ARYA SCHOOL OF MANAGEMENT AND INFORMATION TECHNOLOGY BHUBANESWAR

A PROJECT REPORT
ON

PRICING
often)

OF AN IPO(A calculated trick; is it justified

Submitted in partial fulfillment of the degree of

Master of Finance and Control

2010-12

By
JYOTIRMAYA MISHRA
ROLL NO-13767U104013

Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

Mr. SANDHYADARSHAN DASH Mr. BIPIN BIHARI DUTTA

FACULTY IN FINANCE Asst. Manager ASMIT Bhubaneswar Stock Exchange

UTKAL UNIVERSITY, VANIVIHAR BHUBANESWAR

ACKNOWLEDGEMENT
Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in completing the final project to the best of my ability. Being a part of this project has certainty been a unique and a very productive experience on my part. I sincerely feel that the credit of the organization study and project work could not be narrowed down to only one individual. As the whole, work is the outcome of whole hearted cooperation from many persons with whose guidance and support. I was able to bring out this project report. I am really thankful to Mr. BIPIN BIHARI DUTTA. (Asst. MANAGER), BHUBANESWAR STOCK EXCHANGE(BhSE)for making all kinds of arrangements to carry the project successfully and for priding and helping me to solve all kind of quarries regarding the project work. His systematic way of working and incomparable guidance has inspired the pace of project to a great extent. I must acknowledge my deep sense of gratitude to Mr. SANDHYADARSHAN DASH (Faculty of Finance) my internal guide of my college for his kind and invaluable suggestions regarding the project work Last but not on the least I would like to thank all the employees of BhSE, who have directly or indirectly helped me with their moral support for the completion of my project. Most of all I owe everything to almighty, my parents & my friends for their skills and creativity which made my project more appealing & attractive. Jyotirmaya Mishra
ROLL NO: 13767U104013 ASMIT

DECLARATION
I do here by declare that this FINAL PROJECT REPORT entitled as PRICING OF AN IPO(A calculated trick;is it justified often) at BhSE is done on true finding and my own efforts. I submit this report for the partial fulfillment in the award of degree of Master of Finance Control ( 2010- 2012) from the Arya School Of Management & information technology (ASMIT), Bhubaneswar under the Utkal University, Orissa.. Further, I declare that the final project for the award of Master of Finance and Control, Degree with above mentioned title has not been previously done by any person in the college to the best of my knowledge.

Jyotirmaya Mishra ROLL NO:

13767U104013
ASMIT

CONTENTS
CHAPTER-1
INTRODUCTION

1.Executive summary

2.OBJECTIVES OF THE STUDY 3.scope of the study 4.LIMITATIONS OF THE STUDY

CHAPTER-2
ORGANISATION PROFILE

CHAPTER-3
CONCEPTUAL PROFILE 1. INTRODUCTION 2. DIFFERENT KINDS OF ISSUE 3. WHAT IS AN IPO 4. ROLE OF INTERMEDIARIES 5. ANALYSIS OF AN IPO INVESTMENT 6. IPO INVESTMENT STRATEGIES 7. PRICING OF AN IPO 8. UNDERPRICING & OVERPRICING OF IPOs 9. PRINCIPAL STEPS IN IPO 10. BOOK BUILDING IS THE PROCESS OF PRICE DISCOVERY 11. BOOK BUILDING PROCESS 12. DOCUMENTS REQUIRED

CHAPTER-4
DATA ANALYSIS & INTERPRETATATION 1.ANALYSIS OF IPO OF 12 COMPANIES FOR LAST 3 YEARS

CHAPTER-5
1.CONCLUSION 2.RECOMMENDATION

CHAPTER-6Bibliography, website

Chapter-1(introduction)
1.EXECUTIVE SUMMARY
As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the current industry, mainly because of India being a developing country and lot of growth in various sectors which leads a country to ultimate success. And when we talk about countrys growth which is dependent on the kind of work and how much importance to which sector is given. And when we say or talk about industries growth which leads the economy of country has to be balanced and given proper finance so as to reach the levels to fulfill the needs of the society. And industries which have massive outflow of work and a big portfolio then its very difficult for any company to work with limited finance and this is where IPO plays an important role. This report talks about how IPO helps in raising fund for the companies going public, what are its pros and cons, and also it gives us detailed idea why companies go public. How and what are the steps taken by the companies before going for any IPO and also the role of (SEBI) Securities and Exchange Board of India the BSE and NSE , what are primary and secondary markets and also the important terms related to IPO. It gives us idea of how IPO is driven in the market and what are various factors taken into consideration before going for an IPO. And it also tells us how we can more or less judge a good IPO. Then we all know that scams have always been a part of any sector you go in for which are covered in it and also few recommendations are given for the same. It also gives us some idea about what are the expenses that a company undertakes during an IPO. IPO has been one of the most important generators of funds for the small companies making them big and given a new vision in past and it is still continuing its work and also for many coming years.

2.OBJECTIVE OF THE STUDY

The purpose of this study is to have a thorough knowledge of IPO. So we are also learning the types of organisation and their functions. The reasoning such as why and what helps us to clear the doubts about IPO. The knowledge of markets helps us to know where the IPO is possible. The various institutions involved are known so that organisations going for IPO are able to have easier access to these institutions. The advantages and disadvantages of going for IPO are analysed. Knowledge about successful and failure IPO are studied. To have a overall understanding of the stock market in India

3.SCOPE OF THE STUDY

The scope lies in determine the future prospectus for the investor in making investmentdecision. The study provides a comprehensive overview of performance of script in the primarymarket. The study aims to find out the profitable issues among the total issues passes out during the period.

4.LIMITATIONS OF THE STUDY

The project report is prepared for the Post Graduate level course of the University. The study is carried out according to that level only.

The study is to be completed within a period of 8 weeks. So the scope of the study is determined in such a way that it will be completed successfully in such time limit.

The main limitation of the study is analysis of only 12 companies who have issued their IPOs.

Chapter-2(organisation profile)
BHUBANESWAR STOCK EXCHANGE LIMITED HISTORY Initial step was taken by the Department of Industry, Govt. of Orissa and Industrial Promotion & Investment Corporation of Orissa Ltd. (IPICOL) in the early eighties to set up a Stock Exchange in the State of Orissa. Subsequently, Bhubaneswar Stock Exchange was incorporated on 17th April,1989 as a Public Company, limited by guarantee with an object to facilitate, assist, regulate and control the business of dealing in stocks, shares and like securities in the State of Orissa. Ministry of Finance, Govt. of India granted recognition to the Stock Exchange on 5th June,1989 under the provisions of the Securities Contracts (Regulation)

Act,1956 for an initial period of five years. Thereafter, the recognition of the Stock Exchange is being renewed from time to time by Securities and Exchange Board of India (SEBI). On being recognized during 1989, Bhubaneswar Stock Exchange admitted 161 memberbrokers in the first phase and commenced its trading operation on 2nd January, 1991. To impart greater liquidity in both shares and debentures and to increase the volume of business, the Exchange has expanded its membership strength during the year 1995 by admitting 75 more memberbrokers. However, the status of the Stock Exchange was converted from a Company limited by guarantee, to a Company limited by shares during the year 2005 pursuant to The Bhubaneswar Stock Exchange (Corporatisation and Demutualisation) Scheme, 2005 approved by SEBI. MANAGEMENT The affairs of the Stock Exchange are managed by the Board of Directors. The Board of Directors of the Stock Exchange comprises of 8 (Eight) Directors of which 2 are Trading Member Directors, 2 are Public Interest Directors, 3 are Shareholder Directors and a Chief Executive Director. However, the Board of Directors of the Stock Exchange is under supersession by SEBI w.e.f. 3rd January,2003. Shri J.P. Verma, IPS (Retd.) was appointed by SEBI as Administrator of the Stock Exchange to discharge the powers and duties of the Board of Directors. He continued to act as the Administrator of the Stock Exchange upto 30th September,2006. Thereafter, SEBI, while extending the period of supersession of Board of Directors of the Exchange, has designated Shri Vivekananda Pattanayak, IAS (Retd.) as the Administrator of Bhubaneswar Stock Exchange to discharge the powers and duties of its Board of Directors with effect from 1st October, 2006. Accordingly, Shri Pattanayak, IAS (Retd.) has taken over as the Administrator of Bhubaneswar Stock Exchange w.e.f. 3rd October,2006 to discharge the powers and duties of the Board of Directors of the Stock Exchange. The Stock Exchange, while recording the valuable service rendered by Shri J.P. Verma, IPS (Retd.) during his tenure as the Administrator, welcomes Shri Vivekananda Pattanayak, IAS (Retd.) as its Administrator. The Board of Directors/Administrator of the Stock Exchange is, at present, assisted by 11 qualified officials. AUTOMATION The entire trading and settlement operation was computerised since inception. However, the Exchange switched over to Screen Based Trading with effect from 20th May,1997 through which the member-brokers conducted trading on line thereby bringing to an end to the old tradition of open out-cry system of trading. OPERATIONAL INFRASTRUCTURE Upon automation of the trading activities, Trading Hall of the Stock Exchange has been modernised with the latest capital market infrastructures. SETTLEMENT SYSTEM The Settlement system of the Exchange is carried out on Daily Rolling Basis (T+1) as per the SEBI Guidelines issued from time to time. Pay-in/pay-out, in terms of Settlement Calender, are effected well in time through the Centralized Banking System of the Stock Exchange. Canara Bank has established a Branch to facilitate the pay-in/pay-out operation as well as the banking transactions of the Stock Exchange and its trading members. CLEARING HOUSE Bhubaneswar Stock Exchange has its own Clearing House. The transactions entered among the trading members of the Exchange are settled by delivery and payment obligations through the Clearing House of the Stock Exchange in accordance with the prescribed settlement program under a Centralized Delivery and Payment System.

INTER-CONNECTIVITY Bhubaneswar Stock Exchange has played an instrumental role, among others, in mooting the idea of establishing of an Inter-connected Market System (ICMS). This effort was resulted in establishing Inter-connected Stock Exchange of India of Ltd. to provide a nationwide equity market through the trading members of participating Stock Exchanges. It has also facilitated the trading members of participating Stock Exchanges including Bhubaneswar Stock Exchange, to trade on the National Stock Exchange segment. LISTED STOCKS Despite introduction of SEBI Delisting Guidelines,2003, Bhubaneswar Stock Exchange continued to have listing of securities of several companies having aggregate paid-up capital of around Rs.2,200 crores. PRIMARY MARKET Bhubaneswar Stock Exchange has been playing an active role for the growth of primary market activities with the support of its trading members. The Stock Exchange ensures promotional steps for participation of investing public at a large scale, in the public offers of several companies. CUSTOMERS PROTECTION FUND Investors protection is the cornerstone of a vibrant market. Bhubaneswar Stock Exchange has established a Statutory Fund namely, Bhubaneswar Stock Exchange Customers Protection Fund with an object to protect the customers from the risk of defaulting trading members. At present, as per the Rules of the said Fund, a customer is entitled to be indemnified to a maximum of Rs.25,000/- towards his claim against a defaulter trading member of the Stock Exchange. INVESTORS SERVICE CELL Bhubaneswar Stock Exchange has an Investors Service Cell which also ensures protection of the investors. It promptly attends the complaints of various nature lodged by the investors against companies as well as the trading members of the Stock Exchange and plays an important role in a friendly approach to redress the investors grievances The Investors Service Cell undertakes due care to build up confidence of the common investors on the capital market. LIBRARY Bhubaneswar Stock Exchange has a good library. It has a list of several books and guidelines relating to capital market. It also subscribes Periodicals and Financial News Dailies for readers. In addition to this, prime magazines for new issues, annual reports of several listed companies are available with it. The library of the Stock Exchange is, thus playing a promotional role for enrichment of knowledge of the staff, trading members, investors and research scholars at large. The Stock Exchange with the support of its library, also helps the management students to prepare their project reports. EMPLOYMENT Bhubaneswar Stock Exchange has also been instrumental in generating various nature of employment, both directly and indirectly, in the State of Orissa. As a result, apart from direct employment for its own purpose, it has created opportunity for generation of a number of indirect appointments in various capacities such as sub-brokers, authorised assistants, authorised representatives and other staff in the stock-broking firms. FUTURE UNDERTAKINGS Bhubaneswar Stock Exchange has undertaken a number of measures to activate business in securities and to spread the message of goodwill among the investing public. Such measures are to provide Depository Service so that the trading in securities and supporting depository operation connected to it shall be carried out under an umbrella.

to upgrade the infrastructural facilities to facilitate expansion of trading activities. to host Training Program for trading member as well as employees of the Stock Exchange. to introduce, provide and conduct a Course for imparting education on Indian Stock Market to the aspirants. to construct a modern hi-tech building of the Stock Exchange.

