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A Study On Ipo Issue Documents and Their Past Listing Performance
A Study On Ipo Issue Documents and Their Past Listing Performance
ON
A STUDY ON IPO ISSUE DOCUMENTS AND THEIR
IN APPLIED MANAGEMENT
By
ANNAMALAI NAGAR
2008
Page No. 1
DECLARATION
Management is my original work and the project has not formed the basis for
the award of any degree, diploma, associate ship, fellowship or similar other
titles. It has not been submitted to any other university or Institution for the
Page No. 2
ACKNOWLEDGEMENT
Guide, Mr. Praveen Mehta for his counsel and guidance during the preparation
of this project.
My thanks are due to Mr. Manish Goyal and Mr. Bharat Kuldeep to
Page No. 3
CERTIFICATE
Certified that the project is a work done by Mr. Dinesh Soni during the period
of his study under my guidance, and that the project has not previously formed
the basis for the award of any degree, diploma, associates hip, fellowship or
Date:
Page No. 4
TABLE OF CONTENT
Chapter Content Page No.
Acknowledgement III
Page No. 5
1.5 Limitations of the Study
39-40
• Other Source 42
Page No. 6
Page No. 7
Table No. Title of the Table
Page No.
Page No. 8
Table No. Title of the Diagram Page No.
Page No. 9
Chapter (1)
Page No. 10
Part-1.1
younger companies seeking capital to expand, but can also be done by large
price and time to bring it to market.Initial Public Offering (IPO) in India means
the selling of the shares of a company, for the first time, to the public in the
country's capital markets. This is done by giving to the public, shares that are
either owned by the promoters of the company or by issuing new shares. During
an Initial Public Offer (IPO) the shares are given to the public at a discount on
the intrinsic value of the shares and this is the reason that the investors buy
shares during the Initial Public Offering (IPO) in order to make profits for them
selves. IPO in India is done through various methods like book building
method, fixed price method, or a mixture of both. The method of book building
has been introduced in the country in 1999 and it helps the company to find out
Page No. 11
the demand and price of its shares. A merchant banker is nominated as a book
runner by the Issuer of the IPO. The company that is issuing the Initial Public
Offering (IPO) decides the number of shares that it will issue and also fixes the
price band of the shares. All these information are mentioned in the company's
red herring prospectus. During the company's Initial Public Offering (IPO) in
India, an electronic book is opened for at least five days. During this period of
time, bidding takes place which means that people who are interested in buying
Company makes an offer within the fixed price band. Once the book building is
closed then the issuer as well as the book runner of the Initial Public Offering
(IPO) evaluate the offers and then determine a fixed price. The offers for shares
that fall below the fixed price are rejected. The successful bidders are then
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IPO’s can be a risky investment. For the individual investor, it is tough to
predict what the stock or shares 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
company. Also, most IPO’s are of companies going through a transitory growth
period, and they are therefore subject to additional uncertainty regarding their
future value
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REASONS FOR LISTING
invariably look to issue additional new shares in order to raise extra capital at
the same time. The money paid by investors for the newly-issued shares goes
directly to the company (in contrast to a later trade of shares on the exchange,
company to tap a wide pool of stock market investors to provide it with large
volumes of capital for future growth. The company is never required to repay
the capital, but instead the new shareholders have a right to future profits
dissolution.
Page No. 14
The existing shareholders will see their shareholdings diluted as a proportion of
the company's shares. However, they hope that the capital investment will make
In addition, once a company is listed, it will be able to issue further shares via a
rights issue, thereby again providing itself with capital for expansion without
incurring any debt. This regular ability to raise large amounts of capital from
the general market, rather than having to seek and negotiate with individual
The increase in the capital: An IPO allows a company to raise funds for
Liquidity: The shares once traded have an assigned market value and can be
with stock incentive packages and the investors are provided with the option
Page No. 15
Valuation: The public trading of the shares determines a value for the
provides the share holders of the company with the present value of the
shares.
IPO as it can increase the wealth of the company, without dividing the
Page No. 16
IPO MARKET IN INDIA
The IPO Market in India has been developing since the liberalization of the
Indian economy. It has become one of the foremost methods of raising funds for
The IPO Market in India is on the boom as more and more companies are
issuing equity shares in the capital market. With the introduction of the open
market economy, in the 1990s, the IPO Market went through its share of policy
was the disassembling of the Controller of Capital Issues (CCI) and the
This step helped in developing the IPO Market in India, as the companies were
permitted to price the issues. The Free pricing mechanism permitted the
The Central Government felt the need for a governed environment pertaining to
the Capital market, as few corporate houses were using the abolition of the
Exchange Board of India (SEBI) was established in the year 1992 to regulate
the capital market. SEBI was given the authority of monitoring and regulating
other intermediaries related to the stock markets. The effects of the changes are
Page No. 17
evident from the trend of the resources of the primary capital market which
includes rights issues, public issues, private placements and overseas issues.
