A Project Report on PRIMARY & SECONDARY CAPITAL MARKET For

Submitted by

Project submitted in Partial fulfillment for the award of Degree of

MASTERS OF BUSINESS ADMINISTRATION

ACKNOWLEDGEMENT
I take this privilege to thank my Principal and also the management and staff of my college for providing the guidance and support during my thesis. I express my profound gratitude to my esteemed guide Assistant Professor in Finance for providing the guidance and support during my thesis. I express my sincere thanks to my guide Mr. XXXXXX, in charge Training, at XXXX for sparing his valuable time in giving the valuable information and suggestions all through, for the successful completion of the project. I also express my sincere thanks to all the employees at ZZZZZZZ who have directly or indirectly contributed to the successful completion of the project Last but not the least I would like to express my sincere gratitude to my parents, friends and all the people who have extended their continuous support throughout the project.

ABSTRACT
New issues markets and stock exchange are a part of the capital market where the shares, debenture, bonds and other securities of companies and government are traded. The stock Exchange provides facilities for exchange of shares into money and vice versa. new issues market is the primary market where the issues can sell securities, but cannot buy. Stock exchange is defined as an association of member brokers who assists, facilitate and regulate trading in securities. One can buy and sell in the stock exchange or secondary market.These securities are issued by the government by the companies under the companies act and by the government under the Indian public debt act. The data as expressed above was collected through DDDD STOCK EXCHANGE in course of interviewing through attending classes. The secondary data was provided for the studying through company literature business magazines, brochures and internet played a major role in collection of data The stock exchanges should set up guidance cells to provide required help to thecompanies seek enlistment. A uniform check list exhibiting the standard set Norms required by the stock exchanges the admission of securities for trading should be prepared.

An efficient capital market is necessary to ensure allocation of capital in an Economy. An efficient marker is one in which market operation ensure that the Prices of securities quickly adjust to new information and reflect it in the market Price.The Indian capital market has undoubtedly made spectacular growth during the Nineties thanks to the process of liberalization, privatization, and globalization

TABLE OF CONTENTS

S.No I II 1 2 3 4

Name Of Contents List of Tables List of Graphs Introduction Review of Literature Company Profile Data Analysis and Interpretation

Page No i ii. 1-4 5-48 49-70 71-80

5 6

Summary & conclusions Bibliography

81-82

LIST OF TABLES

S.NO 1 2 3 4

TABLES Table Showing Sensex Table Showing Nifity Sensex Table Showing INFOSYS Price Moving Table Showing SAIL Price Moving

PAGE NO
73 75 77 79

LIST OF GRAPHS

S.NO 1 2 3 4

GRAPHS Graph Showing Sensex Graph Showing Nifity Sensex Graph Showing INFOSYS Price Moving Graph Showing SAIL Price Moving

PAGE NO
74 76 78 80

INTRODUCTION

Objective of the study:

The main objective of study is to aware prospects about trading and settlement procedures of stock exchanges (NSE & BSE) To create awareness regarding primary market and secondary market to prospects. To provide information to the prospects regarding the various investment opportunities and instruments available in the primary and secondary capital market. To find the performance and functioning of stock Exchanges and their works.

 To make aware of the rules & regulations of the primary and secondary capital markets & role-played by SEBI & RBI. To obtain the information about the depository the participants in India i.e. (NATIONAL SECURITIES DEPOSITORIES LIMITED AND CENTRAL DEPOSITORY SERVICE LIMITED)

Scope of the study:

My study on primary and secondary capital market was done for a period of six weeks in XXXXX pvt ltd. My aim was to conduct a research on primary and secondary market and how the technique are to invest in them .A part from that the stock exchanges and there operation in share transferring in the organization and its importance. My study is also pertaining, primary and secondary capital market its process and finally measures. The present study is a exploratory one, because it includes in analyzing the accurate events or situations that are been followed and method of managing its primary and secondary capital market

Primary market:
Primary Market comprises making the security issues and the public at large subscribing to them. Primary market is where a company markets it first contact with public at large in search of capital.

