciation in this sector was anonymous. The most expected industry where in DB reality, prestige, birlashloka were failed.
108

The IPOs which issued over, shipping and transport, media and entertainment, medical were totally underperformed. The retail sector IPO was really an failure. Seeing the performance of the IPO. All the big fun in the Industries fail drastically. The few IPOs like Jubilant, Coal india, Thangamayyil jewelers, etc, were performed well. The big guns like Prestige etates, Birloashloka, are failed drastically. Economic impact on IPO due to the market condition is too much during the year. As most IPOs are trading in the price lower than the issue price because of slow down of our market due to the past effect of global crisis and political reasons.

109

Chapter 7 Recommendation

Recommendation

110

From the various charts , tables and other information regarding the IPO and its performance I can recommend the following points to judge the performance of IPO

They are:

Firstly invest in selected IPO and diversify the investment pattern to avoid the risk associated with the investing Secondly, choose the sector effectively. Go for the financial performance of the sector and judge with all technical tools to judge the performance of the company and then only invest in IPO. Do not go by speculation. Though you can get short term advantage but for long term its very risky. Before doing for the IPO issue, current market condition also taken in to consideration The overall performance of the IPO gives both positive as well as negative return to the investor. So decision to invest in IPO must taken carefully. From this year performance we can see the the IPO from the MINING and Minerals are doing well, whereas. Never depend the big firms

Conclusions
From the study and the research analysis made it can be convincingly concluded that:
111

1. IPO is one of the cheapest sources of financing. 2. All kinds of investors including small, medium and big go in for IPOs
3. The performance of the IPOs of 2010 has not been very good due to economic

recessions slump in the global market and expected revival in the IT and other sectors not forthcoming 4. timing of the IPOs plays a very vital role in the success of the IPOs
5. Price band of the IPOs is very important and IPOs with mid cap price band have by

and large faired well during 2010 6. Extensive use of electronic media and very high absorption in IT in IPOs has made the entire process of IPO marketing quite convenient and smooth.
7. Sector performance as foreseen by the investors also plays and major decisive role in

performance of the IPOs. 8. finally marketing of IPOs has been underlined force behind the success or failure of the IPOs 9. and while considering the last three year trend, the IPO issue has been increasing.

112