Karvy Investor Services Ltd.

Welcomes You

Organization Life Cycle

Structure of the Securities Market

CAPITAL MARKET
BUYING / SELLING

AMBI RAIN AMFI

SROs

MARKET REGULATOR (SEBI)

Investment Bankers

MARKET INTERMEDIARIES

Portfolio Managers

R&T Agents

Investment Analyssts

Mutual Funds
Stock Ecxhanges

Brokers

Underwriters

Who is a Merchant Banker?

Securities & Exchange Board of India (Merchant Bankers) Rules, 1992 defines a Merchant banker as Any person who is involved in managing issues

Buys, sells or subscribes to securities as manager

Renders corporate advisory service in relation to issue management ,restructuring, buybacks, delisting, takeovers, ESOPS and the list goes on .

Karvy MBD Range of Services

Capital Issues Merchant Banker Restructuring Private Placement Mergers, Amalgamations Value Added Services

Relationships of Merchant Banker

SEBI Regulation Capital ISSUER Market Information Compliance

MERCHANT BANKER

Quality Issues
Disclosures INVESTOR

Guidance

Co-ordination

INTERMEDIARIES

Intermediaries and Legal Structure

Book Built IPO

Intermediaries
Book Runners Book Runners Legal Counsel Legal Counsel BRLM BRLM Co Book Co - Book Runners Runners Broker/ Syndicate Syndicate Members Syndicate Members

Domestic Domestic Legal Legal Counsel Counsel

International International Legal Legal Counsel Counsel

Registrars Registrars

Escrow Escrow Bankers Bankers

Printers Printers

Advertising Advertising Agency Agency

Issuer Issuer Company Company/ / Selling Selling Shareholder Shareholder

Arrangement Co - ordination

Complex Legal Structure of a Book Built Offer

Book Runners MoU Listing Agreements International Wrap Depository 3 party agreements
Issuer Company / Selling Selling Shareholder

Offerors PoA
Software usage agreements with Stock Exchanges Syndicate Agreement Red Herring Prospectus

Registrars MoU

Underwriting Agreement Escrow Agreement

Prospectus

CAN

Merchant Bankers Span of Work

PRE ISSUE
Due Diligence Preparation of Prospectus Arranging Firm Allotments Statutory approvals Appointing agencies Marketing strategy Press and Broker conferences IPO Funding Printing and Distribution of stationery

MARKETING
Road shows Press Brokers Institutional Investors Retail Investors One to One meets Research Reports Analyst meets NRI Investors

POST ISSUE
Finalizing Basis of Allotment Documentation with depositories Credit into investor accounts Listing approvals from the stock exchanges Post issue research support

Marketing Strategy
Broker and Press conferences in key cities Advertising and Public Relations campaign Management interviews in print & electronic media Initial contact with High Net Worth Individuals (HNI) by Private Client Services (PCS) sales person Key HNI meet with the management Collate pre-marketing feedback and decide floor price Finalize the management road show schedule to maximise investor coverage across investor geographies One-on-one meetings and group functions with company management video / telephone conferences in secondary cities as needed Regular interface by salespersons with fund managers to follow-up for bids

Strategy

Retail

15% 35

High net worth individuals

Strategy

25% 15%

Strategy

Qualified Institutional Buyers

60% 50%

Pricing Strategy
Results of Global Marketing Pricing Views by Leading Investors Relative Valuation Market conditions Other Important Factors Analyze levels of demand and over-subscription at various price levels Assess quality of demand Analyze demand and price views of global leading investors Assess after-market price views

Apply IPO discount to secondary multiples of comparable companies Assess relative performance of Asian, European and US markets Assess volatility in various markets

Analyze issuer specific objectives

Underwriting
Underwriting means an agreement with or without conditions to subscribe to the securities of a body corporate when the existing shareholders of such body corporate or the public do not subscribe to the securities offered to them.

Underwriters Obligations
In respect of every underwritten issue, the lead merchant banker(s) shall undertake a minimum underwriting obligation of 5% of the total issue size or Rs.25 lacs whichever is less.

The outstanding underwriting commitments of a merchant banker shall not exceed 20 times its net worth at any point of time.

Precautions
To study the feasibility of the issue

To assess the companys background and its the investment pays off.

financials to ensure that

Depending on the background of the company, the underwriting obligation is ascertained. As per the size of the issue underwritten, the issue has to be sanctioned by the appropriate authority.

Major Issues handled by Karvy

Major Issues under execution

Bank of Baroda. Provogue India Ltd. Tulip IT Services Ltd. Lokesh Machines Ltd. Prithvi Information Solutions Ltd. Opto Circuits (India) Ltd. Bartronics India Ltd. Nitco Tiles Ltd.

Sri Anjaneya Cotton Mills Limited Fatpipe Networks India Limited Fairdeal Supplies Limited Kamla Dials and Devices Limited Mission Pharmaceuticals Limited

Sadbhav Engineering Ltd.

Aurion Pro Solutions Ltd. Nelcast Limited Supreme Infrastructure

Corporate Restructuring
Karvy provides clients with strategic and practical solutions to financial challenges. The uniqueness of Karvys advisory capabilities lies in its ability to balance the objectives of the companies as well as that of the promoters. Our advisory services pertaining to Corporate Restructuring includes:

Buy Back of Shares

Delisting
Takeovers

Regulations for Buyback

SEBI (Buyback of Securities) Regulations,1998

Rationale for Buyback

Dilemma of free cash flow Normally when share price is depressed and the management perceives that the Company is undervalued.