The IPO Market in India experienced a boom in its activities in the year 1994.
In the year 1995 the growth of the Indian IPO market was 32 %.
The growth was halted with the South East Asian crisis.
The markets picked up speed again with the introduction of the software stocks.
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IPO ALLOTMENT STATUS
Initial public offering is also popularly known as IPO, is the first time sale
of stocks, of a private company. A new company can launch IPO to raise capital
to initiate its business. Moreover, Initial Public Offering can also be launched to
company. The sale of stock through such Initial Public Offering (IPO) is meant
for the individual and corporate investors. The aim of such issuance of Initial
Public Offering is to invest the accumulated corpus for, either opening -up of a
building or expansion of the said company. The shares held by such investors
give them the rights of the company and to its future profits. The process which
involves determination of the issue size and type, offer price and best time of
investment bankers are allotted some specified numbers of shares to sell, which
In other words, IPO Allotment Status can also be defined as the number of
before the share is being traded on an exchange. The excess shares are then
allotted to other investment bankers which are eligible to sell such shares. In
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India, the main governing body that determines such eligibility criteria and the
IPO Allotment Status is the Securities and Exchange Board of India (SEBI).
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IPO - PROCEDURE
The company offering its shares, called the "issuer," enters a contract with a
lead underwriter to sell its shares to the public. The underwriter then approaches
The sale (that is, the allocation and pricing) of shares in an IPO may take
• All-or-none contract
• Bought deal
• Dutch auction
one or more major investment banks (lead underwriter). Upon selling the
of the shares sold. Usually, the lead underwriters, i.e. the underwriters selling
some cases.
Multinational IPOs may have as many as three syndicates to deal with differing
legal requirements in both the issuer's domestic market and other regions. For
Page No. 21
example, an issuer based in the E.U. may be represented by the main selling
selling groups for US/Canada and for Asia. Usually, the lead underwriter in the
main selling group is also the lead bank in the other selling groups.
Because of the wide array of legal requirements, IPOs typically involve one or
more law firms with major practices in securities law, such as the Magic Circle
firms of London and the white shoe firms of New York City.
Usually, the offering will include the issuance of new shares, intended to raise
new capital, as well the secondary sale of existing shares. However, certain
Public offerings are primarily sold to institutional investors, but some shares are
offering; the purchase price simply includes the built-in sales credit.
The issuer usually allows the underwriters an option to increase the size of the
The first sale of stock by a private company to the public. IPOs are often issued
by smaller, younger companies seeking the capital to expand, but can also be
Page No. 22
an IPO, the issuer obtains the assistance of an underwriting firm, which helps it
offering
Eligibility Criteria:
• Net Tangible assets of Rs. 3.00 Crore in each of the preceding 3 years.
1000
Page No. 23
Official Process of IPO
• Allotment of shares
• Listing of shares
Page No. 24
Part 1.2
To analyze the returns of IPO’s which were issued in the 1st quarter of 2007.
To know the return of those IPO’s for 1 month, 3 months, 6 months, and 1
year.
Find out the factors which influence the IPO Listing Process.
What the companies are looking from Open New IPO’s in India?
Page No. 25
OBJECTS OF THE OFFERING NEW IPO
Funds Requirement
Appraisal
Schedule of Implementation
Funds Deployed
Tax Benefits
Page No. 26
Part 1.3
The Advantages of IPO are numerous. The companies are launching more
and more IPO’s to raise funds which are utilized for undertakings various
factor for the immense growth of the same in the last few years. The IPO or the
initial public offering is a term used to describe the first sale of the shares to the
public by any company. All types of companies with the idea of enhancing
growth launch IPOs to generate funds to cater the requirements of capital for
IPO has a number of advantages. IPO helps the company to create a publi
The increase in the capital: An IPO allows a company to raise funds for
Liquidity: The shares once traded have an assigned market value and can
Page No. 27
employees with stock incentive packages and the investors are provided
Valuation: The public trading of the shares determines a value for the
provides the share holders of the company with the present value of the
shares.
