Professional Documents
Culture Documents
2011012708COM15109GE14Unit 2nd Primary Process Process Different Stages and Intermediariesprimary Market Process
2011012708COM15109GE14Unit 2nd Primary Process Process Different Stages and Intermediariesprimary Market Process
2011012708COM15109GE14Unit 2nd Primary Process Process Different Stages and Intermediariesprimary Market Process
– Appointment of intermediaries:
• Investment Bankers;
• Syndicate Members;
• Underwriters;
• Registrars to an issue;
• Share Transfer Agents;
• Bankers to an issue;
• Credit Rating Agency;
• Depositories;
• Legal Counsel and Auditors.
IPO - The Preparatory steps:
Intermediaries
Name Functions
Investment Banker Lead company thro IPO
Registrar to an issue Transfer of Securities
Banker Custodian of funds
Credit Rating Agency Grading of IPO
Depository/DP Demat/Custodian of
securities
Intermediate Stage – Filing of Draft Red Herring Prospectus:
– Financials,
– Objects of the issue,
– Reasons for raising money, the way money is proposed to be
spent and the return expected on the money,
– Project details,
– Details of promoters and management,
– Outstanding Litigations against the company and Directors,
– Auditors reports,
– Management discussion and analysis of financial
performance,
– Related party transactions and risk factors;
– Details of the Compliance Officer appointed for the issue.
Post DRHP filing with SEBI:
– The cap price should not be more than 1.2 time floor price.
• French Auction:
Advantages:
– offers a nation wide bidding facility in securities;
– Costs involved in the issue are far less than those in a normal IPO.
Pre-final Stage: Closure of IPO
• After completion of bidding, IPO is finally closed;
• Filing of prospectus with ROC after pricing and inclusion of material contracts and documents;
IPO Process
Name Functions
• A bid within a notified price range with the number of shares to be made, alternatively a
retail investor can bid at cut off price.
• A investor can bid with three options at the time of bidding, i.e. he can mention three
combinations of price and quantity preferences in the same bidding form.
• After a bid is submitted, it is uploaded to the electronic platform of the stock exchange.
• A Retail investor can revise his bid any time before closure of the issue.
ASBA:
Application Supported by Blocked Amount:
– Facility for RI’s who bid at cut-off price.
– Investor not required to pay any amount at the time of
application.
– Investor authorises his banker to block an equivalent amount
in his account.
– Amount is debited only when allotment is made in favour of
the investor.
– It doesn’t involve any refund.
– Till the allotment is made, investor earns interest on the money
lying in the account.
Allotment Process:
• Allotments of shares are made within 15 days from the date of
the closure of issue.
35:15:50