Chapter-3(conceptual profile)
1.INTRODUCTION
IPO Stands For Initial Public Offering And Means The New Offer Of Shares From A Company Which Was Previously Unlisted. This Is Done By Offering Those Shares To The Public, Which Were Held By The Promoters Or The Private Investors Prior To The Ipo. In The Case When Other Investors Or Promoter Held The Shares The Stake Holding Comes Down To The Extent Their Shares Are Offered To The Public. In Other Cases New Shares Are Issued To The Public And The Shares, Which Are With The Promoters Stay With Them. In Both Cases The Share Of The Promoters In The Total Capital Comes Down. For Example Say There Are 100 Shares In A Company And 50 Of These Are Offered To The Public In An Ipo Then In Such A Case The Promoters Stake In The Company Comes Down From 100% To 50%. In Another Case The Company Issues 50 Additional Shares To The Public And The Stake Of The Promoter Comes Down From 100% To 67%. Normally In An Ipo The Shares Are Issued At A Discount To What Is Considered Their Intrinsic Value And Thats Why Investors Keenly Await Ipos And Make Money On Most Of Them. Ipo Are Generally Priced At A Discount, Which Means That If The Intrinsic Value Of A Share Is Perceived To Be Rs.100 The Shares Will Be Offered At A Price, Which Is Lesser Than Rs.100 Say Rs.80 During The Ipo. When The Stock Actually Lists In The Market It Will List Closer To Rs.100. The Difference Between The Two Prices Is Known As Listing Gains, Which An Investor Makes When Investing In Ipo And Making Money At The Listing Of The Ipo. A Bullish Market Gives Ipo Investors A Clear Opportunity To Achieve Long Term Targets In A Short Term Phase.

Companies fall into two broad categories: Private and Public

A Privately Held Company Has Fewer Shareholders And Its Owners Don't Have To Disclose Much Information About The Company. When A Privately Held Corporation Needs Additional Capital, It Can Borrow Cash Or Sell Stock To Raise Needed Funds. Often "Going Public" Is The Best Choice For A Growing Business. Compared To The Costs Of Borrowing Large Sums Of Money For Ten Years Or More, The Costs Of An Initial Public Offering Are Small. The Capital Raised Never Has To Be Repaid. When A Company Sells Its Stock Publicly, There Is Also The Possibility For Appreciation Of The Share Price Due To Market Factors Not Directly Related To The Company. Anybody Can Go Out And Incorporate A Company: Just Put In Some Money, File The Right Legal Documents And

Follow The Reporting Rules Of Jurisdiction Such As Indian Companies Act 1956. It Usually Isn't Possible To Buy Shares In A Private Company. One Can Approach The Owners About Investing, But They're Not Obligated To Sell You Anything. Public Companies, On The Other Hand, Have Sold At Least A Portion Of Themselves To The Public And Trade On A Stock Exchange. This Is Why Doing An Ipo Is Also Referred To As "Going Public."

Why Go Public?
Before Deciding Whether One Should Complete An Ipo, It Is Important To Consider The Positive And Negative Effects That Going Public May Have On Their Mind. Typically, Companies Go Public To Raise And To Provide Liquidity For Their Shareholders. But There Can Be Other Benefits. Going Public Raises Cash And Usually A Lot Of It. Being Publicly Traded Also Opens Many Financial Doors: Because Of The Increased Scrutiny, Public Companies Can Usually Get Better Rates When They Issue Debt. As Long As There Is Market Demand, A Public Company Can Always Issue More Stock. Thus, Mergers And Acquisitions Are Easier To Do Because Stock Can Be Issued As Part Of The Deal. Trading In The Open Markets Means Liquidity. This Makes It Possible To Implement Things Like Employee Stock Ownership Plans, Which Help To Attract Top Talent. Going Public Can Also Boost A Companys Reputation Which In Turn, Can Help The Company To Expand In The Marketplace.

2.DIFFERENT KINDS OF ISSUE

3.WHAT IS AN IPO ?
An Ipo Is The First Sale Of Stock By A Company To The Public. A Company Can Raise Money By Issuing Either Debt Or Equity. If The Company Has Never Issued Equity To The Public, It's Known As An Ipo. Companies Fall Into Two Broad Categories: Private And Public. A Privately Held Company Has Fewer Shareholders And Its Owners Don't Have To Disclose Much Information About The Company. Anybody Can Go Out And Incorporate A Company: Just Put In Some Money, File The Right Legal Documents And Follow The Reporting Rules Of Your Jurisdiction. Most Small Businesses Are Privately Held. But Large Companies Can Be Private Too. Did You Know That Ikea, Domino's Pizza And Hallmark Cards Are All Privately Held? It Usually Isn't Possible To Buy Shares In A Private Company. You Can Approach The Owners About Investing, But They're Not Obligated To Sell You Anything. Public Companies, On The Other Hand, Have Sold At Least A Portion Of Themselves To The Public And Trade On A Stock Exchange. This Is Why Doing An Ipo Is Also Referred To As "Going Public." Public Companies Have Thousands Of Shareholders And Are Subject To Strict Rules And Regulations. They Must Have A Board Of Directors And They Must Report Financial Information Every Quarter. In The United States, Public Companies Report To The Securities And Exchange Commission (Sec). In Other Countries, Public Companies Are Overseen By Governing Bodies Similar To The Sec. From An Investor's Standpoint, The Most Exciting Thing About A Public Company Is That The Stock Is Traded In The Open Market, Like Any Other Commodity. If You

Have The Cash, You Can Invest. The Ceo Could Hate Your Guts, But There's Nothing He Or She Could Do To Stop You From Buying Stock. The First Sale Of Stock By A Private Company To The Public, Ipos Are Often Issued By Smaller, Younger Companies Seeking Capital To Expand, But Can Also Be Done By Large Privately-Owned Companies Looking To Become Publicly Traded. In An Ipo, The Issuer Obtains The Assistance Of An Underwriting Firm, Which Helps It Determine What Type Of Security To Issue (Common Or Preferred), Best Offering Price And Time To Bring It To Market. Ipos Can Be A Risky Investment. For The Individual Investor, It Is Tough To Predict What The Stock 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 Ipos Are Of Companies Going Through A Transitory Growth Period, And They Are Therefore Subject To Additional Uncertainty Regarding Their Future Value. Primary And Secondary Markets In The Primary Market Securities Are Issued To The Public And The Proceeds Go To The Issuing Company. Secondary Market Is Term Used For Stock Exchanges, Where Stocks Are Bought And Sold After They Are Issued To The Public. Primary Market The First Time That A Companys Shares Are Issued To The Public, It Is By A Process Called The Initial Public Offering (Ipo). In An Ipo The Company Offloads A Certain Percentage Of Its Total Shares To The Public At A Certain Price. Most Ipos These Days Do Not Have A Fixed Offer Price. Instead They Follow A Method Called Book Buildin Process, Where The Offer Price Is Placed In A Band Or A Range With The Highest And The Lowest Value (Refer To The Newspaper Clipping On The Page). The Public Can Bid For The Shares At Any Price In The Band Specified. Once The Bids Come In, The Company Evaluates All The Bids And Decides On An Offer Price In That Range. After The Offer Price Is Fixed, The Company Allots Its Shares To The People Who Had Applied For Its Shares Or Returns Them Their Money. Secondry Market Once The Offer Price Is Fixed And The Shares Are Issued To The People, Stock Exchanges Facilitate The Trading Of Shares For The General Public. Once A Stock Is Listed On An Exchange, People Can Start Trading In Its Shares. In A Stock Exchange The Existing Shareholders Sell Their Shares To Anyone Who Is Willing To Buy Them At A Price Agreeable To Both Parties. Individuals Cannot Buy Or Sell Shares In A Stock Exchange Directly; They Have To Execute Their Transaction Through Authorized Members Of The Stock Exchange Who Are Also Called Stock Brokers.

4.ROLE OF INTERMEDIARIES
Who Are The Intermediaries In An Issue? Merchant Bankers To The Issue Or Book Running Lead Managers (Brlm), Syndicate Members, Registrars To The Issue, Bankers To The Issue, Auditors Of The Company, Underwriters To The Issue, Solicitors, Etc. Are The Intermediaries To An Issue. The Issuer Discloses The Addresses, Telephone/Fax Numbers And Email Addresses Of These

Intermediaries. In Addition To This, The Issuer Also Discloses The Details Of The Compliance Officer Appointed By The Company For The Purpose Of The Issue. Who Is Eligible To Be A Brlm? A Merchant Banker Possessing A Valid Sebi Registration In Accordance With The Sebi (Merchant Bankers) Regulations, 1992 Is Eligible To Act As A Book Running Lead Manager To An Issue. What Is The Role Of A Lead Manager? (Pre And Post Issue) In The Pre-Issue Process, The Lead Manager (Lm) Takes Up The Due Diligence Of Companys Operations/ Management/ Business Plans/ Legal Etc. Other Activities Of The Lm Include Drafting And Design Of Offer Documents, Prospectus, Statutory Advertisements And Memorandum Containing Salient Features Of The Prospectus. The Brlms Shall Ensure Compliance With Stipulated Requirements And Completion Of Prescribed Formalities With The Stock Exchanges, Roc And Sebi Including Finalization Of Prospectus And Roc Filing. Appointment Of Other Intermediaries Viz., Registrar(S), Printers, Advertising Agency And Bankers To The Offer Is Also Included In The Pre-Issue Processes. The Lm Also Draws Up The Various Marketing Strategies For The Issue. The Post Issue Activities Including Management Of Escrow Accounts, Co-Ordinate Non-Institutional Allocation, Intimation Of Allocation And Dispatch Of Refunds To Bidders Etc Are Performed By The Lm. The Post Offer Activities For The Offer Will Involve Essential Followup Steps, Which Include The Finalization Of Trading And Dealing Of Instruments And Dispatch Of Certificates And Demat Of Delivery Of Shares, With The Various Agencies Connected With The Work Such As The Registrar(S) To The Offer And Bankers To The Offer And The Bank Handling Refund Business. The Merchant Banker Shall Be Responsible For Ensuring That These Agencies Fulfill Their Functions And Enable It To Discharge This Responsibility Through Suitable Agreements With The Company. What Is The Role Of A Registrar? The Registrar Finalizes The List Of Eligible Allottees After Deleting The Invalid Applications And Ensures That The Corporate Action For Crediting Of Shares To The Demat Accounts Of The Applicants Is Done And The Dispatch Of Refund Orders To Those Applicable Are Sent. The Lead Manager Co-Ordinates With The Registrar To Ensure Follow Up So That That The Flow Of Applications From Collecting Bank Branches, Processing Of The Applications And Other Matters Till The Basis Of Allotment Is Finalized, Dispatch Security Certificates And Refund Orders Completed And Securities Listed. What Is The Role Of Bankers To The Issue? Bankers To The Issue, As The Name Suggests, Carries Out All The Activities Of Ensuring That The Funds Are Collected And Transferred To The Escrow Accounts. The Lead Merchant Banker Shall Ensure That Bankers To The Issue Are Appointed In All The Mandatory Collection Centers As Specified In Dip Guidelines. The Lm Also Ensures Follow-Up With Bankers To The Issue To Get Quick Estimates Of Collection And Advising The Issuer About Closure Of The Issue, Based On The Correct Figures. Question On Due Diligence The Lead Managers State That They Have Examined Various Documents Including Those Relating To Litigation Like Commercial Disputes, Patent Disputes, Disputes With Collaborators Etc. And Other Materials In Connection With The Finalization Of The Offer Document

Pertaining To The Said Issue; And On The Basis Of Such Examination And The Discussions With The Company, Its Directors And Other Officers, Other Agencies, Independent Verification Of The Statements Concerning The Objects Of The Issue, Projected Profitability, Price Justification, Etc., They State That They Have Ensured That They Are In Compliance With Sebi, The Government And Any Other Competent Authority In This Behalf.