IPO as it can increase the wealth of the company, without dividing the
Page No. 28
Drawbacks of IPO’s
It is true that IPO raises huge capital for the issuing company. But, in
expenses have to be incurred in the form of legal fees, printing costs and
expenses might cost hundreds of US dollars. Apart from such enormous costs,
there are other factors as well that should be taken into consideration by the
Such factors include the rules and regulations involved to set up public
offerings and this entire process on the other hand involve a number of
of the task. After the IPO is introduced, the expenses become a routine in every
activity involved. Besides, the CEO of the company would have to spend a lot
same. All these aspects, if not handled with efficiency, prove to be some major
The launch of IPO also brings about shareholders of the company. Shareholders
have ownership in the company. The primary owners of the company or the
Page No. 29
people holding maximum authority in the company cannot take decisions all by
themselves once an IPO has been launched and shareholders have been formed.
taken even if they do not hold 50 percent share of the company. They have their
the company, meetings, and also approvals from them while making important
business decisions.
A major risk with shareholders is that, they can sell off their stocks any time
they want, in case they see the price band of the stakes of that company is going
down. This will lead to a further drop of the value of shares in the market which
Page No. 30
EXAMPLE OF SOME PUBLISHED ISSUE’S
India Inc's fund raising via IPO in 2008 dips to 3-yr low- The Economic
Time
India Inc raises over Rs 45,000 cr in IPOs, follow-ons in 2007- The Hindu
Page No. 31
Part 1.4
India’s rapid economic growth, robust corporate profit stability, and a four-
year bull run on Bombay’s Stock Exchange (BSE), continue to fuel India’s
strong IPO markets. “Keen investor interest in India’s strong growth story has
been real acted in the attractive valuations and key price/earnings multiples
Growth Markets, Ernst & Young India. In 2006, India’s markets launched 78
IPO’s and raised US$7.23 billion. Currently, India’s exchanges rank eighth in
the world for numbers of IPO’s and value in 2006. Despite a May 2006 market
tumble that erased more than US$100 billion in value in the BSE and sparked
concerns that the four-year Indian stock rally was over, Indian IPO activity
quickly resumed its upward momentum. In 2006, India’s IPO market has been
fairly broad-based, although energy companies dominated with more than 50%
share of funds raised. In 2006, India’s largest IPO was petroleum rife nine
company, Reliance Petroleum, which raised US$1.8 billion, followed by the oil
billion. Real estate IPO’s also generated stellar returns for investors.
Page No. 32
In the United States, during the dot-com bubble of the late 1990s, many venture
capital driven companies were started, and seeking to cash in on the bull
market, quickly offered IPO’s. Usually, stock price spiraled upwards as soon as
Initial founders could often become overnight millionaires, and due to generous
stock options, employees could make a great deal of money as well. The
majority of IPOs could be found on the NASDAQ stock exchange, which lists
and untested firms (often in multiple rounds of financing), the vast majority of
them rapidly entered cash crisis. Crisis was particularly likely in the case of
firms where the founding team liquidated a substantial portion of their stake in
the firm at or soon after the IPO (Mudambi and Treichel, 2005).
This phenomenon was not limited to the United States. In Japan, for example, a
that their only goal was to have an IPO. Some stock exchanges were set up for
Perhaps the clearest bubbles in the history of hot IPO markets were in 1929,
when closed-end fund IPOs sold at enormous premiums to net asset value, and
in 1989, when closed-end country fund IPOs sold at enormous premiums to net
asset value. What makes these bubbles so clear is the ability to compare market
Page No. 33
prices for shares in the closed-end funds to the value of the shares in the funds'
portfolios. When market prices are multiples of the underlying value, bubbles
The IPO industry in India has received a major boost in the current year
especially with the emergence of Reliance Power IPO on 15th January 2008.
Apart from Reliance Power, another IPO which brought in major capital is
Kishore Biyani-led Future Group's financial services arm. This IPO has been a
equity shares on offer. The public offerings of the IPO of Kishore Biyani-led
Future Group's financial services arm are estimated to rise around Rs. 490
crores future capital. The price range fixed for the Equity shares of this IPO
varies between Rs. 700 to Rs. 765. The subscription for the issue of this IPO
was opened from 11th January 2008 to 16th January 2008. Future of IPOs in
India is quite bright as the Future Capital Holdings in India are expected to rise
up to USD 124 million by the end of 2008. Future Capital, the financial services
arm of the diversified Future Group is expected to divest around 10.16 percent
of its capital which accounts for around 6.4 million shares in the IPO market. In
the year 2007, the IPO market in India has been estimated to raise USD 8.2
billion from 88 IPOs as compared to USD 4.7 billion in the previous year. It
Page No. 34
Assuming a major hike in the Indian IPOs, the government has confirmed the
opening of the Oil India IPO by March 2008. The IPO of Oil India Limited has
been reported to raise Rs.1500 crores and will hit the capital market in March
2008.