Secondary market:
Secondary Market comprises the buyers and the sellers of shares and debentures subsequent it he original issue, the further translations in the shares after allotment will be done in the secondary market that is the stock exchange. The sales and the purchases of securities take place in the stock exchanges

Objective of the study

The main objective of study is to aware prospects about trading and settlement procedures of stock exchanges (NSE & BSE) To create awareness regarding primary market and secondary market to prospects. To provide information to the prospects regarding the various investment opportunities and instruments available in the primary and secondary capital market. To find the performance and functioning of stock Exchanges and their works. To make aware o the rules & regulations of the primary and secondary capital markets & role-played by SEBI & RBI. To obtain the information about the depository the participants in India i.e. (NATIONAL SECURITIES DEPOSITORIES LIMITED AND CENTRAL DEPOSITORY SERVICE LIMITED)

Scope of the study:

My study on primary and secondary capital market was done for a period of six weeks in interconnected stock exchange. My aim was to conduct a research on primary and secondary market and how the technique to invest in them .A part from that the stock exchanges and there operation n share transferring in the organization and its importance. My study is also pertaining, primary and secondary capital market its process and finally measures. The present study is a exploratory one, because it includes in analyzing the accurate events or situations that are been followed and method of managing its primary and secondary capital market in interconnected stock exchange

LIMITATION There have some difficulties while abstracting the information from the organization such As: The brief study of capital market was undertaken in this project work even though it covers many aspects Only brief introduction about the depository participant and their performance could be included in the study The data collected for this study is inaccurate because the required data could not gather completely The brief guidelines for SEBI are undertaken in this study The desisted securities were not included because of this time factor.

METHODOLOGY:
For the preparation of this report the collection of relevant data is very essential. The data collected for these studies a) PRIMARY DATA b) SECONDARY DATA a) PRIMARY DATA: The data as expressed above was collected through HYDERABAD STOCK EXCHANGE in course of interviewing through attending classes b) SECONDARY DATA: The secondary data was provided for the studying through company literature business magazines, brochures and internet played a major role in collection of data

CHAPTER-2 REVIEW OF LITERATURE

PRIMARY MARKET/NEW ISSUES MARKET

New issues markets and stock exchange are a part of the capital market where the shares, debenture, bonds and other securities of companies and government are traded. The stock Exchange provides facilities for exchange of shares into money and vice versa. new issues market is the primary market where the issues can sell securities, but cannot buy. Stock exchange is defined as an association of member brokers who assists, facilitate and regulate trading in securities. One can buy and sell in the stock exchange or secondary market.

These securities are issued by the government by the companies under the companies act and by the government under the Indian public debt act Companies Act: The companies act which regulates the activities of the companies from birth to death has provided for the sources of finance for companies and the methods of marketing the public issues which are marketable. these are in the form if ownership category, namely, equities and preference shares and debt capital in the form if convertible and non convertible debentures, fixed deposit etc. under the companies act1956, sections 55 to 68 provided for issues of prospectus, its contents, registration of prospectus, civil and criminal liabilities of the directors for any misstatement in prospectus etc. securities are made byA) Public limited companies, b) Government and semi government bodies, and c) Public sector undertaking. Primary markets are markets in which users of funds (e g, corporations) raise funds through new issues of financial instruments, such as stocks and bonds. The fund user has new project or expanded production needs, but do not have sufficient internally generated funds (such as retained earning) to supports these needs. Thus, the fund users issues securities in the external primary markets to raise additional funds. New issues of financial instruments are sold to the initial In the primary market, the new issues of

suppliers of funds (e g., households) in exchange for funds (money) that the issuer or user of funds needs. Most primary market transactions in the united states arranged through financial institutions called investment banks for example, Morgan Stanley or Lehman brothers who serve as intermediaries between

issuing corporations (fund user) and investors (fund suppliers) Securities generally have two stages in their lifespan. The first stage is when the company initially issues the security directly from its treasury at a predetermined offering price. This is a primary market offering. it referred to as the initial public offering(IPO). For these public offerings, the investment bank provides the securities issuer (the funds user) with advice on the securities issue (such as the offer price and number of securities to issue) and attracts the initial public purchasers of the securities for the funds user. By issuing market securities with the help of on investment bank, the funds user saves risk and cost of creating a market for its securities on its own (see discussion below) figure 1-1illustrates a time line for the primary market exchanges of funds for a new issue of corporate bonds or equity Rather then a public offering a primary market sale can take from of a private placement, the securities issuer seeks to find an institutional buyer such as a pension fund or group of buyers to purchase the whole issue. Figure 1-1 Primary and secondary market transfer of funds time line PRIMARY MARKETS