5.ANALYSING AN IPO INVESTMENT

Potential Investors And Their Objectives: Initial Public Offering Is A Cheap Way Of Raising Capital, But All The Same It Is Not Considered As The Best Way Of Investing For The Investor. Before Investing, The Investor Must Do A Proper Analysis Of The Risks To Be Taken And The Returns Expected. He Must Be Clear About The Benefits He Hope To Derive From The Investment. The Investor Must Be Clear About The Objective He Has For Investing, Whether It Is Long-Term Capital Growth Or Short-Term Capital Gains. The Potential Investors And Their Objectives Could Be Categorized As: Income Investor: An Income Investor Is The One Who Is Looking For Steadily Rising Profits That Will Be Distributed To Shareholders Regularly. For This, He Needs To Examine The Company's Potential For Profits And Its Dividend Policy. Growth Investor: A Growth Investor Is The One Who Is Looking For Potential Steady Increase In Profits That Are Reinvested For Further Expansion. For This He Needs To Evaluate The Company's Growth Plan, Earnings And Potential For Retained Earnings. Speculator: A Speculator Looks For Short-Term Capital Gains. For This He Needs To Look For Potential Of An Early Market Breakthrough Or Discovery That Will Send The Price Up Quickly With Little Care About A Rapid Decline. Investor Research: It Is Imperative To Properly Analyze The Ipo The Investor Is Planning To Invest Into. He Needs To Do A Thorough Research At His End And Try To Figure Out If The Objective Of The Company Match His Own Personal Objectives Or Not. The Unpredictable Nature Of Ipos And Volatility Of The Stock Market Adds Greatly To The Risk Factor. So, It Is Advisable That The Investor Does His Homework, Before Investing. The Investor Should Know About The Following: Business Operations: What Are The Objectives Of The Business? What Are Its Management Policies? What Is The Scope For Growth? What Is The Turnover Of The Labour Force? Would The Company Have Long-Term Stability? Financial Operations : What Is The Companys Credit History?

 What Is The Companys Liquidity Position? Are There Any Defaults On Debts? Companys Expenditure In Comparison To Competitors. Companys Ability To Pay-Off Its Debts. What Are The Projected Earnings Of The Company Marketing Operations : Who Are The Potential Investors? What Is The Scope For Success Of The Ipo? What Is The Appeal Of The Ipo For The Other Investors? What Are The Products And Services Offered By The Company? Who Are The Strongest Competitors Of The Company?

6.IPO INVESTMENT STRATEGIES

Investing In Ipos Is Much Different Than Investing In Seasoned Stocks. This Is Because There Is Limited Information And Research On Ipos, Prior To The Offering. And Immediately Following The Offering, Research Opinions Emanating From The Underwriters Are Invariably Positive. There Are Some Of The Strategies That Can Be Considered Before Investing In The IPO: Understand The Working Of IPO: The First And Foremost Step Is To Understand The Working Of An Ipo And The Basics Of An Investment Process. Other Investment Options Could Also Be Considered Depending Upon The Objective Of The Investor. Gather Knowledge: It Would Be Beneficial To Gather As Much Knowledge As Possible About The Ipo Market, The Company Offering It, The Demand For It And Any Offer Being Planned By A Competitor. Investigate Before Investing : The Prospectus Of The Company Can Serve As A Good Option For Finding All The Details Of The Company. It Gives Out The Objectives And Principles Of The Management And Will Also Cover The Risks. Know Your Broker: This Is A Crucial Step As The Broker Would Be The One Who Would Majorly Handle Your Money. Ipo Allocations Are Controlled By Underwriters. The First Step To Getting Ipo Allocations Is Getting A Broker Who Underwrites A Lot Of Deals. Measure The Risk Involved: Ipo Investments Have A High Degree Of Risk Involved. It Is Therefore, Essential To Measure The Risks And Take The Decision Accordingly. Invest At Your Own Risk: Finally, After The Homework Is Done, And The Big Step Needs To Be Taken. All That Can Be Suggested Is To Invest At Your Own Risk. Do Not Take A Risk Greater Than Your Capacity.

7.PRICING OF AN IPO
The Pricing Of An Ipo Is A Very Critical Aspect And Has A Direct Impact On The Success Or Failure Of The Ipo Issue. There Are Many Factors That Need To Be Considered While Pricing An Ipo And An Attempt Should Be Made To Reach An Ipo Price That Is Low Enough To Generate Interest In The Market And At The Same Time, It Should Be High Enough To Raise Sufficient Capital For The Company. The Process For Determining An Optimal Price For The Ipo Involves The Underwriters Arranging

Share Purchase Commitments From Leading Institutional Investors. Process: Once The Final Prospectus Is Printed And Distributed To Investors, Company Management Meets With Their Investment Bank To Choose The Final Offering Price And Size. The Investment Bank Tries To Fix An Appropriate Price For The Ipo Depending Upon The Demand Expected And The Capital Requirements Of The Company. The Pricing Of An Ipo Is A Delicate Balancing Act As The Investment Firms Try To Strike A Balance Between The Company And The Investors. The Lead Underwriter Has The Responsibility To Ensure Smooth Trading Of The Companys Stock. The Underwriter Is Legally Allowed To Support The Price Of A Newly Issued Stock By Either Buying Them In The Market Or By Selling Them Short. IPO Pricing Differences: It Is Generally Noted, That There Is A Large Difference Between The Price At The Time Of Issue Of An Initial Public Offering (Ipo) And The Price When They Start Trading In The Secondary Market. These Pricing Disparities Occur Mostly When An Ipo Is Considered Hot, Or In Other Words, When It Appeals To A Large Number Of Investors. An Ipo Is Hot When The Demand For It Far Exceeds The Supply. This Imbalance Between Demand And Supply Causes A Dramatic Rise In The Price Of Each Share In The First Day Itself, During The Early Hours Of Trading.

8.UNDERPRICING IPOS

AND

OVERPRICING

OF

Underpricing: The Pricing Of An Ipo At Less Than Its Market Value Is Referred To As Underpricing. In Other Words, It Is The Difference Between The Offer Price And The Price Of The First Trade. Historically, Ipos Have Always Been Underpriced. Underpriced Ipo Helps To Generate Additional Interest In The Stock When It First Becomes Publicly Traded. This Might Result In Significant Gains For Investors Who Have Been Allocated Shares At The Offering Price. However, Underpricing Also Results In Loss Of Significant Amount Of Capital That Could Have Been Raised Had The Shares Been Offered At The Higher Price. Overpricing: The Pricing Of An Ipo At More Than Its Market Value Is Referred To As Overpricing. Even Overpricing Of Shares Is Not As Healthy Option. If The Stock Is Offered At A Higher Price Than What The Market Is Willing To Pay, Then It Is Likely To Become Difficult For The Underwriters To Fulfill Their Commitment To Sell Shares. Furthermore, Even If The Underwriters Are Successful In Selling All The Issued Shares And The Stock Falls In Value On The First Day Itself Of Trading, Then It Is Likely To Lose Its Marketability And Hence, Even More Of Its Value.

9.PRINCIPAL STEPS IN AN IPO

Approval Of Bod : Approval Of Bod Is Required For Raising Capital From The Public.

 Appointment Of Lead Managers : The Lead Manager Is The Merchant Banker Who Orchestrates The Issue In Consultation Of The Company. Appointment Of Other Intermediaries : - Co-Managers And Advisors - Underwriters - Bankers - Brokers And Principal Brokers - Registrars Filing The Prospectus With Sebi : The Prospectus Or The Offer Document Communicates Information About The Company And The Proposed Security Issue To The Investing Public. All The Companies Seeking To Make A Public Issue Have To File Their Offer Document With Sebi. If Sebi Or Public Does Not Communicate Its Observations Within 21 Days From The Filing Of The Offer Document, The Company Can Proceed With Its Public Issue. Filing Of The Prospectus With The Registrar Of The Companies : Once The Prospectus Have Been Approved By The Concerned Stock Exchanges And The Consent Obtained From The Bankers, Auditors, Registrar, Underwriters And Others, The Prospectus Signed By The Directors, Must Be Filed With The Registrar Of Companies, With The Required Documents As Per The Companies Act 1956. Printing And Dispatch Of Prospectus : After The Prospectus Is Filed With The Registrar Of Companies, The Company Should Print The Prospectus. The Quantity In Which Prospectus Is Printed Should Be Sufficient To Meet Requirements. They Should Be Send To The Stock Exchanges And Brokers So They Receive Them Atleast 21 Days Before The First Announcement Is Made In The News Papers. Filing Of Initial Listing Application : Within 10 Days Of Filing The Prospectus, The Initial Listing Application Must Be Made To The Concerned Stock Exchanges With The Listing Fees. Promotion Of The Issue : The Promotional Campaign Typically Commences With The Filing Of The Prospectus With The Registrar Of The Companies And Ends With The Release Of The Statutory Announcement Of The Issue. Statutory Announcement : The Issue Must Be Made After Seeking Approval Of The Stock Exchange. This Must Be Published Atleast 10 Days Before The Opening Of The Subscription List. Collections Of Applications : The Statutory Announcement Specifies When The Subscription Would Open, When It Would Close, And The Banks Where The Applications Can Be Made. During The Period The Subscription Is Kept Open, The Bankers Will Collect The Applications On Behalf Of The Company. Processing Of Applications : Scrutinizing Of The Applications Is Done. Establishing The Liability Of The Underwriters : If The Issue Is Undersubscribed, The Liability Of The Underwriters Has To Be Established. Allotment Of Shares : Proportionate System Of Allotment Is To Be Followed. Listing Of The Issue : The Detail Listing Application Should Be Submitted To The Concerned Stock Exchange Along With The Listing Agreement And The Listing Fee. The Allotment Formalities Should Be Completed Within 30 Days.

10.BOOK BUILDING IS THE PROCESS OF PRICE DISCOVERY (BASIC CONCEPT)

 The Company Does Not Come Out With A Fixed Price For Its Shares; Instead, It Indicates A Price Band That Mentions The Lowest (Referred To As The Floor) And The Highest (The Cap) Prices At Which A Share Can Be Sold. Bids Are Then Invited For The Shares. Each Investor States How Many Shares S/He Wants And What S/He Is Willing To Pay For Those Shares (Depending On The Price Band). The Actual Price Is Then Discovered Based On These Bids. As We Continue With The Series, We Will Explain The Process In Detail. According To The Book Building Process, Three Classes Of Investors Can Bid For The Shares: 1. Qualified Institutional Buyers: Mutual Funds And Foreign Institutional Investors. 2. Retail Investors: Anyone Who Bids For Shares Under Rs 50,000 Is A Retail Investor. 3. High Net Worth Individuals And Employees Of The Company. Allotment Is The Process Whereby Those Who Apply Are Given (Allotted) Shares. The Bids Are First Allotted To The Different Categories And The Over-Subscription (More Shares Applied For Than Shares Available) In Each Category Is Determined. Retail Investors And High Net Worth Individuals Get Allotments On A Proportional Basis. Example 1: Assuming You Are A Retail Investor And Have Applied For 200 Shares In The Issue, And The Issue Is Over-Subscribed Five Times In The Retail Category, You Qualify To Get 40 Shares (200 Shares/5). Sometimes, The Over-Subscription Is Huge Or The Issue Is Priced So High That You Can't Really Bid For Too Many Shares Before The Rs 50,000 Limit Is Reached. In Such Cases, Allotments Are Made On The Basis Of A Lottery. Example 2: Say, A Retail Investor Has Applied For Five Shares In An Issue, And The Retail Category Has Been Over-Subscribed 10 Times. The Investor Is Entitled To Half A Share. Since That Isn't Possible, It May Then Be Decided That Every 1 In 2 Retail Investors Will Get Allotment. The Investors Are Then Selected By Lottery And The Issue Allotted On A Proportional Basis. That Is Why There Is No Way You Can Be Sure Of Getting An Allotment.