Page No. 35
WHAT ARE THE CRITICAL AREAS TO
FOCUS
Underwriting Agreements
Firm Allotments
Statutory advertisements
SEBI GUIDELINES
Filing of prospectus:
Prospectus to be filed with SEBI through Merchant Banker At least 30 days <
filing with ROC SEBI may suggest changes < 30 days SEBI to consider only
• Issuer is obligated
Page No. 36
Application for Listing:
Dematerialization of shares:
Agreement with Depository Present shares also to be in demat public may opt
• Mutual funds;
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Exemption from Eligibility Norms:
IDFC
IPO Grading:
• No IPO unless; (as on the date of filing the prospectus with ROC):
• Grading for IPO has been obtained from at least one agency
• No IPO, if there are any shares partly paid up as on the date of IPO
Price Band:
Page No. 38
• Board of directors may be authorized to fix the price
Denomination of shares
• In case the issue price is <Rs.500, the Face Value shall be Rs.10/-
• The Face Value may be less, where the issue price is Rs.500 or more
• Understandable language
• No advertisement in Crawlers
Page No. 39
• The print size shall not be less than point size 7
Part 1.5
More often than not, the pricing of any IPO is what influences the
decision of any investor. The rating agencies, in this case, will not talk about
``what price'' and ``what time'' aspects of the offer. Given that the decision to
invest or avoid investments in any IPO is most often a function of the pricing,
the lack of this aspect in the present IPO grading system could make the whole
could face trouble with rating the equities, which, unlike debt rating, is more
Markets, in the short term, can be price-driven and not purely motivated by
higher price could be a bad investment choice, while the not-as-good ones
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Despite having disclaimers, a higher graded IPO may well tempt small
investors into falsely believing that a high premium would come about on
listing.
Similarly, investors may get deluded by a low-graded IPO, which could become
investors.
Till such time the utility of the IPO grading system is unraveled, it is advisable
for investors to use the grades only as an additional input to make an informed
and valuations of an IPO, together with the grading, to make a final choice.
Page No. 41
Part 1.6
SOURCE OF DATA
systematic and standardize manner which are used for some further
the availability of necessary and useful data. Some time the data are available
readily in one form or the other and some time the data are collected afresh. The
sources of Data fall under two categories, Primary Source and Secondary
Sources.
Primary Data- the primary data was collected through the following
activities:
Secondary Data- the secondary data was collected through the following:
Page No. 42
OTHER SOURCE
Information Sources
Analysis Method
Page No. 43
Chapter (2)
Page No. 44
Part 2.1
world IPO markets of 2006–2007. Around the world, companies, investors, and
stock exchanges think and act much more globally, often looking outside
high growth
opportunities. In the
effects of globalization:
flourishing stock
rivalry between the world’s stock exchanges, the rise of more world-class
financial centers, the boom in large listings on local exchanges, and the
a key player behind so many large IPO’s. In 2007, globalizing capital and a
surge in IPO ready companies worldwide are broadening the horizons of the
Page No. 45
GREATER CHINA
KEY TRENDS:
• A dual-listing trend and budding rivalry emerges for the Hong Kong and
Driven by yet another year of rapid economic growth and robust secondary
markets in 2006, Greater China’s IPO market soared to an all-time high, with
US$56.6 billion raised in 175 offerings. With conspicuous success, the Hong
state-owned banks — including the world’s largest IPO ever, the Industrial and
Commercial Bank of China (ICBC) with US$21.9 billion raised, and the second
largest offering, Bank of China (BOC) which raised US$11 billion. The ICBC
issuance was also the first time in China that shares were dual-listed.
Page No. 46
INDIA
KEY TRENDS:
• Cross border activity and the role of foreign capital continue to grow.
• The private equity rush into India has lead to a potential for many IPO
exits.
Page No. 47
EUROPE
KEY TRENDS:
• Europe’s IPO markets rose to an all-time high in 2006, and remain high-fl
years in
equity.
• London has become the top listings destination for cross-border issuers
AlterNet, and Deutsche Brose’s Entry Standard, are thriving with small-
cap activity.
peers, low interest rates, and vigorous secondary stock markets galvanized its
IPO markets in 2006 and 2007. For the second year in a row, Europe’s
companies listing in London. Another key source of capital in Europe has been
Page No. 48
MIDDLE EAST
KEY TRENDS:
• After three years of record growth, most Middle East markets endured
Page No. 49
CIS/RUSSIA
KEY TRENDS:
in London.