(Where new issues of financial instruments are offered for sale) Users of Funds (Corporations issuing Dedt/equit instruments) Underwriting with Investment Bank Initial Suppliers of Funds (Investors)

SECONDARY MARKETS (Where financial instruments, once issued, are traded) Financial Market Securities Brokers Other Suppliers Of Funds

Financial instruments flow Funds flow

Why primary and secondary funds are still of key interest

Investors in private equity funds have seen their returns plummet over the last couple of years ad are understandably cautions at the moment. However, as Charles soiling of fond vest argues, Primary and secondary equity while still controlling risks. Over the past six years, private equity has experienced an aggressive growth, both in terms of capital under management and amount invested, and fund of with their specific techniques and particularities. Even in such a tricky economic environment, do fund of funds still allow Investors to take advantages of private equity? (1) Update of the private equity fund business in 2004 Situation of the private equity industry in 2004

After a five years period of constant and significant, 200 has been the year of a downturn, reducing the euphoria and slowing the flows of funds into the industry. This is showing the market the way back to fundamentals. The euphoria period lasted around five years, from 1995 to 2000. Carried by the growth of stock markets, institutional Investors enjoyed larger resources. Looking for diversification and attracted by high returns on private equity Investments, they allocated more capital to the private equity industry. The declaration period started them in 2000 with the slowdown on stock markets. Some fund managers. Especially the euphoric ones have had to cope with difficult situations for their portfolio companies. Last year has shown the continuation of the deceleration period, with a global slowdown of both raised capital and Investments, in the US and in Europe. In line with the general slowdown in the economic activity and the aggressive decrease of international stock markets, the Investors generally remain extremely cautious in their private equity Investors. Due to the slowdown of distributions in cash and the erosion of net asset values. The situation of the private equity industry can be compared to the situation of 1991/92 a world wide economic crisis, weak stock markets and an automatic global over cautiousness of institutional Investors Funds of Funds Are Of Interest In such a difficult environment private equity funds of funds remain an effective vehicle they allow Investors to take advantage of private equity while still controlling risks.

The delegation to a fund of funds team for managing non-listed assets gives the opportunity to male the best of a complex environment and still provided Investors with higher performance than in other asset classes. For some of them is an optimum risk/diversification ratio and a high selection of underlying funds. Two major points characterize the private equity fund of fund business: Proliferation: on a worldwide basis, the funds of funds underwent

important growth over the past five years with now more than 150 vehicles currently under management. Heterogeneousness: on a European basis, the funds of funds are Extremely different one from the other

The main differences are: a) type of assets ( combination of primaries secondary and

investments in companies) b) c) d) e) Investment mode (guaranteed bonds, non quoted or quoted) Sector of activity and geographical focus Type of investor Size of invested funds

The crucial issue is choosing the right fund of management team, the specialized, recognized and experienced team that will be able to offer high performance to investors with risk diversification and quality of reports.

Three major points must be taken into consideration to select a fund of funds manager Performance: the concept of performance deals with four elements that cannot be analyzed separately: IRR, multiples, timing and return in cask only the synthesis of these elements can show the global performance of a fund of funds manager. Performance also has to be proven- the point is to demonstrate how the performance is obtained- and sustained on a long-term basis. Only a few Teams have demonstrated such proven performance over several private equity cycles. Team: the fund of funds management team needs to appear homogeneous and coherent with capital under management fund management. Fund managers also need to have an extensive. Experience in private equity and in other business. Back office departments have to provide Investors with useful information and transparent reports. Teams have to be structured as private equity organizations one manager for one investment rather than management teams with distinct research analysis and trading departments. Strategies and deal flow investment strategies will differ form one fund of funds manager to another but all strategies need to be clearly specified to the investor On the other hand, the seniority and established presence in the market of the fund of funds manager will provide with investment opportunities.