11.BOOK BUILDING PROCESS

Book Building Is Basically A Capital Issuance Process Used In Initial Public Offer (Ipo) Which Aids Price And Demand Discovery. It Is A Process Used For Marketing A Public Offer Of Equity Shares Of A Company. It Is A Mechanism Where, During The Period For Which The Book For The Ipo Is Open, Bids Are Collected From Investors At Various Prices, Which Are Above Or Equal To The Floor Price. The Process Aims At Tapping Both Wholesale And Retail Investors. The Offer/Issue Price Is Then Determined After The Bid Closing Date Based On Certain Evaluation Criteria The Process:

The Process: The Issuer Who Is Planning An Ipo Nominates A Lead Merchant Banker As A 'Book Runner'. The Issuer Specifies The Number Of Securities To Be Issued And The Price Band For Orders. The Issuer Also Appoints Syndicate Members With Whom Orders Can Be Placed By The Investors. Investors Place Their Order With A Syndicate Member Who Inputs The Orders Into The 'Electronic Book'. This Process Is Called 'Bidding' And Is Similar To Open Auction. A Book Should Remain Open For A Minimum Of 5 Days. Bids Cannot Be Entered Less Than The Floor Price. Bids Can Be Revised By The Bidder Before The Issue Closes. On The Close Of The Book Building Period The 'Book Runner Evaluates The Bids On The Basis Of The Evaluation Criteria Which May Include Price Aggression Investor Quality Earliness Of Bids, Etc. The Book Runner The Company Concludes The Final Price At Which It Is Willing To Issue The Stock And Allocation Of Securities. Generally, The Numbers Of Shares Are Fixed; The Issue Size Gets Frozen Based On The Price Per Share Discovered Through The Book Building Process. Allocation Of Securities Is Made To The Successful Bidders. Book Building Is A Good Concept And Represents A Capital Market Which Is In The Process Of Maturing. Book-Building Is All About Letting The Company Know The Price At Which You Are Willing To Buy The Stock And Getting An Allotment At A Price That A Majority Of The Investors Are Willing To Pay. The Price Discovery Is Made Depending On The Demand For The Stock. The Price That You Can Suggest Is Subject To A Certain Minimum Price Level, Called The Floor Price. For Instance, The Floor Price Fixed For The Maruti's Initial Public Offering Was Rs 115, Which

Means That The Price You Are Willing To Pay Should Be At Or Above Rs 115. In Some Cases, As In Biocon, The Price Band (Minimum And Maximum Price) At Which You Can Apply Is Specified. A Price Band Of Rs 270 To Rs 315 Means That You Can Apply At A Floor Price Of Rs 270 And A Ceiling Of Rs 315. If You Are Not Still Very Comfortable Fixing A Price, Do Not Worry. You, As A Retail Investor, Have The Option Of Applying At The Cut-Off Price. That Is, You Can Just Agree To Pick Up The Shares At The Final Price Fixed. This Way, You Do Not Run The Risk Of Not Getting An Allotment Because You Have Bid At A Lower Price. If You Bid At The Cut-Off Price And The Price Is Revised Upwards, Then The Managers To The Offer May Reduce The Number Of Shares Allotted To Keep It Within The Payment Already Made. You Can Get The Application Forms From The Nearest Offices Of The Lead Managers To The Offer Or From The Corporate Or The Registered Office Of The Company. How Is The Price Fixed? All The Applications Received Till The Last Date Are Analysed And A Final Offer Price, Known As The Cut-Off Price Is Arrived At. The Final Price Is The Equilibrium Price Or The Highest Price At Which All The Shares On Offer Can Be Sold Smoothly. If Your Price Is Less Than The Final Price, You Will Not Get Allotment. If Your Price Is Higher Than The Final Price, The Amount In Excess Of The Final Price Is Refunded If You Get Allotment. If You Do Not Get Allotment, You Should Get Your Full Refund Of Your Money In 15 Days After The Final Allotment Is Made. If You Do Not Get Your Money Or 15 Per Cent Per Annum On The Money Due. How Are Shares Allocated? As Per Regulations, At Least 25 Per Cent Of The Shares On Offer Should Be Set Aside For Retail Investors. Fifty Per Cent Of The Offer Is For Qualified Institutional Investors. Qualified Institutional Bidders (Qib) Are Specified Under The Regulation And Allotment To This Class Is Made At The Discretion Of The Company Based On Certain Criteria. Qibs Can Be Mutual Funds, Foreign Institutional Investors, Banks Or Insurance Companies. If Any Of These Categories Is Under-Subscribed, Say, The Retail Portion Is Not Adequately Subscribed, Then That Portion Can Be Allocated Among The Other Two Categories At The Discretion Of The Management. For Instance, In An Offer For Two Lakh Shares, Around 50,000 Shares (Or Generally 25 Per Cent Of The Offer) Are Reserved For Retail Investors. But If The Bids From This Category Are Received Are Only For 40,000 Shares, Then 10,000 Shares Can Be Allocated Either To The Qibs Or Non-Institutional Investors. The Allotment Of Shares Is Made On A Pro-Rata Basis. Consider This Illustration: An Offer Is Made For Two Lakh Shares And Is Oversubscribed By Times Times, That Is, Bids Are Received For Six Lakh Shares. The Minimum Allotment Is 100 Shares. 1,500 Applicants Have Applied For 100 Shares Each; And 200 Applicants Have Bid For 500 Shares Each. The Shares Would Be Allotted In The Following Manner: Shares Are Segregated Into Various Categories Depending On The Number Of Shares Applied For. In The Above Illustration, All Investors Who Applied For 100 Shares Will Fall In Category A And Those For 500 Shares In Category B And So On. The Total Number Of Shares To Be Allotted In Category A Will Be 50,000 (100*1500*1/3). That Is, The Number Of Shares Applied For (100)* Number Of Applications Received (1500)* Oversubscription Ratio (1/3). Category B Will Be Allotted 33,300 Shares In A Similar Manner. Shares Allotted To Each Applicant In Category A Should Be 33 Shares (100*1/3). That Is, Shares Applied By Each Applicant In The Category Multiplied By The Oversubscription Ratio. As, The Minimum Allotment Lot Is 100 Shares, It Is Rounded Off To The Nearest Minimum Lot. Therefore, 500 Applicants Will Get 100 Shares Each In Category A Total Shares Allotted To The Category (50,000) Divided By The Minimum Lot Size (100). In Category B, Each Applicant Should Be Allotted 167 Shares (500/3). But It Is Rounded Off To 200 Shares Each. Therefore, 167 Applicants Out Of 200 (33300/200) Would Get An Allotment Of 200 Shares Each In Category B. The Final Allotment Is Made By Drawing A Lot From Each Category. If You Are Lucky You May Get Allotment In The Final Draw. The Shares Are Listed And Trading Commences Within Seven Working Days Of Finalisation Of The Basis Of Allotment. You Can Check The Daily Status Of The Bids Received, The Price Bid For

And The Response Form Various Categories In The Web Sites Of Stock Exchanges. This Will Give You An Idea Of The Demand For The Stock And A Chance To Change Your Mind. After Seeing The Response, If You Feel You Have Bid At A Higher Or A Lower Price, You Can Always Change The Bid Price And Submit A Revision Form. The Traditional Method Of Doing Ipos Is The Fixed Price Offering. Here, The Issuer And The Merchant Banker Agree On An "Issue Price" - E.G. Rs.100. Then One Have The Choice Of Filling In An Application Form At This Price And Subscribing To The Issue. Extensive Research Has Revealed That The Fixed Price Offering Is A Poor Way Of Doing Ipos. Fixed Price Offerings, All Over The World, Suffer From `Ipo Underpricing'. In India, On Average, The Fixed-Price Seems To Be Around 50% Below The Price At First Listing; I.E. The Issuer Obtains 50% Lower Issue Proceeds As Compared To What Might Have Been The Case. This Average Masks A Steady Stream Of Dubious Ipos Who Get An Issue Price Which Is Much Higher Than The Price At First Listing. Hence Fixed Price Offerings Are Weak In Two Directions: Dubious Issues Get Overpriced And Good Issues Get Underpriced, With A Prevalence Of Underpricing On Average. What Is Needed Is A Way To Engage In Serious Price Discovery In Setting The Price At The Ipo. No Issuer Knows The True Price Of His Shares; No Merchant Banker Knows The True Price Of The Shares; It Is Only The Market That Knows This Price. In That Case, Can We Just Ask The Market To Pick The Price At The Ipo? Imagine A Process Where An Issuer Only Releases A Prospectus, Announces The Number Of Shares That Are Up For Sale, With No Price Indicated. People From All Over India Would Bid To Buy Shares In Prices And Quantities That They Think Fit. This Would Yield A Price. Such A Procedure Should Innately Obtain An Issue Price Which Is Very Close To The Price At First Listing -- The Hallmark Of A Healthy Ipo Market. Recently, In India, There Had Been Issue From Hughes Software Solutions Which Was A Milestone In Our Growth From Fixed Price Offerings To True Price Discovery Ipos. While The Hss Issue Has Many Positive And Fascinating Features, The Design Adopted Was Still Riddled With Flaws, And We Can Do Much Better.

12.DOCUMENTS REQUIRED:
A Company Coming Out With A Public Issue Has To Come Out With An Offer Document/ Prospectus. An Offer Document Is The Document That Contains All The Information You Need About The Company. It Will Tell You Why The Company Is Coming Is Out With A Public Issue, Its Financials And How The Issue Will Be Priced. The Draft Offer Document Is The Offer Document In The Draft Stage. Any Company Making A Public Issue Is Required To File The Draft Offer Document With The Securities And Exchange Board Of India, The Market Regulator. If Sebi Demands Any Changes, They Have To Be Made. Once The Changes Are Made, It Is Filed With The Registrar Of Companies Or The Stock Exchange. It Must Be Filed With Sebi At Least 21 Days Before The Company Files It With The Roc/ Stock Exchange. During This Period, You Can Check It Out On The Sebi Web Site. Red Herring Prospectus Is Just Like The Above, Except That It Will Have All The Information As A Draft Offer Document; It Will, However, Not Have The Details Of The Price Or The Number Of Shares Being Offered Or The Amount Of Issue. That Is Because The Red Herring Prospectus Is Used In Book Building Issues Only, Where The Details Of The Final Price Are Known Only After Bidding Is Concluded. Players:

 Co-Managers And Advisors Underwriters Lead Managers Bankers Brokers And Principal Brokers Registrars Stock Exchanges.

Chapter-4(data interpretation)

analysis

ANALYSIS OF THE IPO OF 12 COMPANIES OF LAST 3 YEARS

OVERVALUED IPOS
1. Oil India : (September 2009)
About the Company The Company was incorporated on February 18, 1959 under the Companies Act, 1956 ("Companies Act") as a private limited company. The name of the Company was changed from Oil India Private Limited to Oil India Limited with effect from May 4, 1961. About the Issue (September 2009) Public issue of 26,449,982 equity shares of Rs. 10 each ("equity shares") for cash at a price of Rs. 1,050 per equity share of oil india limited aggregating Rs. 27,772.48 million ("issue"). The issue comprises a net issue to the public of 24,045,438 equity shares ("net issue") and a reservation of 2,404,544 equity shares for subscription by eligible employees, at the issue price. The issue shall constitute 11% of the fully diluted post-issue capital of the company. Issue price:Rs. 1,050 per equity share The face value of equity shares: Rs. 10 and the issue price is 105 times the face value This Issue has been graded by CRISIL Limited and has been assigned a grade of 4/5 indicating good fundamentals.

Risk Factors 1Fluctuations in crude oil prices may adversely affect our revenues and profits and a substantial or extended decline in international prices for crude oil would have a material adverse effect on our business. 2Oil India has limited global presence in the field of oil exploration, development and production and may be unable to match the international oil majors in the quantity and rate of reserve accretion and discovery of commercially viable hydrocarbon reserves. 3Hydrocarbons exploration is capital-intensive and involves numerous risks, including the risk that, after substantial expenditures, they will encounter oil or natural gas reservoirs that may not be commercially viable for production. 4The company do not have any registered patents or trademarks, and failure to protect their intellectual property rights may adversely affect their business. 5Some of the countries in which Oil India operate, such as Iran and Sudan, are subject to certain international sanctions.