• As the private equity market remains undeveloped, IPOs are by far the
Page No. 50
AUSTRALIA
KEY TRENDS:
• Rising commodity prices and demand from Asia fuel thriving resources
• A recent surge in private equity will lead to many IPO exits in next 12–24
months.
As Australian stock markets rise for the fourth year in a row, Australia’s stable
economy, record corporate profi ts and booming resources sector have led to an
raising US$4.2 billion, with many listings in the resources and energy sector.
The largest Australian IPO of 2006 was explosives maker Dyno Nobel worth
US$800 million.
Page No. 51
UNITED STATES
KEY TRENDS:
• Most global companies list at home, rather than in the US, as local markets
In the past 18 months, the vitality of the US stock market has whet investor
appetite for risk, and spurred US-domiciled IPO numbers to record heights.
Although some market watchers blame US regulations for the rise in non-US
the trend as it has lead to stronger, more liquid, competitive markets worldwide.
For a truly global company, a US listing is still seen as the “gold standard” with
strategic advantages.
Part 2.2
Page No. 52
UPCOMING IPO IN THE MARKET
Initial Public Offer (IPO) in India, means the first sale by a private company of
its shares to the public. Initial Public Offers (IPOs) in India, are usually issued
by small companies but at the same time big private companies also go public
The Upcoming IPOs in India are being issued by those private companies that
want to sell their shares in the country's capital markets. Many companies are
Securities Ltd.
• Mahindra Holidays & Resorts India Ltd whose lead manager is HSBC
Ltd.
Page No. 53
• Resurgere Mines & Minerals India Ltd whose lead manager is Motilal
• Kiridyes and Chemicals Ltd whose lead manager is Centrum Capital Ltd.
• Neel Metal Products Ltd whose lead manager is ICICI Securities Ltd.
• Jhaveri Flexo India Ltd whose lead manager is SREI Capital Markets Ltd.
• Gokul Refoils And Solvent Ltd whose lead manager is Intensive Fiscal
• Oil India Ltd. whose lead manager is Citigroup Global Markets India Pvt,
Ltd.
Company Ltd.
• Oswal Wollen Mills Ltd. whose lead manager is UTI Bank Ltd.
• Uma Precision Ltd. whose lead manager is Karvy Stock Broking Ltd.
• Future Ventures India Ltd. whose lead manager is Enam Securities Ltd.
• Cox & Kings (India) Ltd. whose lead manager is Enam Securities Ltd.
Page No. 54
• Jaiprakash Power Ventures Ltd whose lead manager is Enam Securities
Ltd.
• Aishwarya Telecom Ltd. whose lead manager is SREI Capital Markets Ltd.
• ACME Tele Power Ltd. whose lead manager is Kotak Securities Ltd.
Ltd.
• Ramsarup Lohh Udyog Ltd. whose lead manager is Microsec Capital Ltd.
Chapter (3)
Page No. 55
Page No. 56
Part 3.1
The IPO market in India has been growing at a massive pace for the past
few years. With the advent of some leading IPOs in India, the country has
become the largest IPO market across the globe so far. India has saved almost
USD 3.3 billion proceeds in the global IPO market from eight deals of late. As
has been estimated by Thomson Financial, the biggest contributor to these deals
has been the USD 3 billion IPO of Reliance Power. The second largest IPO in
India is Emaar MGF which is a USD 1.6 billion IPO. Emaar MGF has revised
the price range for the Equity shares. Initially it was Rs 540-630 per share
which now costs Rs 530-630 per share. A report by Thomson Financial states
that India has occupied 49.1 percent of the global IPO proceeds in the current
year 2008 as compared to 3.7 percent in the year 2007. The global IPO market
developing an ambitious Rs 30,000-crore hill city project here, has deferred its
Page No. 57
Bharat Oman Refineries defers plans to raise funds through IPO
deferred its earlier plans to raise funds through an initial public offer, due to
ONGC mulls IPO for Rs 12,440 cr plant, gives 19% stake to GAIL
state gas utility GAIL India a 19 per cent stake in the mega project.
Public issue of Tata Group firm Tata Capital got subscribed over six times of
the offer, receiving bids worth over Rs 3,000 crore, driven by robust response
public offerings (IPOs) graded by Crisil since May 2007, the rating agency said
in a release on Thursday.