To achieve or maintain a target capital structure

Signal to market and support price Prevent hostile takeovers Return capital to shareholders when you are in a mature industry or as tax efficient alternative to cash dividend Reduce minority shareholders

Major Buyback Issues Handled

Executed

Punjab Communications Limited Titanor Components Ltd The Nellimapathy Tea Produce Co. Ltd Heritage Foods (India) Ltd Bhagyanagar Metals Ltd The Sirpur Paper Mills Ltd Chordia Food Products Ltd Mro-tek Limited
Pipeline

Assam Carbon Products Limited

Regulations for Delisting

SEBI (Delisting of Securities) Guidelines - 2003

Rationale for Delisting

Consequent to public holding falling below the minimum limit specified in the listing conditions To avoid complying with the rigorous listing requirements Meagre or Nil trading on SEs Not traded at intrinsic values

Major Delisting Issues Handled

Executed Spencer and Company Limited Sharadha Terry Products Limited Ideaspace Solutions Limited SRP Tools Limited Rockwool (India) Limited Kadri Mills Limited Federal Technologies Limited Harisiddha Trading & Finance Limited Spectra Punj Lloyd Limited

Pipeline Quality Care India Limited

Regulations for Takeover

SEBI ( Substantial Acquisition of Shares and Takeovers) Regulations, 1997

Rationale for Takeover

Synergies in operations create economies of scale.

Global exposure compel companies to become more competitive.

More efficient and focussed by hiving off certain parts of their businesses and adding others. Shakeout in several sectors as a result of policy. Tax advantages from restructuring. changes in government

Consolidation of small and fragmented players

Major Takeovers Handled

Executed

Venkataramana Hotels Limited Stewarts & Lloyds of India Ltd SSI Limited Quintegra Solutions Ltd Pennar Industries Ltd Kerry Jost Engineering Ltd Raasi Refractories Ltd WPIL Ltd Saag Mauritius Ltd TTK Healthcare Ltd RR Greenhands Infrastructure Ltd Advanced Micronic Devices Ltd.

Pipeline WPIL Limited

Private Placement
Raising capital through a private placement of a companys securities is an effective and timely alternative to a public offering. A company can consider such financing at an early stage in its development or as interim financing until a public offering can be completed. Private placement or private investment capital is money invested in the company usually from private investors in the form of stocks and sometimes bonds. Karvy's nation-wide presence and excellent rapport with Financial Institutions (FIs) and High Net worth Individuals (HNIs) enable speedy and immaculate private placements of debt and equity. We have mobilized more than Rs.10,000 crores to Government of Andhra Pradesh in the form of debt. Our financial presentations have been well appreciated by the Institutional Investors and High Net worth clients.

Karvy Investor Services Limited

Karvy has obtained its Merchant Banking License in 1995.

Since 1995, Karvy has handled over 150 issues in various capacities
Evolving into top league Investment Banker

Strong execution team

Excellent institutional relationships Offices established in Dubai and New York to tap FII and NRI clientele

Corporate Finance Division

Corporate Advisory

Equity Placement

M&A Advisory

Debt Syndication

Objective

Flawless execution to meet diverse client needs Wealth Maximization Relentless improvisation Identifying investment opportunities Exceeding Expectations
Wealth Satisfaction Client Avenues Strategies

Knowledge

Services Offered

Equity Placement

Private Placement of Equity PIPE: Private investment in Public Equity QIP: Qualified Institutional Placement. Venture Funding ADR / GDR

Corporate Advisory

Business Plan Public Private Partnership Advisory Strategic Project Advisory Financial Reengineering Project Identification Corporate Restructuring

Mergers & Acquisition

Buy Side Transaction Sell Side Transaction Leveraged Buyouts Management Buyouts Divestiture

Debt Syndication

Term Loan Working Capital Loan Mezzanine Financing ECB/ FCCB Project Financing

Philosophy
Karvys Corporate Finance Group couples extensive experience and expertise with an intense commitment to build meaningful long-term client relationships.

Our Expertise

Our Understanding

Has collective investment banking and corporate finance experience, of 100 years Highly versatile team with execution experience in different types of transactions for various industries.

Personal attention and counseling to the clients. Understanding complex operational, strategic, and financial issues Offering value additions and creative solutions.

Client Focus

Small to medium enterprises in the emerging Growth Sectors.

A FULL SERVICE HOUSE

Full Service : Complete basket of equity capital market services, including public offerings, private placements, mergers and acquisitions, advisory, equity research, institutional distribution Network & Reach : Pan-India network of 550 owned branches is practically the best sales engine in the industry Research Driven : Equity research forms the essence of our business model and drives our investment banking, sales, trading & wealth mgmt. services Quality, Focused Advice and Execution : Research and investment banking professionals work as a team to provide domain expertise, execution and service After Market Support : Comprehensive market support, including focused equity research and fund manager meetings

Long Term Commitment : Senior-level attention not only during transactions, but throughout
Integrated Approach : Capabilities to deliver in all spheres of financial services

Thank You !