Shareholding Pattern of Oil India Ltd.:

Name Shareholder

1 President India 2 Public(Including Employees) 3 IOCL 4 HPCL 5 BPCL Total

of Pre Issue but prior to transfer Number of Percentag Equity e of Shares Holding (%) Of 210,000,000 98.13 4,004,400 214,004,40 0 1.87 100

Post transfer the Issue Number of Equity Shares 188,599,56 0 4,004,400 10,700,220 5,350,110 5,350,110 214,004,40 0

but Prior to Percentag e of Holding (%) 88.13 1.87 5.00 2.50 2.50 100

Post Transfer Post Issue Number of Percentage Equity of Holding Shares (%) 188,599,56 0 30,454,382 10,700,220 5,350,110 5,350,110 240,454,38 2 78.43 12.66 4.45 2.23 2.23 100

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share 2140.04 98567.07 100707.11 22308.50 91.84 11.43 1050 418.88

Post Issue(Rs million) 2404.5 155259.0 157663.5 28877.3 148.25 8.34 160%, 195% 1244 1101/1424 655.99

Technical :

Analysis: If we look at the Fundamentals of the company it looks pretty strong which is also evident from the fact that CRISIL has also graded Oil India Ltd as 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 1.56 times which shows the company is flourishing and profit is increasing year on year. If we look at the P/E ratio it is at par with the Industry average of 12.6 at the time of the issue but post issue it decreased because of the increase in EPS. Company has also paid good dividend (160% in 2010 & 195% in 2011).

If we see the technical chart of Oil India Ltd we can make out that the stock has been traded at the price above the issue price since its launch and its been hovering on an average just above the issue price which is evident from its 52 weeks low/high price. Thus we can say that since its been traded above the issue price that means its well accepted by the investors and is supported by them because of strong fundamentals and good future prospects.

2.

Godrej Properties:

(Jan 2010)
Sector- Real state

About the Company: Our Company was originally incorporated as Sea Breeze Constructions and Investments Private Limited on February 8, 1985 by Mr. Mohan Khubchand Thakur and Mrs. Desiree Mohan Thakur. In the year 1987, we became a part of the Godrej group and in the year 1989 we became a subsidiary of Godrej Industries Limited (erstwhile Godrej Soaps Limited). The name of our Company was changed to Godrej Properties and Investments Private Limited pursuant to a special resolution of the shareholders dated July 2, 1990. In the year 1991, the status of our Company was changed to a deemed public company by deletion of the word Private from the name of the Company. Subsequently the status was changed to a public limited company pursuant To a special resolution of the members passed at the extraordinary general meeting on August 1, 2001. Our name was further changed to Godrej Properties Limited pursuant to a special resolution of the members passed at the extraordinary general meeting on November 23, 2004. We are a real estate development company based in Mumbai, Maharashtra and have a presence in 10 cities in India. Currently, our business focuses on residential, commercial and township developments. We are a fully integrated real estate development company undertaking our projects through our in-house team of professionals and by partnering with companies with domestic and international operations. About the Issue : Public issue of 9,429,750 equity shares of Rs. 10 each of Godrej Properties Limited where 16,97,345 equity shares were issued for cash at a price of Rs. 530 per equity share (including a share premium of Rs.520 per equity share) and 77,32,405 equity shares were issued for cash at a price of Rs. 490 per equity share (including a share premium of Rs.480 per equity share) collectively aggregating to Rs. 468.85 crores (the issue). The issue will constitute 13.5% of the post issue Paid-up capital of the company. The face value of each equity share is Rs. 10. The floor price is Rs 490 and the cap price was Rs. 530. The issue price is 49 times the face value at the lower end of the price band and 53 times the face value at the higher end of the price band. The minimum bid lot is 13 equity shares. This Issue has been graded by ICRA Limited and has been assigned the IPO Grade 4, indicating above average fundamentals. Risk Factors :
1A majority of our Land Reserves is not registered in the name of the Company.

2Increase in prices of, shortages of, or delays or disruptions in the supply of building materials could harm our results of operations and financial condition. 3Restrictions on foreign direct investment in the real estate sector may hamper our ability to raise additional capital. 4The cyclical nature of the Indian real estate market could cause us to experience fluctuations in property values over time.

Shareholding Pattern of Oil India Ltd.:

Category of Pre Issue shareholder Total no. No of Of shares Shares Held in Demateria Lized form (A) Promoter and Promoter group Individual /HUF Bodies Corporate Total A Non Institutions Total (A+B) Public Total PostIssue Share Capital (A+B+C)

Post Issue Total Number of Shareholding Equity as a Shares % of total no of Shares Percenta Ge of Equity Share Capital (%)

86,51,250 4,98,76,364 5,85,27,614 18,92,645 6,04,20,259

0 17,29,354 17,29,354 70,950 18,00,304

14.32 82.55 96.87 3.13 100.00

8651250 4,98,76,364 5,85,27,614 18,92,645 6,04,20,259 9,429,750 69,850,009

12.38 71.40 83.78 2.712 86.50 13.5 100.00

(B) (C)

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 604.2 2853.6 3457.8 476.3 11.28 39.64 135.946* 490

Post Issue(Rs million) 698.5 8151.9 8850.4 1062.4 12.73 51.89 40%, 45% 633.9

52 week Lw/Hg Book Value per share Technical :

108.83

603/845 126.7

10th-Mar-2011 15:11 Source: BSE

Godrej Proper - Acquisition of Company Godrej Properties Ltd has informed BSE that pursuant to approval of the Members in the Annual General Meeting of the Company held on July 17, 2010, the Company has now acquired the entire paid up share capital of Udhay GK-Realty Pvt. Ltd from HDFC Ventures Trustee Company Ltd (in its Capacity as trustee of HDFC Property Fund organized as an irrevocable contributory trust under the Indian Trust Act, 1882, pursuant to an Indenture of trust dated November 6, 2004 investing through the scheme ''HDFC India Real Estate Fund).
New project in Gurgaon and Nagpur in sept Bengaluru oct The market may have cheered Jet Airways ' deal with Godrej Properties to jointly develop its (Jet's) land at Bandra Kurla Complex, but it could be a while before profits from the venture start rolling in.

Godrej Properties , the real estate development arm of Godrej Group, today launched its youtube Channel with an aim to offer viewers an easy access to videos of its upcoming and ongoing projects pan-India. Walkthroughs of projects including apartments will be posted to highlight various amenities and facilities that the project would provide thus giving viewers a chance to get an actual feel of the property

Analysis: If we look at the Fundamentals of the company it looks very strong which is also evident from the fact that the ICRA Limited has graded Godrej Properties with 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 2.56 times which shows the company is flourishing and profit is increasing year on year. If we look at the current P/E ratio it is much higher (about 4 times) than the Industry average of 13.97. Very high P/E may be attributed to the increase in price of the stock. Company has also paid fair dividend (40% in 2010 & 45% in 2011). If we see the technical chart of Godrej Prop. We can make out that the stock has always been traded at a price higher than its issue price since its launch which is also evident from the 52 weeks low/high price. Another thing to be noticed is that although the realty sector was on a downturn in 2011 but still Godrej Prop stock maintained its consistency in terms of pricing and trading which shows that although the investors have negative sentiment for the realty sector but has some hope with this stock. The investors are optimistic with the stock as there were certain positive news too about the company starting few new projects and acquisition too. One more thing to be noticed is that as the book value of the firm increased about 25% the market price of the stock also increased 25% thus reflecting that the overpricing of this stock is justified by the investors and the fundamentals of the company.

3.

Bajaj Corp:

(August 2010)

Sector: Personal care About the Company:

Bajaj Corp was originally incorporated as Bhaumik Agro Products Private Limited on April 25, 2006 under the Companies Act with the roc, Maharashtra. The name of the Company was changed to Bajaj Corp Private Limited pursuant to a special resolution of the shareholders of the Company dated July 18, 2007. Pursuant to a special resolution of the shareholders of the Company on September 14, 2007, the Company was converted into a public company, and the name of our Company was further changed to Bajaj Corp Limited. We commenced manufacturing and sale of our products in April 2008. Our products have been in existence since 1953 and were sold by different Bajaj group companies. BSL an erstwhile Bajaj group company manufactured and sold our products until December 2000. In January 2001, pursuant to a scheme of demerger, BSL transferred its operating business and assigned the trademarks for all the brands to its subsidiary Deccan Ayurvedashram Pharmacy Limited which subsequently changed its name to BCCL. Subsequently, pursuant to the execution of the Trademark License Agreement between BCCL And Bajaj Corp, BCCL assigned the trademarks for the products in favour of Bajaj Corp.

About the Issue :

Public issue of up to 4,500,000 equity shares of Rs. 5/- each of Bajaj Corp Limited For cash at a price of Rs. 660/- per equity share (including a share premium of Rs. 655/- per equity share) aggregating to Rs. 2,970 million. The issue will constitute 15.3 % of the post-issue paid-up equity capital of our company. The face value of the equity share is Rs. 5/- each and the issue price is 132 times the face value. This Issue has been graded by CRISIL Limited as IPO Grade 4/5, indicating that the fundamentals of the IPO of our Company are above average relative to other listed equity securities in India. Risk Factors : 1. Approximately Rs. 2,200 million, which is approximately 74% of our Issue size, will be utilized for promotion of future products and will not result in the creation of any tangible assets. 2. We have not yet identified targets for acquisition or brand building campaigns for using the proceeds from the Issue. 3. We depend heavily on Almond Drops and any factor adversely affecting this product or this brand will negatively impact our profitability. 4. Our major brands command a pricing premium in the market and our inability to maintain such a premium may adversely affect our profitability.

Shareholding Pattern of Oil India Ltd.:

Cate Gory Code

Category Shareholder

Pre Issue Total of Number of Equity Shares

As a Percent Age of (A+B+C)

Post Issue Total Number of Equity Shares

As a Percent Age of (A+B+C)

A B C

D E

Shareholding of Promoter and Promoter Group Promoter Bajaj Consumer Care 24,999,965 Limited Promoter Group 0 Total Shareholding of Promoter and 24,999,965 Promoter Group (C= A+B) Public 35 Shareholding PUBLIC IN THE ISSUE GRAND TOTAL 25,000,000 (C)+(D) + (E)

100.00 0 100.00

24,999,965 0 24,999,965

84.75

84.75

0 100.00

35 4,500,000 29,500,000 15.25 100.00

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share *Split 5:1 Technical : 125 154.12 256.10 839.13 23.05 28.6 35.25% 660 109.36

Post Issue(Rs million) 147.5 3615.9 3763.4 841.0 7.66* 15 190% 117.05 89.66/132.3 25.51*

Analysis: If we look at the fundamentals of the company it looks average which is also evident from the fact that CRISIL has graded Bajaj Corp as 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 146.95 times which shows that profit is increasing year on year. But if we look at the P/E ratio it is low if compared with the Industry average of 37.43 which may be because of low price than its peers. P/E post issue has decreased because of 1:5 Split of the stock. If we see the technical chart of Bajaj Corp. We can make out that the stock has been traded at a price lower than the issue price since its launch which is also evident from the prices of last 52 weeks. Thus we see that although the company is paying good dividend but still it could not gain the investors confidence may be because there is hardly any increase in PAT of the company. And therefore investors did not accepted the overvaluation of the IPO.

4.

Oberoi Realty:

(Oct 2010)
About the Company: The Company was incorporated in Mumbai as Kingston Properties Private Limited on May 8, 1998 under the Companies Act. Pursuant to a circular resolution passed by the Directors dated October 12, 2009, ratified by the Directors on December 4, 2009 and resolution passed by the shareholders of the Company at the EGM held on October 22, 2009, the name of the Company was changed to Oberoi

Realty Private Limited for availing the benefits of the brand equity of Oberoi and with a view to convey the right nature of activities of the Company. Consequent to the change in name, the Company received a fresh certificate of incorporation dated October 23, 2009 from the roc, Maharashtra. Thereafter, the Company was converted into a public limited company and pursuant to a Board resolution dated December 4, 2009 and shareholders resolution passed at the EGM dated December 4, 2009, the name of the Company was changed to Oberoi Realty Limited. Consequent to its change of name, the Company received a fresh certificate of incorporation dated December 14, 2009 from the roc. The Company is involved in real estate development and has a diverse portfolio of projects covering the residential, office space, retail, hospitality and social infrastructure segments of the real estate market. Currently, we have projects in Mumbai and Pune.