Page No. 58
Ratings agencies are likely to increasingly look at corporate governance as a
effort last year had to be shelved at the last moment when the stock markets
Page No. 59
Part 3.2
MAJOR PLAYER OF IPO IN INDIA
Some of the leading IPOs in India include Reliance Power Limited IPO,
Tulsi Extrusions Limited IPO, Onmobile Global Limited IPO, EMAAR MGF
IPO, Future Capital Holdings Limited IPO and many more. All these IPOs have
opened their subscriptions in 2008. India has saved almost 3.3 billion proceeds
in the global IPO market through eight deals which has made it the largest IPO
market across the globe. Reliance Power IPO has been the biggest contributor
in this regard
The Initial Public Offering (IPO) is defined as the first set of stocks that are sold
out by a company to the public in order to seek an expansion of the capital. The
IPO is usually set up by the smaller or newly emerging companies but the large-
scale companies also go for it in order to become publicly traded. The issuer is
faced with important considerations like the security of the issue, price band
offered for the same and the time for sale. It is a risky affair for any individual
investor as he or she does not have any clue regarding the performance of the
Page No. 60
Top Companies: An analysis
Reliance Power IPO has been issued by
was issued on 15th January, 2008 and closed on 18th January, 2008. Reliance
Power Limited Company is planning to generate capital worth Rs. 11, 700
crores through the IPO. This makes it the largest IPO in the country as on 17th
January, 2008. The price band of the equity shares of Reliance Power IPO has
The total size of Reliance Power IPO is around 26 crores equity shares.
Reliance Power IPO will be listed on the National Stock Exchange (NSE) and
also on the Bombay Stock Exchange (BSE). The lead bankers of Reliance
Power IPO are Enam Securities, Kotak Mahindra Capital Co, ABN Amro
Rothschild, ICICI Securities, JP Morgan Chase & Co, UBS AG and Deutsche
Bank AG.
The main objective of Reliance Power IPO is that the proceeds from the issue
will be used to fund the power generation projects that the company plans to
carry out.
Page No. 61
BGR Energy System (India) Ltd. was incorporated in 1985.
producing and selling different kinds of equipments, services and systems for
power, refinery, gas & oil, and petrochemical industries .BGR Energy IPO was
issued on 5th December, 2007 and closed on 12th December, 2007. The total
size of BGR Energy IPO is 9,136,000 equity shares of Rs. 10 each. Out of the
total number of equity shares around 500,000 has been reserved for the
employees of the company and about 8,636,000 have been issued to the public.
The price band of BGR Energy IPO has been fixed between Rs. 425 and Rs.
480.
BGR Energy IPO was listed on the National Stock Exchange (NSE) and also on
the Bombay Stock Exchange (BSE). The registrar of BGR Energy IPO was
Intime Spectrum Registry Ltd. The lead managers of BGR Energy IPO were
CLSA India, SBI Capital Markets, UBS Securities India, and Kotak Mahindra
Capital. The minimum order quantity for BGR Energy IPO was fourteen shares.
The maximum amount for subscription in BGR Energy IPO for the retail
Page No. 62
The Cinemax India IPO was launched in the
The Cinemax India IPO was launched with the purpose of utilizing the funds
The proceeds from the IPO would also be used for the general corporate
purposes which include acquisitions.Cinemax India has filed its red herring
Some the places where the Cinemax India is planning to set up theaters are
operating in several locations throughout the country. All together in the year
Kanakia Group. In the year 2006, the total annual income was Rs 438.60
Page No. 63
ICICI Bank IPO was launched on June 18,
ICICI Bank raised Rs. 10,000 crores from investors from its Initial Public
Offerings (IPO). ICICI Bank's domestic issue is part of a USD 5 billion capital
raising program. ICICI IPO offered discount rates to its retail investors. The
subscriptions of ICICI IPO closed on 22nd June 2007. One of the chief focuses
of ICICI IPO was to generate interest among the retail investors keeping in
view the prevailing market price of around Rs. 903. The ICICI Bank IPO has
reportedly crossed the expected subscription amount by 10.5 times. The public
ICICI Bank has planned up to elevate another USD 2.5 billion from the issue of
American Depository Receipts. ICICI Bank has also decided to raise money by
selling off the shares of its investment company for insurance business. This
selling off of shares of the investment company of ICICI Bank will be cleared
by RBI and IRDA. In 2007, ICICI Bank has got the approval from the Foreign
percent equity from ICICI Bank. The bank has also decided for a shifting of its
Page No. 64
Indian Bank was established on 15th August
India. Indian Bank IPO was issued in February 2007, almost 100 years after the
bank was established. The issue of Indian Bank IPO was opened on 5th
February, 2007 and closed on 9th February 2007. The size of the Initial Public
Offering (IPO) of Indian Bank was 85,950,000 equity shares. It was done
through 100 percent book building and had a face value of Rs.10. The retail
segment was given 23,206,500. The price range varied from Rs.77 to Rs.91 and
the tick size was Re.1. The minimum number of shares to be purchased was
kept at 75. The retail investors were given the maximum subscription amount of
Rs.100,000. The total size of Indian Bank IPO was estimated to be around
Rs.782 crores.