A solid and consistent performance combined with the seniority of the management teams give the investor the opportunity to benefit from the most interesting investment in private equity In selecting its fund of funds manager the investor must choose on the basis of how they do in the race for performance rather than on volume. 2) THE PRIMARY FUNDS OF FUNDS Description: primary funds of funds invest in funds at their inception and such investments are long-term investments equivalent to direct investments in private equity funds primary funds of funds are able to provide Investment institution with a large diversification in terms of geography, industry, interventions(venture, growth, buyout) and investment strategies. The reasons for success: Direct investments in private equity funds needs important cash allocations as minimum capital commitments applicable for the best private equity managers have continued to escalate, Moreover, top-quartile finds are often oversubscribed and many of them ate accessible by invitation only, even in such a deceleration cycle private equity industry goes through. This elitism in best private equity Investment opportunities parley explains the success of recognized fund managers who are able to offer financial

INTERMEDIARIES OF A PRIMARY MARKET

MERCHANT BANKERS: The merchant bankers as intermediaries have been playing an imported role in the Indian capital market. The merchant banker is not an ordinary banker

rather their operations cover a specific financial service area. The service offered and undertaken by their merchant bankers is known as merchant banking. The functions of there merchant bankers are governed by the SEBI (merchant bankers) Regulations, 1992. The term merchant banker means any person who is engaged in the business of issue management either by making arrangement regarding selling, buying or subscribing to securities or acting as manager, consultant advisor or rendering corporate advisory service in relation to such issue management. A merchant may undertake the following service for the issuing company. To carry on their activities, they must be registered with the SEWBI which can also renew the certificate of registration. 1. Bankers to a issue: The bankers to an issue are engaged in activities such as acceptance of applications along with application money from the Investors in respect of issues of capital and refund of application money. 2. Brokers to the issue:

Brokers are the people mainly concerned with the procurement of subscription to the issue from the prospective investors. The companies are free to appoint any number of brokers: This all intermediaries of primary capital in market which deals with the stock or securities of the companies and they securities and exchanges board of India. REGISTRATION:-

To carry on activity, as a banker to issue person must obtain a certificate the SEBI. The SEBI grants registration the basis of all the activities relating to banker to issue in particular with reference to the activities relating to bankers to an issue in particular with reference to the following requirement, the application has the necessary infrastructure communication and data processing facilities and manpower to effectively discharge his activities. Registration Certificate No stock brokers, sub brokers, share transfer agent banker to an issue, merchant banker, underwriter, portfolio manager, Investment advisor, depository custodian of securities, foreign institutional Investor, credit rating agency and such other intermediaries who may be associated with securities market should buy, sell or deal in securities except underhand in accordance with the condition of a certificated of registration obtained from the SEBI. Penalty:- the SEBI is empowered to impose penalties on different

intermediaries for failure/default of rules and regulation where has made by SEBI. There are some primary markets intermediaries are as follows: a) b) c) d) e) f) Call Money Market Treasury Bills Market Commercial Bill Market Commercial papers Market Certificate of Deposits (CDs) Market and Money market Mutual Funds(MMMFs).

Secondary Market/stock Market/Exchange (SE)

The secondary market deals in Old/easting securities which were rented stock exchange listing. SE provides liquidity to investments. It has a physical existence and in located in a particular geographical area. The second stage is when an investor or dealer makes the shares, bough from a company treasury, available for sale it other investors on the secondary market, In the secondary market, the trading of shares is between investors . this trading usually takes place through a stock exchange, such as the Toronto, New York, Montreal or CDNX Stock Exchange. New Brunswick regulates the Secondary market only indirectly by requiring the dealers and salespeople who sell investments to be to be registered. The securities Administration Branch is a repository of registration information. Investors can find out if their dealer or salesperson. Is registered and whether has ever been disciplinary action against the dealer or salesperson. Investment dealers frequently buy initial offerings on the primary market and resell the securities on the secondary markets. Secondary Market refers to the network is system for subsequent sale and purchase of securities. Investors can apply market. However once allotted, the securities can there after be sold and purchased in the secondary in the secondary market only security emerges or takes birth in the primary market but its subsequent movement take place in secondary market. In India the secondary market represented by the stock exchanges started operations in Mumbai. Gradually stock exchanges at other places have been established and at present there are 24 stock exchanges operating in India.