About the Issue : Public issue of 39,562,000 equity shares with a face value of Rs. 10 each (equity shares) of Oberoi Realty Limited for cash at a price of Rs. 260 per equity share (including a share premium of Rs. 250 per equity share) aggregating to Rs. 10,286.12 million. The issue will constitute 12.00% of the fully diluted post issue paid up equity share capital of the company. This Issue has been graded by CRISIL Limited as 4/5 indicating that the fundamentals of the Issue are above average. Risk Factors : 1Certain of our Group Companies have incurred losses or have had negative net worth in the three fiscal years ended March 31, 2010. 2The funds proposed to be utilised for general corporate purposes may constitute more than 25% of the proceeds of the Issue. 3The development rights in respect of our Planned project at Sangam City, Sangamwadi are subject to conditions, certain of which have not been or may not be satisfied; if these conditions are not satisfied, this land may not be available for development by us. 4We may not be able to fully develop our Planned project at Worli, Mumbai as presently contemplated. 5We have not obtained a written title opinion or search report in respect of our development sites in Juhu, Mumbai and Sangamwadi, Pune.

Shareholding Pattern of Oil India Ltd.:

Category of Shareholders Promoter (A) Promoter Group (B) Total Holding of Promoter and Promoter Group (C=A + B) Others (D) Public (pursuant To the Issue) (E) Total

Pre Issue 224,313,573 33,302,442 257,616,015 77.71 11.54 89.24

Post issue 224,313,573 33,302,442 257,616,015 68.04 10.10 78.14

31,055,247 288,671,262

10.76 100.00

32,498,603 39,562,000 329,676,618

9.86 12.00 100.00

Fundamentals: Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share 23.00 554.02 577.02 350.80 1.25 442.11 13.4% 260 58.39 Post Issue(Rs million) 3641.3 16969.7 20611.0 1705.7 7.36 38.09 10%, 20% 266 201.55/325 61.7

Technical :

Analysis: If we look at the fundamentals of the company it looks very strong which is also evident from the fact that CRISIL has graded Oberoi Realty as 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 35.7 times which shows that profit is increasing year on year. But if we look at the P/E ratio it is much lower than at the time of the issue which is because higher EPS but P/E is still high as compared to industry may be because of lower EPS as compared to Industry. If we see the technical chart the stock was trading at a price lower than the Issue price but in 2012 it was trading at a price near to the issue price. This upward lift in the stock price may be because of the uptrend of the market during the period and also if seen carefully the whole realty sector has an uptrend during this period. Thus we see that although the IPO was overvalued at the time of issue but still it was traded at a price near to issue price depicting the confidence of the investors on the stock. This is also evident if we look at the comparative chart of the realty sector and the Oberoi Realty where the sector has surged more than the Oberoi Realty during the period.

5.

Coal India :

(Nov 2010)
About the Company: In order to provide for a higher growth in coal sector to meet the growing energy needs of the country, the Government in 1973, nationalized the coal mines by enacting the Coal Nationalization Act. Pursuant to the nationalization of coal mines, the company was incorporated as a private limited company with the name of Coal Mines Authority Limited, under the Companies Act on June 14, 1973. Thereafter in 1975, Department of Coal, Ministry of Energy, goi, with a view to integrate and streamline the structural set up in a manner which could be conducive to a more efficient administration, issued letter, providing for the re-organisation of Coal Mines Authority Limited as Coal India Limited, which was to be responsible for the entire coal mining sector owned and controlled by the Central Government. In compliance with the direction from the Ministry of Energy, Department of Coal, and pursuant to a resolution of the shareholders dated October 15, 1975 and approval of the Ministry of Law, Justice and Company Affairs, the name of the Company was changed to Coal India Limited . About the Issue : Public offer of 631,636,440 equity shares of face value of Rs. 10 each of Coal India limited through an offer for sale by the President of India, acting through the Ministry of Coal, Government of India for cash at a price of Rs. 245 per equity share aggregating up to Rs. 154,750.93 million. The offer comprises a net offer to public of 568,472,796 equity shares (the net offer) and a reservation of 63,163,644 equity shares for subscription by eligible employees (the employee reservation portion). The offer shall constitute 10.00% of the post offer paid-up equity share capital of our company and the net offer shall constitute 9.00% of the post offer paid-up equity share capital of our company. This

Offer has been graded by CRISIL Limited, ICRA Limited and Credit Analysis & Research Limited, and has been assigned the CRISIL IPO Grade 5/5, IPO Grade 5/5 and CARE IPO Grade 5/5, respectively, indicating that the fundamentals of the Offer are strong relative to the other listed equity securities in India.

Risk Factors : 1If we are unable to acquire land and associated surface rights to access our coal reserves, we may be unable to mine coal from our reserves which could materially and adversely affect our business, results of operations and financial condition. 2Our coal mining operations have been adversely affected by illegal mining and pilferage of coal from our mines. 3The goi will continue to control us post listing of our Equity Shares. 4The interests of the goi as our controlling shareholder may conflict with your interests as a shareholder. 5We are subject to risks arising from exchange rate fluctuations. 6Any increase in transportation costs that we are unable to pass on to our customers could have an adverse effect on our business and results of operations.

Shareholding Pattern of Coal India Ltd.:

Shareholders Promoter (A) Others (B) Public shareholding (C) Total (A+B+C)

Pre Issue No. Of Equity Shares 6,316,363,800 600 6,316,364,400 6,316,364,400

Percentage of Shareholding 99.99 100.00 100.00

Post Issue No. Of Equity Shares 5,684,727,360 600 631,636,440 6,316,364,400

Percentage of Shareholding 89.99 10.00 100.00

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical : 63163.4 124362.28 187525.92 31692.95 5.43 42.1 30% 245 29.69

Post Issue(Rs million) 63163.6 131210.2 194373.8 47235.6 13.03 25.83 39% 327.5 293.6/422.35 30.77

Analysis:

If we look at the fundamentals of the company it looks to be very strong which is also evident from the fact that CRISIL, ICRA and CARE, all the three rating agencies has graded the company as 5 out of 5. From the above table it is clear fundamental parameters such as networth has increased when pre and post issue figures are compared.PAT is showing a growth of about 50% in just one year wich is a substantial growth rate. If we look at the P/E ratio it is

lower than at the time of the issue and it may be because of increase in EPS but P/E is still high as compared to industry average may be because of high price as compared to its peers. If we see the technical chart the stock was trading at a price which on an average was near to its issue price. Thus although being an overvalued stock it was able to gain the confidence of investors and has traded at a high price even though the market was showing a slight downturn. If we see the last 52 weeks low/high price then we observe that it has traded above the issue price and that the investors has well accepted thid overvalued stock as it has strong fundamentals, goi as promoters and the company is paying handsome dividends too.

6.

Muthoot Finance:

(May 2011)
About the Company: The Company was originally incorporated as a private limited company on March 14, 1997 under the provisions of the Companies Act, 1956, with the name The Muthoot Finance Private Limited. Subsequently, by a fresh certificate of incorporation dated May 16, 2007, the name was changed to Muthoot Finance Private Limited. Our Company was converted into a public limited company on November 18, 2008 with the name Muthoot Finance Limited and received a fresh certificate of incorporation consequent to change in status on December 02, 2008 from the Registrar of Companies, Kerala and Lakshadweep. About the Issue : Public issue of 51,500,000 equity shares of face value Rs10 each (the equity share) for cash at a price of Rs175 per equity share including a share premium of Rs165 per equity share, aggregating upto Rs9,012.50 million (the issue) by Muthoot Finance Limited. The issue will constitute 13.85% of the fully diluted post issue paid-up equity share capital of our company. This Issue has been graded by CRISIL Limited and ICRA Limited and has been assigned the IPO Grade 4/5 by both grading agencies, in their letters dated March 09, 2011 and March 07, 2011 respectively, indicating that the fundamentals of the Issue are above average relative to other listed equity shares in India. Risk Factors : 1Our customer base comprises mostly individual borrowers, who generally are more likely to be affected by declining economic conditions than large corporate borrowers. 2Because we handle high volume of cash and gold jewellery in a dispersed network of branches, we are exposed to operational risks, including employee negligence, fraud, petty theft, burglary and embezzlement, which could harm our results of operations and financial position.

Shareholding Pattern of Oil India Ltd.:

Category of

Pre Issue

Post Issue

Shareholder No. shares (A) Of % No. shares Of % Shareholding Of Promoter And Promoter Group Individuals/H 297,797,872 UF Public Shareholding Bodies Corporate 22,414,896 Total (A)+ 320,212,768 (B)

93.00

297,797,872

80.12

(B)

7.00 100.00

73,914,896 371,712,768

19.88 100.00

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical : 3202.13 8112.42 11314.55 2914.84 5.39 32.47 Nil 175 54.68

Post Issue(Rs million) 3717.1 24916.9 28633.0 4941.8 21.42 6.08 Nil 164 120.8/218.4 77.03

Analysis: If we look at the fundamentals of the company it looks above average which is also evident from the fact that both CRISIL and ICRA have graded Muthoot Finance as 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 2.53 times which shows that profit is increasing year on year. But if we look at the P/E ratio it is very low if compared with the Industry average of 17. 1 and it has also decreased than the P/E at the time of the Issue. Company has not paid any dividend in the last two years.

If we see the technical chart of Muthoot Finance we see that the stock has been traded at the price which was hovering near the issue price. Thus being a high priced IPO the stock was well accepted by the investors. In the end of the chart the sharp drop in the price is seen which may be because of the news that the loan of the company has increased by 16-20%. Other than that the price is flowing with the market sentiment which is seen in the comparison of the stock price with the Sensex .

UNDERVALUED IPOS
7. Aqua Logistics Ltd:

(Feb 2010)
About the Company: The Company was originally incorporated as Aqua Logistics Private Limited on September 20, 1999 under the Companies Act, 1956 vide Certificate of Incorporation issued by the Registrar of Companies, Mumbai. The Company was converted into a public limited company vide fresh Certificate of Incorporation dated March 05, 2009 and subsequently the name of the Company was changed to Aqua Logistics Limited. About the Issue : Public issue of 68,72,852 equity shares of Rs.10/- each for cash at a price of Rs. 220 per equity share (including a premium of Rs. 210 per equity share) for non institutional and QIB bidders and Rs. 215 per equity share (including a premium of Rs. 205 per equity share) for Retail Individual bidders aggregating upto Rs. 15,000 lacs (the issue), by aqua logistics limited.The Issue will constitute 33.53% of the fully diluted post issue paid-up capital of our company. The net issue to public will constitute 33.53% of the fully diluted post issue paid-up capital of our company.

The Issue has been graded by Brickwork Ratings India Private Limited and has been assigned a grade of 3/5 indicating average fundamentals.
Risk Factors : 1There has been a delay in the implementation schedule of the Project which is in the initial stages of implementation. Inability to complete the project as per the stated schedule of implementation may lead to cost/time overruns and may impact our future profitability. 2We have not yet placed orders for specialised equipments aggregating Rs. 3,051.89 Lacs required by us. Any delay in placing the orders/ or supply of equipments may result in time and cost overruns, and may affect our profitability.

3We are yet to apply for the Single Window clearance from Dubai Airport Free Zone Authority (DAFZA), for setting up our office in Dubai. Delay in receipt of the requisite regulatory approval or non-receipt of the same may impede our proposed expansion plans and would adversely affect our growth plans.

Shareholding Pattern of Oil India Ltd.: Category Promoters Promoter Group Employees Public Total Pre Isuue No. Of shares 75,23,300 14,16,667 1,77,000 45,08,303 1,36,25,270 % Holding 55.22 10.40 1.30 33.09 100.00 Post Issue No. Of shares 75,23,300 14,16,667 1,77,000 113,81,155 20498122 % Holding 36.70 6.91 0.86 55.52 100.00

Fundamentals: Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share *Split 10:1 Technical : 136.25 617.91 754.16 83.64 8.54 25.76 Nil 220/215 110.26 Post Issue(Rs million) 300 4936.1 5236.1 223.9 0.4* 33.62 Nil 13.7 7.95/30.45 17.45*

Analysis: If we look at the fundamentals of the company it looks average which is also evident from the fact that Brickworks Rating India Pvt. Ltd. Has graded the company with 3 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 2.52 times which shows that profit is increasing year on year.If we look at the P/E ratio it increased and is at par with the industry average of 36.09. Company has also not paid any dividend in the last two years. If we see the technical chart we can make out that the stock price has increased in 2010 but dropped in the beginning of 2011 and since then could not recover and is trading at a price below than the issue price which is also evident from its last 52 weeks low/high price.