• To provide capital adequacy for it's loan and investment portfolio section.
Indian Bank has more than 22,000 employees. The Indian Bank has 1411
branches spread all across the country. Indian Bank offers diversified banking
services and has three subsidiary companies. The foreign branches of Indian
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Kingfisher till date has not launched any IPO, but
expansion plans in India. The accumulated corpus would be utilized to fund its
airline business and to payoff debt for its acquired liquor company Shaw
Breweries Group. The brand is being used for two business entities - Airlines
and Alcoholic Beverage. The Airlines operates under the name of "Kingfisher
"Mineral Water" under the same brand name. Till now the company has not
launched any IPO to fund its aggressive expansion plans, but plans to launch it
in near future to raise capital. Dr Vijay Mallya is the Chairman and CEO of
both the segments. The Chief of the United Breweries Holding Ltd (UBHL),
Mr Vijay Mallaya, said that the group would come up with an Initial Public
Offering in 2008 and would raise a total corpus of US$ 400 million. The Initial
Public Offering of the Kingfisher Airlines would target a corpus of US$ 200
million and the rest would be raised through the IPO of the liquor
business.Kingfisher Airline IPO, to be issued for the first time in the year 2008,
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KNR Constructions Ltd. IPO has been issued by
such as to meet the company's requirement for working capital and to purchase
various sectors like irrigation, highways & roads, and management of the
had around twenty four projects in the various states of India that included
Assam, Tamil Nadu, Uttar Pradesh, Karnataka, Andhra Pradesh and Madhya
Pradesh.
The issue of KNR Constructions Ltd. IPO was opened on 24th January and
closed on 29th January, 2008. The total number of shares issued by KNR
Constructions Ltd for its KNR Constructions Ltd. IPO is 7,874,570 equity
shares at the face value of about Rs. 10 each. The company plans to raise
through KNR Constructions Ltd. IPO around Rs. 142 crores from the Indian
capital market. KNR Constructions Ltd. IPO has been listed on the National
Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The lead manager
of KNR Constructions Ltd. IPO is Axis Bank Limited. The registrar of KNR
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Manjushree Extrusions Ltd IPO was
Ltd IPO by the company were to use the proceeds to expand the operations of
the company and also to meet the requirement of the working capital.
The lead manager of Manjushree Extrusions Ltd IPO was Centrum Capital
Limited. The registrar of Manjushree Extrusions Ltd IPO was Alpha Systems
Private Limited and it was listed on the Bombay Stock Exchange (BSE). The
total size of the equity share of Manjushree Extrusions Ltd IPO was around Rs.
23.07 crores. The face value of per equity share of Manjushree Extrusions Ltd
IPO was Rs. 10. The maximum amount of subscription by the retail investor
the production of plastic packaging items like containers and jars. Manjushree
net profit of Manjushree Extrusions Ltd came to Rs. 112.42 lacs in 2004- 2005.
In 2005- 2006 this figure stood at Rs. 137.11 lacs and in the following year,
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The Maruti IPO has set a price range of Rs. 125 per share
above the Floor price of Rs. 115. The subscription for Maruti
IPO opened on June 12, 2003 and closed on June 19, 2003. The
ten times.