Out of 24 stock exchanges the other 21 stock exchanges are operating at Mumbai, Calcutta, Ahmedabad, Delhi, Indore, Bangalore, Hyderabad, Cochin, Kanpur, Gawahati, Mangalore, Patna, jaipur, rajkot, Trijvanduram, besides there is on ices established by 14 regional stock exchanges the latest stock exchanges to be recognized and registered with SEBI is Trivanduram which gokt its registration with effect from August f19, 1999 for a period of 3 years. Out of 24 stock exchanges only 2 i.e the NSI and the OTCEI been established by the India financial institutions while other stock exchanges are operating as associations. The secondary market function follows, 1. The secondary marker allows investors to sell to other Investors the

securities by in the primary market, this provides the liquidity that allows investors to purchase securities without having to hold them indefinitely or unit maturity. 2. The secondary market helps firms to price the securities they are

going to sell in the primary market. 3. The secondary market widens the ownerships of a firms securities

when Investors make direct purchases in the secondary market as appeased to depositing funds with the 4. mutual funds banks etc.

The price of a firms securities in the secondary market has a direct

impart on the wealth of the shareholders and it is directly depend on the profit of firms. TRADING PROCEDURE AT THE STOCK EXCHANGE:

Securities can be traded at a stock exchange only if it is Listed at the stock exchange or any other stock exchange, the listing is a procedure under which the issuing company has to inter into an agreement called the listing agreement (which has been prescribed by the SEBI) with a stock exchange and has to there by abide by various clauses of the listing agreement regarding disclosure of information payment of listing fee, redresser of Investors grievance, etc, once listed at any stock exchange of listing fee. Redresser of Investors grievance, etc, once listed at any stock exchange the security require that a the securities must be listed on at least one regional stock exchange. The transaction (i.e. sale and purchases) in securities at the stock exchange can be undertaken only through the registration share brokers so an Investors desiring to enter into a transaction has to place an order with one or the other share broker in the out-cry system. The deals are generally confirmed (i.e. the transaction has taken Place) after a time gap a few hours but in the screen based (i.e. computer based on line) system the deals are confirmed immediately, the Investors will then give delivery of securities (incase of sale) or will make the payment (in case of purchases) ti the stock broker. The stock broker in turn will make the payment for the securities purchased on the completion the settlement program of the stock exchange. Generally it takes 15 to 20 days for the completion of a transaction (i.e., between the date of transaction and the data of delivery/payment to the Investors).

But the SEBI has formulated on January 10 th 2000 the system rolling settlement or the daily settlement the transaction can be acquired up only on Sunday and if not, then the delivery takes place on next days per SEBI directive. At present in India there are only two nation-wide stock exchanges. Over the Counter Exchange of India (OTCEI) and National Stock Exchange (NSE). All the other Exchange is regional OTCEI and NSE are both totally computerized and totally dependent on the telecommunication links. OTCEI was incorporated in October 1990 under section 25 of the companies act 1956. with an objective of setting up a national, ring less screenbased, automated stock exchange. DEPOSITORIES AND SCRIPLESS TRADING:A major reform of the India stock market has been the introduction of the depository system and scrip less trading mechanism since 1996. The depositories system enables the conversion of physical securities (i.e. the certificate) into electronic from through a process of dematerialization of certificate. The Investors can get his shares converted from depository made to physical mode through of process of Dematerialization.