Thus we can say that although at the time of the issue the IPO was overvalued but subsequently it is now been traded at a price near to the current book value. Aqua Logistics is a company with average fundamentals and overvalued IPO and neither it has paid any dividend and thus could not gain confidence of the investors and as a result its price kept on dropping in 2011. Even if we look at the share holding pattern the promoter holding has decreased showing the loss of confidence among the promoters too which may also be one of the reason of declining price.

8.

United Bank:

(Mar 2010)
About the Company: United Bank of India was constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 on July 19, 1969. The Head Office of the Bank was set up at 4 Clive Ghat Street. United Bank of India is one of the 14 banks which were nationalised on July 19, 1969. On October 12, 1950, the name of Bengal Central Bank Limited (established in 1918 as Bengal Central Loan Company Limited) was changed to United Bank of India Limited for the purpose of amalgamation and on December 18, 1950, Comilla Banking Corporation Limited (established in 1914), the Comilla Union Bank Limited (established in 1922), the Hooghly Bank (established 1932) stood amalgamated with the Bank. Subsequently, other banks namely, Cuttack Bank Limited, Tezpur Industrial Bank Limited, Hindusthan Mercantile Bank Limited and Narang Bank of India Limited Were merged with the Bank. About the Issue : Public issue of 5,00,00,000 equity shares of face value of Rs. 10 each of United Bank of India for Cash at a price of Rs. 66 per equity share (including a share premium of Rs. 56 per equity share) for non institutional and QIB bidders and Rs. 63 per equity share (including a share premium of Rs. 53 per equity share) for Retail Individual Bidders and eligible employees, aggregating to Rs. 324.98 crore. The issue comprises of net issue of 4,75,00,000 equity shares of face value of Rs. 10 each to the public (net issue) and a reservation of 25,00,000 equity shares for subscription by eligible employees. The issue would constitute 15.80% of the post issue paid-up capital of the bank and the net issue will constitute 15.01% of the post issue paid up capital of the bank. This Issue has been graded by CARE as CARE IPO grade 4 indicating above average fundamentals and by ICRA as ICRA IPO grade 3 indicating average fundamentals. Risk Factors : 1The Government will continue to hold a majority interest in the Bank following the Issue and will therefore be able to determine the outcome of shareholder voting and hence shareholders other than the Government may not be able to exercise effective control over the Bank. 2The Government of India has in the past and may in the future direct us to implement certain schemes that are aimed at serving the interest of farmers and/or a cross section of the public. Such schemes may not necessarily be aimed at maximizing our profits and may adversely affect our business, financial condition and results of operations. 3We have revalued certain premises belonging to us for the financial year ended March 31, 2007 which has resulted in increase in our Reserves and Surplus to the tune of Rs. 377.90 crore.

These reserves are not free reserves and we may not utilize these for distribution as dividends or bonus shares to our shareholders. 4We are required to make certain provisions as stipulated by RBI and increase in these requirements could materially and adversely affect our business, financial condition and results of operations. 581.79% of our total branches are concentrated in eastern and north eastern India and hence we are exposed to regional risks.

Shareholding Pattern of United Bank Ltd.:

Name of shareholders

the

Pre-issue equity capital Number of Equity Shares Percentage (%)

Post-issue equity capital Number of Equity Shares 26,64,30,800 25,00,000 4,75,00,000 Percentage (%)

Promoter Goi (A) Eligible Employees (B) Public (pursuant to the Issue) (C) Total (A) + (B) + (C)

26,64,30,800

100.00

84.20 0.79 15.01 100.00

26,64,30,800

100.00

31,64,30,800

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical : 5164.3 22534.4 27698.7 2311.0 1.78 37.08 1.5% 66 90.06

Post Issue(Rs million) 11444.2 38772.5 50216.7 5239.7 18.19 3.92 20%, 22%, 24% 70.65 45.6/113.9 103.46

Analysis: If we look at the fundamentals of the company it looks above average which is also evident from the fact that CARE has graded the company with 4 out of 5 but ICRA has graded it with 3 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 1.81 times which shows that profit is increasing year on year. If we look at the P/E ratio it decreased and even is less than the industry average of 8.05. Company has not paid a high dividend but is consistent in dividend paying. If we see the technical chart we can make out that the stock price has a decreasing trend although it tried to recover in the mid 2010 but dropped drastically at the end of 2010 and since then could not recover and is trading at a price below than the issue price which is also evident from its last 52 weeks low/high price. Thus we can say that although at the time of the issue the IPO was undervalued but subsequently it gained the price and went as high as double the issue price but in 2011-12 it has been trading at a price near to its issue price which was still less than the present book value.At the same time if we look at the hole bank sector represented by the NIFTY BANK above it is not showing as much volatility as the United Bank in 2010. Thus it could be said that initially people took the IPO very positively may be because it looks to be undervalued initially and people has great hope with the bank being a PSU.

9.

ARSS Infra:

(March 2010)

About the Company: The Company was incorporated as ARSS Stones Private Limited on May 17, 2000 under the Companies Act, 1956, with its registered office at N-1/93, IRC Village, Nayapalli, Bhubaneswar. On May 20, 2005, the name of the Company was changed to ARSS Infrastructure Projects Private Limited. The Company has been converted to a public limited company in pursuance of a special Resolution passed by the members of the Company at the Extraordinary General Meeting held on November 15, 2005. About the Issue : Public issue of 22,88,888 equity shares of Rs. 10/- each of ARSS Infrastructure Projects Limited for cash at a price of Rs. 450 per equity share (including a share premium of Rs. 440 per equity share) Aggregating upto Rs. 10300 lacs ("issue"). The issue will constitute 18.23 % of the pre issue and 15.42 % of the post issue fully diluted paid up equity capital of the company. The Issue has been

graded by Credit Analysis and Research Limited ("CARE") and has been assigned "IPO Grade 2" indicating below average fundamental.
Risk Factors : Our Company has defaulted on payment of interest and repayment of loan to various banks / financial institutions
1-

The power supply at one of our Units has been disconnected by the Central Electricity Supply Company of Orissa Limited (CESCO) due to default in payment of electricity bills and other related disputes and the complaint filed by our Company in respect thereto is pending before the concerned authority.
2-

Shareholding Pattern of Oil India Ltd.:

Shareholder Category Promoters Promoter Group Promoter and Promoter Group (A+B) Others (C) Public Issue (D) Total Share Capital Fundamentals:

Pre Issue No. Of shares 4,371,648 38,28,302 81,99,950 43,54,050 12,554,000

% 34.82 30.49 65.31 34.68 100.00

Post Issue No. Of shares 4,371,648 38,28,302 81,99,950 43,54,050 2,288,888 14,842,888

% 29.45 25.79 55.24 29.33 15.42 100.00

Pre issue( Rs million) Paid up capital 125.54

Post Issue(Rs million) 148.4

Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical :

1858.83 1984.14 500.85 29.99 10.54 Nil 450.00 207.03

4335.6 4484.0 1121.7 52.99 2.05 20%, 10% 117.05 99.45/637.5 302.1

Analysis: If we look at the fundamentals of the company it looks below average which is also evident from the fact that CARE has graded the company with 2 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 2.26 times which shows that profit is increasing year on year. If we look at the P/E ratio it decreased to a value which is much less than the industry average of 14.16. Company has also paid dividend for the last two years. If we see the technical chart we see that just after the issue in 2010 the stock price has increased to a price double to the issue price but at the end of the year the price started decreasing and kept on decreasing till date. Thus we can say that although at the time of the issue the IPO was overvalued but subsequently its price decreased and it is currently trading at a price lower than the current book value. Thus it could be said that initially people took the IPO very positively may be because it bagged too many contracts but then it could not sustain.

10. A2Z Maintenance : (Dec 2010)

Sector- Power transmission/ equipment About the Company: The Company was incorporated as A2Z Maintenance Services Private Limited on January 7, 2002 under the Companies Act. Pursuant to a resolution of the Board of Directors of the Company dated April 28, 2005 and a special resolution of the shareholders at an extraordinary general meeting held on May 2, 2005, the name of the Company was changed from A2Z Maintenance Services Private Limited to A2Z Maintenance & Engineering Services Private Limited to reflect the enhanced

scope of services offered by the Company. The fresh certificate of incorporation was issued by the roc on June 13, 2005. Subsequently, pursuant to a special resolution of the shareholders of the Company at an extraordinary general meeting held on March 12, 2010, the Company became a public limited company and the word private was deleted from its name. The fresh certificate of incorporation to reflect the new name was issued by the roc on March 26, 2010. About the Issue : Public issue of 19,407,750 equity shares of face value Rs. 10 each of A2Z maintenance & engineering services limited for cash at a price of Rs. 400 per equity share, aggregating Rs. 7,762.47 million, comprising a fresh issue of 16,876,569 equity shares of Rs. 10 each at the issue price, aggregating Rs. 6,750.00 million by the company and an offer for sale of 2,531,181 equity shares of Rs. 10 each at the issue price, aggregating Rs. 1,012.47 million, by the selling shareholders. Up to 100,000 equity shares of Rs. 10 each will be reserved in the issue for subscription by employees. A discount of 5% to the issue price shall be offered to the employees at the time of allotment (the employee discount). The issue less the employee reservation portion is hereinafter referred to as the net issue. The issue and the net issue will constitute approximately 26.16% and 26.03%, respectively, of the post-issue paid up equity share capital of the company. The Issue has been graded by Credit Analysis & Research Limited and assigned the CARE IPO Grade 4 indicating above average fundamentals, Risk Factors : 1We depend on two suppliers based in China for the technologically advanced boilers to be used in our power generation projects. If our suppliers default, or the technology fails or if there are changes in technology, our business could be adversely affected. 2We estimate placing orders for plant and machinery aggregating Rs. 2,274.76 million. Any delay or failure in the supply of equipment or change in our assumptions or market conditions may adversely affect our operations. 3We will not receive any proceeds from the Offer for Sale. Our Promoter is one of the Selling Shareholders and will receive part of the proceeds from the Offer for Sale. 4Any further issue of Equity Shares by the Company or sale of Equity Shares by any of its significant shareholders may adversely affect the trading price of the Equity Shares.
Shareholding Pattern of Oil India Ltd.:

Category Promoter Promoter Group (other than Promoter) Total Holding of Others (other Than Promoter and Promoter Group) Public in the Issue Total

Pre Issue Number of Equity Shares 27,578,735 4,401,894 25,320,496

Percentage equity share Capital (%) 48.13 7.68 44.19

Post Issue of Number of Equity Shares 26,884,301 4,346,339 23,539,304

Percentage equity share Capital (%) 36.24 5.86 31.73

of

57,301,125

100.00

19,407,750 74,177,694

26.16 100.00

Fundamentals: Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical : 573.01 3703.27 4276.28 2476.98 14.00 22.65 Nil 400.00 76.33 Post Issue(Rs million) 741.8 10645.1 11386.9 853.5 5.87 20.08 20% 113.05 84.10/292.95 153.51

Analysis: If we look at the fundamentals of the company it looks above average which is also evident from the fact that CARE has graded the company with 4 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 2.66 times which shows that profit is increasing year on year. If we look at the P/E ratio it decreased but still higher than the industry average of 11.39. Company has also paid 20% dividend in the last year. If we see the technical chart we see that the stock has always traded at a price lower than the issue price and now it has been traded at a price which is even lower than the current book value . Thus we can say that although at the time of the issue the IPO was overvalued but subsequently its price decreased and it is currently trading at a price lower than the current book value. Being a company with above average fundamentals its EPS does not increased much and it was not able to convince the investors and may be this is the reason why it could not recover its price and kept on dropping.