The government decided to shell out 85 percent shares of IPO to the non-
worth individuals. Consequently, government would get Rs.993 crores for 7.94
crores shares. But SEBI recommended that 60 percent can be given to the
institutional investors but at least 40 percent should be allotted for the retail
investors as well. The government has allotted 60 percent shares to the retail
investors and 40 percent shares to the institutional investors. The shares were
allotted to the individuals on a pro rata basis. The IPO of Maruti is claimed to
be one of the biggest capital market transactions in recent years in India and
also the largest Book Built IPO that has been implanted in India till date. Maruti
IPO received more than 300,000 applications which is a record in the history of
IPO in India. The majority of applicants to these comprise of the Indian retail
investors. They received the allotments on the basis of the price range already
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The subscription of Power Grid Corporation of India
of India IPO was between Rs. 44 and Rs. 52. The proceeds
from Power Grid Corporation IPO were submitted to the National Investment
Fund (NIF). Citigroup, Kotak and Enam were the lead managers for the Power
Grid Corporation IPO. Karvy Computershare private limited was the registrar
In the year 2006, Power Grid Corporation of India Limited (PGCIL) reported a
28 percent jump in the net profit which amounted to Rs 1,009 crores. The
company launched their IPO in 2007 and the subscription was opened from
10th September 2007 to 13th September 2007. The shares of the IPO of Power
Grid Corporation of India had a price range of Rs. 44 to Rs. 52 per share. The
funds raised from Power Grid Corporation IPO were submitted to the National
Investment Fund (NIF). The lead managers of the IPO of Power Grid
India (PGCIL) raised a capital of Rs 6,000 crores through the IPO. The
proceeds from the IPO will be used to set up branches in almost 12 countries
across the globe. A unit will be set up in China in order to provide consultancy
services, accomplish several projects and operate transmission lines and grid
network..
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The Reliance Petroleum IPO was launched by
price band for the Reliance Petroleum IPO was fixed between Rs 57 and Rs 62
The main purpose of launching the Reliance Petroleum IPO was to fund its
refinery project, which would be operational by the end of 2008. This refinery
special economic zone, annexed to its Jamnagar refinery in Gujarat. The said
refinery would have a capacity of 580,000 barrels of crude oil per day. Further,
it would also utilize a part of the accumulated fund for the setting-up of a
per annum. The Reliance Petroleum IPO was launched on 13th April 2006 and
the bidding was closed on 20th April. The price band for the Reliance
Petroleum IPO was fixed between Rs 57 and Rs 62 per equity share. This Initial
Public Offering of the Reliance Petroleum raised Rs 6,000 crores. The Reliance
Petroleum IPO issued 45 crores equity shares and raised Rs 2,790 crores at the
upper end of the price band. The Reliance Petroleum IPO was very popular
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Techpro Systems IPO will be issued by Techpro Systems
issue of Techpro Systems IPO will be around Rs. 250 crores approximately.
Techpro Systems IPO will be launched by the company Techpro Systems (TSL)
and the total size of the issue will be worth about Rs. 250 crores approximately.
Techpro Systems (TSL) plans to enter the Indian capital market with its Techpro
Techpro Systems IPO will consist of 7,300,000 equity shares and it will
Systems (TSL). The company has filed with SEBI its Draft Red Herring
Techpro Systems IPO are SBI and Kotak. Techpro Systems IPO is expected to
be issued in the last week of January, 2008. Techpro Systems IPO will ensure
that the company will have enough funds to take up developmental work and
systems bulk material handling that includes handling raw material systems for
cement plants, power, and steel. Techpro Systems (TSL) manufactures various
equipments like feeders, crushers, and screens and it also sets up conveyor
systems.
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Chapter (4)
Page No. 74
MAJOR FINDINGS
for 1 month.
year.
• Market return indicates that, 11 companies had given positive return for 1
month.
• Only 5 companies were able to give positive returns for all the periods.
• If date of listing is concerned then, ICRA Ltd offered highest rate of return
at 143.41%.
• Highest rate of return was offered by ICRA Ltd. For one month and 3
• For 6 months and 1 year, Orbit Corporation Ltd. Gave highest return i.e.
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• S.D. was lowest for Oriental Trimex Limited at 2.14, 1.62, 2.55, 3.88 for
• S.D. was highest for Autoline Industries Limited at 56.7 indicating that it is
• For 3 months, Advanta India Limited has the highest S.D. at 93.44
• For 6 months, Orbit Corporation Limited was riskiest than any other scrip
at 131.39
• Also, Orbit Corporation Limited has offered highest return for 6 month and
1 year.
Conclusion
IPO is used by a company to raise its funds. The extra amount obtained from
little to a company but it gives a way to get more money for long term
investments.
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Chapter (5)
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http://www.reliancemoney.com
http://en.wikipedia.org
http://finance.indiamart.com/india_business_information/sebi_investors_kno
whow.html
http://www.hinduonnet.com/2003/03/26/stories/2003032604291800.htm
http://demataccount.com/2008/01/15/learning-basic-concepts-of-ipo-india/
http://www.sebi.gov.in
http://www.google.com
http://www.economywatch.com/business-and-financial/IPO-industry
http://www.fibre2fashion.com/IPO-article
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