Presentation on:-

IPO Process

Presented by:
Rahul Gakhreja
INITIAL PUBLIC OFFER
(IPO)


 The first public offering of equity shares or

convertible securities by a company is
known as Initial Public Offering (IPO).


 Whereas, all the subsequent public

offering are known as Follow-on Public
Offering.
Reasons to go Public
•
• Capital for fresh investment
• Beneficial for the follow-on issues
• Enhancing the reputation & visibility
• Better Valuation of the company
• Providing liquidation to the existing
shareholders
• Corporate Governance
•
•
Parties Involved
• Issuer Company
• Lead Managers
• Syndicate Members or
Underwriters
• SEBI
• Registrar
• Investor
•
I.P.O. Process
• Issuer Company - IPO Process
Initialization
• Lead Manager's - Pre Issue Role - Part
1
• SEBI – Prospectus Review
• Lead Manager - Pre Issue Role - Part 2
• Investor – Bidding for the public issue
IPO Process (Continued)
• Lead Manager – Price Fixing
• Registrar - Processing IPO Applications
• Lead manager – Stock Listing
•
Issuer Company - IPO
Process Initialization
– Appoint lead manager as book
runner.
– Appoint registrar of the issue.
– Appoint syndicate members.

Lead Manager's - Pre Issue
Role - Part 1
–
– Prepare ‘draft offer prospectus’ for
IPO.
– File ‘draft offer prospectus’ with SEBI.
– Road shows for the IPO.

SEBI – Prospectus Review

–SEBI review draft offer

prospectus.
–Revert it back to Lead Manager
if need clarification or changes
(Step 2).
–SEBI approve the draft offer
prospectus, the draft offer
prospectus is now become
Offer Prospectus.

Lead Manager - Pre Issue Role - Part 2

– Submit the Offer Prospectus

– Decide the issue date & issue
price band
– Modify Offer Prospectus with date
and price band. Document is now
called Red Herring Prospectus.
– Red Herring Prospectus & IPO
Application Forms distributed to
investors

Investor – Bidding for the public
issue (Book Building)
– Public Issue Open for investors
bidding.
– Investors fill the application forms
and place orders to the syndicate
members .
– Syndicate members provide the
bidding information to BSE/NSE.

Book Building (cont.)

– Syndicate members send all the

physically filled forms and
cheques to the registrar of the
issue.
– Investor can revise the bidding by
filling a form and submitting it to
Syndicate member.
– Public Issue Closes for investors
bidding.

Lead Manager – Price Fixing


– Based on the bids received, lead

managers evaluate the final issue
price.
–
– Lead managers update the 'Red
Herring Prospectus' with the final
issue price and send it to SEBI and
Stock Exchanges.

Registrar - Processing IPO Applications

– Receiving application forms & cheques

from Syndicate members.
– They feed applicant data & additional
bidding information on computer
systems.
– Send the cheques for clearance.
– Find all bogus application.

Processing IPO APP. (Cont.)

–
– Finalize the pattern for share allotment
based on all valid bid received.
– Prepare 'Basis of Allotment'.
– Transfer shares in the demat account of
investors.
– Refund the remaining money though
ECS or Cheques.
Lead manager – Stock Listing


– Once all allocated shares are

transferred in investors dp
accounts, Lead Manager with the
help of Stock Exchange decides
Issue Listing Date.
– Finally share of the issuer
company gets listed in Stock
Market.

QUERIES….If any!!
THANK YOU !!!