Neutral ipos
11. Jindal Cotex :

(Sep 2009)

Sector- Textile About the Company:

The Company was incorporated as Jindal Cotex Limited under the Companies Act, 1956 on February 18, 1998 in the state of Punjab. The Certificate of Commencement of Business was obtained on February 20, 1998. The current Promoters of our Company are Mr. Sandeep Jindal, Mr. Yash Paul Jindal, Mr. Rajinder Jindal and Mr. Ramesh Jindal. The Company has been promoted by Mr. Sandeep Jindal, Mr. Yash Paul Jindal, Mr. Rajinder Jindal and Mr. Ramesh Jindal along with other members of the Jindal family for setting up a Spinning unit for the manufacture of Synthetic Yarns. The Company initially set up 6912 spindles And started manufacturing acrylic yarns under the trade name JINDAL which came into Commercial production in May 1999. The Company thereafter, ventured into polyester yams & Further explored the markets of New Delhi, Bhilwara & Maharashtra. Starting from 6912 spindles In 1999 our Company has expanded its capacity to 23472 spindles.

About the Issue : Public issue of 1,24,53,894 equity shares of face value of Rs. 10/- each for cash at a price of Rs. 75 per equity share (including a premium of Rs. 65 per equity share) aggregating Rs. 9,340.42 lacs comprising of promoters contribution of 12,03,894 equity shares of Rs. 10 each at a price of Rs. 75 for cash aggregating Rs. 902.92 lacs (referred to as the promoters contribution) and reservation for eligible employees of our company of 5,00,000 equity shares Rs. 10 each at a price of Rs. 75 for cash aggregating Rs. 375.00 lacs. The net issue to the public is of 1,07,50,000 equity shares of Rs. 10 each at a price of Rs. 75 for cash aggregating Rs. 8,062.50 lacs. The net issue constitutes 43.00 % of the post issue paid up capital of our company. The Issue has been graded by Brickwork Ratings India Private Limited and has been assigned a grade of 3/5 indicating average fundamentals. Risk Factors :
12-

We have rolled over short term loan of Rs. 500 Lacs.

The prices we are able to obtain for the yarns that we produce depend largely on prevailing market prices. Any decrease in yarn prices may adversely affect our profitability. 3We have unsecured loans, which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect our business operations.
Shareholding Pattern of Oil India Ltd.: Pre Issue No. Of Shares Post Issue No. Of Shares

Category Promoters Promoters Group Employees

% Holding

% Holding

1,04,97,114 20,48,992
-

83.67% 16.33%
-

1,17,01,008 20,48,992 5,00,000

46.80% 8.20% 2.00%

Public Total

100.00

1,25,46,106

1,07,50,000 25,000,000

43.00%
100.00

Fundamentals: Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical :
125.46 166.28 350.03 18.41

Post Issue(Rs million) 450.0 2535.1 2985.1 104.5 2.32 28.90 Nil 67.05 40.05/121.50 66.33

3.91 19.18 Nil 75 49.00

Analysis: If we look at the fundamentals of the company it looks average which is also evident from the fact that Brickworks Rating India Private Limited has graded the company 3 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 8.52 times which shows that profit is increasing year on year. If we look at the P/E ratio it increased and is still much higher than the industry average of 9.79. Company has also not paid any dividend since the last two years. If we see the technical chart we see that the stock has always traded near to its issue price till mid 2010 but at the end of 2010 its price shooted up nearly double to the book value and now it has been traded at a price which is again equal to the current book value . Thus we can say that although at the time of the issue the IPO was a bit overvalued but it was able to gain the investors confidence. The price drop at the end of 2010 may be because the company did not declared any dividend that year. The reason why the price of the stock did not dropped too much ,may be that it was not highly overvalued , thus the price dropped to the current book value.

12. NHPC : (Sep 2009)

Sector- Power Generation/ Distribution About the Company: The Company was incorporated on November 7, 1975 under the Companies Act as a private Limited company under the name National Hydro Electric Power Corporation Private Limited. The word private was subsequently deleted on September 18, 1976. The Company was Converted to a public limited company w.e.f. April 2, 1986. Pursuant to a shareholders resolution Dated March 13, 2008, the name of our Company was changed to its present name NHPC Limited and a fresh certificate of incorporation consequent upon change of name was issued by

The roc, National Capital Territory of Delhi and Haryana, on March 28, 2008.

About the Issue : Public issue of 1,67,73,74,015 equity shares of Rs. 10 each for cash at a price of Rs. 36 per equity share of NHPC Limited aggregating Rs. 6038.55 crore. The issue comprises a fresh issue of 1,11,82,49,343 equity shares by NHPC and an offer for sale of 55,91,24,672 equity shares by the President of India acting through the ministry of power, Government of India. The issue Comprises a net issue to the public of 1,63,54,39,665 equity share and a reservation of 4,19,34,350 equity shares for subscription by eligible employees, at the issue price. The issue shall constitute 13.64% of the post-issue capital of NHPC. This Issue has been graded by ICRA Limited and has been assigned a grade of 3/5 indicating average fundamentals. Risk Factors : 1Pursuant to the determination of the Price Band in the Issue, more than 25% of the Net Proceeds of the Fresh Issue will be deployed towards general corporate purposes and our Company may not be able to make adequate disclosures with regard to such utilization. 2Our projects typically require a long gestation period and substantial capital outlay before we realise benefits or returns on investments. 3Our indebtedness and the conditions and restrictions imposed by our financing arrangements may adversely affect our ability to conduct our business and operations. 4We have no history of constructing or operating thermal power projects, so it is difficult to estimate the future performance of our new business ventures. 5We will continue to be controlled by the goi following this Issue, and our other shareholders will be unable to affect the outcome of shareholder voting.

Shareholding Pattern of Oil India Ltd.: Pre Issue No. Of Shares 11,18,24,93,430 Post Issue No. Of Shares 10,62,33,68,758

Name of Shareholder President of India, acting Through the mop (including Nominees) Public (including Eligible Employees) Total

% Holding 100.00

% Holding 86.36

11,18,24,93,430

100.00

1,67,73,74,015 12,30,07,42,773

13.64 100.00

Fundamentals:

Pre issue( Rs million) Paid up capital Reserves Networth PAT EPS P/E PEG EV/EBIDTA Dividend Market Price 52 week Lw/Hg Book Value per share Technical : 111824.9 66916.5 178718.1 11298.0 0.94 36.73 2.5% 36.00 17.80

Post Issue(Rs million) 123007.4 122831.5 245838.9 21666.7 2.12 9.43 5.50%, 6.00% 20.55 17.50/27.0 19.99

Analysis: If we look at the fundamentals of the company it looks average which is also evident from the fact that ICRA has graded the company 3 out of 5. From the above table it is clear that the fundamental parameters has increased when pre and post issue figures are compared.Net worth of the company has increased 1.37 times which shows that profit is increasing year on year. If we look at the P/E ratio it decreased may be because of increase in EPS and decrease in stock price and it is much lower than the industry average of 17.39. Company has also not paid good dividend in the last two years. If we see the technical chart we see that the stock has always traded at a price lower to its issue price and was never recovered back . If compared with the power sector, actually the whole power sector was on a downturn which is seen through the BSE Power Index. Thus we can say that although at the time of the issue the IPO was a bit overvalued but it could not convince the investors as it paid very low dividend being a large cap company. And currently it is been traded at a price near to its current book value.

Chapter-5
1.CONCLUSION
Whenever an IPO is priced, we know, it takes many factors into consideration such as Earning per Share, P/E ratio, Return on Net Worth, Book Value per share, etc. But does that mean an IPO is fairly priced. And whatever may be the price, will the price sustain at the same level. The answer is No, not always. It is not just these factors but various other factors, which we can say are latent factors, such as Brand of the company, Market sentiment, demand and supply and the worst of all the speculations, which sometimes does not have any reasons behind them. In the last two years about 120 IPOS have been issued out of which about 65 stocks are currently overvalued and about 45 stocks are currently undervalued and about 8 stocks are trading at a price equal to its intrinsic value. Among all the currently overvalued stocks, the general trend is that the stocks are now trading at a price higher than its issue price or it is just able to sustain near to its issue price. That means although being overvalued the companies were able to convince the investors of the long term gain may be by giving dividends or some kind of assurance perceived by the investors. It may also be possible that investors has accepted the high prices of the IPO just because they know that the companies has the support of a big brand name which has strong fundamentals. Just for an example Oil India which has still 79% of share holding with the President of India which gives an investor enough reason to invest in such a company where he knows that his investment would not go in vain. If we see DB Corp it has given continuous fair rate of dividends whether interim or final. If we see Godrej Prop. It has also paid good dividend. It has also been looked upon by the investors very optimistically as it has continuously announced the news of expansion of the business. But if we look at Jubilant foodworks, a company with average fundamentals and has not yet paid any dividend, although being an overvalued IPO its price kept on soaring high which may be a work of pure speculation. Companies like Bajaj Corp which has paid good dividend as high as 190% and Muthoot finance which has been graded as 4 out of 5 by both CRISIL and ICRA were able to give a reason to the investors to invest in the stock which lead to the increase demand of the stock and thus even being overvalued their price kept on increasing. And last but not the least company such as Coal India which has been graded 5 out of 5 by CRISIL, CARE and ICRA and paying good dividend too has given every reason to the stock to be traded at high prices than the issue price. And if we talk about companies like Adani Power and JSW Energy, they became the pray of negative market sentiment for the whole power sector and the stock price succumbed under them. If we see the stocks which are currently undervalued they do not have any reason for their price to be increased. Most of the companies have been graded as 2 out of 5 by the rating agencies thus indicating their fundamentals to be below average except few such as A2Z maintenance

and United bank. This is also reflected in the fact that the stocks of such companies were not able to trade at a price near to its intrinsic value. Thus any of these companies does not have any reason to be traded at a price above its issue price although all their ipos were issued at a higher price than the book value per share at the time of the issue. If we see the two companies which are traded at a price equal to its intrinsic value: Jindal cotex which has a brand of Jindals attached to it and then NHPC which has its 86% of share with the President of India has been able to gain the confidence of investors although none of them has paid good dividend. Thus we can say that ipos, if overpriced, need a reason to sustain at a price above its issue price. If the investors do not have any reason then it is difficult for an IPO to sustain at a price above its issue price. But is it good for an IPO to be overpriced? Fine if it has given good returns but what if it is neither paying back to the investors. Then in that case the stock holders are at a loss. Their wealth keeps on decreasing with the dropping price of an overpriced IPO.

2.RECOMMENDATIONS
Today most of the ipos are issued at a high price. There is no harm in issuing an IPO at a higher price for the promoters, as they are the initiators of the company and has supported it to grow to a level it is now. But what about the investors, especially the small retail investors, who put their hardly earned money in the Share market just in a hope to earn the benefits. But these days, mostly every IPO irrespective of whether they are backed by strong fundamentals or not are overpriced. And after a few years when the value of such IPO drops the small investors are at a loss. Thus what I think is 1There must be some criteria of fixing the floor price of an IPO in the book building process. Thus there will be an automatic limitation on the cap price and thus the maximum price of the IPO. 2Sometime during Book building process people bid at a very high price which raises the price of the stock. It sometimes happens just because some investors who are financially not sound think that it is going to perform well in the market. But when it comes to the market it is not well accepted by the traders and thus the price of the stock keeps on decreasing and thus putting everyone into a loss. This can be prevented if SEBI comes up with some plans of educating the investors. The government too should come up with some plans to increase the financial literacy of the investors which will not only help the investors and stock market but our economy will also be benefited by such measures. 3The information provided by a company to SEBI before issuing an IPO is not checked for their authentication. They are just checked so as to provide the company with the eligibility to issue an IPO. Thus there must be a body to check the authentication of the information. 4SEBI should also release the prospectus/offer document in different local languages too so as to help the investors to be fully aware about the company before investment.

5There should be a provision that the rating agencies should not just grade the ipos but also help the investors by providing there comment about the company and the IPO. This will help those investors who want to invest but do not have sufficient financial knowledge.

Chapter-6

BIBLIOGRAPHY

www.investopedia.com www.sebi.com www.moneycontrol.com www.bhseindia.in www.nseindia.com www.bseindia.com www.google.co.in

text book: Financial market & services by GORDEN NATRAJAN.