Grp 5 presentation on Public Issue
- 2. The process of offering securities to the investors by the company to raise funds. Basically when shares, bonds etc are made available for anyone to buy. The main purpose of the public issue is to raise money through public and get its shares listed at any of the recognized stock exchanges in India.
- 4. INITIAL PUBLIC OFFER : When an unlisted company makes either a fresh issue of shares or securities for the first time to the public. FURTHER PUBLIC OFFER : When an already listed company makes either fresh issue of shares or securities to the public.
- 5. ELIGIBILITY NORMS TO MAKE A PUBLIC ISSUE IN CASE OF UNLISTED COMPANIES Track record of Distributable profits for at least 3 out of 5 years. Net worth of at least 1 crore. Net tangible assets of at least 3 crores in each of the preceding 3 years. Aggregate of the proposed issue and past issue made in the same financial year does not exceed 5 times its pre-issue net worth. If companies has changed its name within last 1 year , then at least 50% revenue for the preceding 1 year is earned by the company must be from the activities suggested by new name.
- 6. IN CASE OF LISTED COMPANIES If companies has changed its name within last 1 year , at least 50% revenue for the preceding 1 year , is earned by the company from the activities suggested by new name. Aggregate of the proposed issue and past issue made in the same financial year does not exceed 5 times its pre issue net worth. ELIGIBILITY NORMS TO MAKE A PUBLIC ISSUE
- 7. PRE-ISSUE OBLIGATIONS : Board resolution Special resolution Appointment of various intermediaries Due diligence by merchant banker Preparation of draft offer documents and submitting the same with SEBI and Stock Exchange Carry out changes in draft offer documents, if specified by SEBI/Stock Exchange In-principle approval from Stock Exchange File final offer documents with SEBI/Stock Exchanges/ROC Statutory Advertisements Promoter Contribution
- 8. PROCEDURE FOR PUBLIC ISSUE POST-ISSUE OBLIGATIONS : Collection of applications forms Separate account for applications received from public File post issue monitoring report with SEBI Basis of allotment in consultation with regional stock Exchange Post issue advertisement Dispatch of share certificates / Refund order Entering into listing agreement Redressal of investor grievances
- 9. APPLICABLE LAWS Provisions of the Companies Act , 2013. Securities Contract ( Regulations ) Act , 1956. SEBI rules & regulations. Compliance of Listing Agreement with the concerned Stock Exchanges after listing of securities. RBI regulations in case of foreign / NRI equity participation.
- 10. PRICING OF PUBLIC ISSUE Fixed Price Process Book Building Process METHODS TO DETERMINE PRICING OF PUBLIC ISSUE
- 11. COMPANY PLANS AN IPO VIA BOOK BUILDING PROCESS BOOK BUILDING PROCESS APPOINT A MERCHANT BANKER AS BOOK RUNNER ISSUE A DRAFT PROSPECTUS (CONTAINING ALL MANDATORY COMPANY DISCLOSURES THAN PRICE) DRAFT PROSPECTUS FIELD WITH SIMULTANEOUSLY WITH CONCERNED AUTHORITY (SEBI)
- 12. CONTD … BOOK-RUNNER APPOINTS SYNDICATES MEMBERS AND REGISTERD INTERMIDIARIES TO GARNER SUBSCRIPTION PRICE DISCOVERY BEGINS THROUGH THE BIDDING PROCESS AT CLOSE OF BIDDING, BOOK RUNNER AND COMPANY DECIDE UPON THE ALLOCATING AND ALLOTMENTS
- 13. SOME IMPORTANT ISSUES PERTAINING TO PUBLIC ISSUE PROMOTER CONTRIBUTION AND LOCK-IN REQUIREMENT : IN CASE OF UNLISTED COMPANIES 20% of the POST ISSUE CAPITAL IN CASE OF LISTED COMPANIES 20% of the PROPOSED ISSUE or 20% of the POST ISSUE CAPITAL IN CASE OF COMPOSITE ISSUE BY LISTED COMPANIES 20% of the PROPOSED ISSUE or 20% of the POST ISSUE CAPITAL ( excluding right issue component ) Promoter contribution shall be in a lock-in period of 3 years. Promoters holding in excess of minimum promoter contribution shall be locked in for a period of 1 year.
- 14. TIME LIMIT FOR OPENING OF ISSUE MINIMUM PERIOD – 3 DAYS MAXIMUM PERIOD – 10 DAYS ( including another 3 days in case of revision ) OFFER DOCUMENT TO BE MADE PUBLIC SEBI (ICDR) REGULATIONS, 2009 The draft offer document filed with the board shall be made public for a period of 21 days from the date of filing of draft offer document with the board.
- 15. MINIMUM OFFER TO PUBLIC : PUBLIC ISSUE Qualified Institutional buyers – 75% Non Institutional Investor – 15% Retail Individual Investor – 10% LISTED COMPANY Minimum 25% of the post issue capital UNLISTED COMPANY Minimum 25% of the issue size ALLOCATION IN PUBLIC ISSUE : MINIMUM SUBSCRIPTION The minimum subscription to be received should not be less than 90% of the offer through offer document. SEBI (ICDR) REGULATIONS ,2009
- 16. COMPANIES RECENTLY GONE PUBLIC IN INDIA ISSUER COMPANY ISSUE OPEN ISSUE CLOSE OFFER PRICE ISSUE TYPE ISSUE SIZE (in crore ) PNC INFRATECH Ltd. May 8,2015 May 12,2015 355/- to 378/- IPO-BB 458.72- 488.44 UFO MOVIES Ltd. April 28,2015 April 30,2015 615/- to 625/- IPO-BB 600.00 INOX WIND Ltd. March 18,2015 March 20,2015 315/- to 325/- IPO-BB 700.00 VRL LOGISTICS Ltd. April 15,2015 April 17,2015 195/- to 205/- IPO-BB 473.88 ADLABS ENTERTAIN MENT Ltd. March 10,2015 March 12,2015 180/- to 215/- IPO-BB 341.48