DEVELOPMENTS IN THE SECONDAY MARKET:-

In the recent years, many steps were to reform the stock markets. These measures were taken too broken the market and make it function with greater transparency and in the best interest of investors, the steps taken are

a) Continuous Monitoring of stock market Operations: SEBI monitoring the operation of stock exchanges with a view to ensuring that the dealings are conducted in the best interest of the financial environment in the country. Any violations of rules and regulations on the part of the stock exchanges or the trading members involve penalties. b) Changes In The Management Structure: In the earlier Periods the boards of stock exchanges were dominated bv brokers whose decisions were self-centered and served their own interests. According to the recent SEBI guidelines. 50 percents off the directors must be not directors or government representatives and a non member professional shall be appointed as the executive director. c) Safe Guarding the Interest of Investors: Stock exchanges are instructed to take timely action the redressal of Investors grievances. It is mandatory for stock exchanges to have an Investors service cell to look into the complaints of Investors and take appropriate action against thee guilty. Investors have been permitted to from association and register them under the SEBI. These association are expected to promote the interest of Investors and create awareness about various investment avenues dealings in stock exchange, illegal transaction etc., d) Transparency of Accounting Practices:

To ensure correct pricing mechanism and wider participation, all attempts are being taken to achieve transparency in trading and accounting procedures. f) Prohibition of Insider Trading The ban on insider has prevented any insider from dealing in securities of any listed from dealing in securities of any listed company on the basis of any unpublished price sensitive information. g) Prevention of Price Rigging: SEBI has greater powers to curd price rigging on stock exchanges SEBI has taken stringent action against the brokers who indulge in rice rigging thus all efforts are being to protect the interest of genuine Investors. h) Discouraging Price Manipulation: The SEBI is taking all steps to prevent price manipulations in all stock exchanges. It has instructed all stock exchanges to keep special margins in addition to the normal ones on the scripts which are subject to wide price fluctuations. The stock exchanges have been directed to suspend treading in scrip in case any one of the stock exchanges suspends trading in that scrip for more than a day due to price manipulation of fluctuation. H) Introduction of Electronic Trading: The OTCEL, BSE and NSE started trading through electronic medium. Under this system, Investment counters can be spread throughout the country under the electronic network. This has created a national market, with no physical location, no trading ring, no stock exchange building, no hustle and

bustle scenes etc., which are a common sight in a conventional exchange with a trading. i) Introduction of Depository System: A depository is an organization where the securities of a share holder are held in the electronic from though a process of dematerialization. The physical transfer of shares is substituted through electronic media. Since the operations are computer linked, they are transparent speedier and cost effective. The introduction of depository system has avoided bad deliveries, forgery, theft and delay in settlement j) Buy back of shares: To strike a balance between the demand and supply of shares in the market, companies are permitted to buy back their own shares, it is expected that the idle cash in the hands of one company will be channeled to another company having a pressing need and it will be used to correct the valuation of their stock. k) Trading in derivatives:-Dr-L.C.Gupta committee has recommended introducing trading in index future and option. The starting of derivatives trading a has opened anew chapter in the history of stock exchange .

THE SECONDARY FUNDS OF FUNDS:

Description: the secondary market date back to the global economic crisis of the early 1990s. Which produced a large lack of liquidity among lots of financial and corporate institution, especially those with illiquid assets such as private equity? This situation created mew activities in the private equity market: secondary funds of funds.

Different types of intervention there are two main types of transaction. A first one is based on auctions. The seller or its intermediary organizes the sale of a portfolio of interests in private equity approaching a certain number of potential buyers, reselected or not. These transactions concern mega transactions involving hundreds of million of euros. These transactions are often linked to mergers, a total change in investment strategy or corporations focusing on their core activities.

The second type of intervention is the detection of secondary investment opportunities, the concern more limited transactions in seize. Thus, Fond invest capital, a secondary player specialized in mid-market transactions worldwide, invests in secondary transactions on a proprietary deal flow basis that is to say with little competition. This requires long experience in investment in funds, technical expertise in valuation transactions, and seniority in relationships with general partners and a high degree of confidentiality. The reasons for successes Acquisition of secondary position offers the following advantages: a) Secondary market positions can usually be purchased with

discount on re-evaluated net assets, especially if the purchased is experienced and has develop-ed a proprietary flow b) significant Amounts already invested, which eliminates the risk of blind investments. Investment in Secondary acquisition are made in funds with

c)

It offers acceleration of financial returns. Which gibes more liquidity

and security to the investor. The Selection of Secondary Opportunities A secondary fund of funds manager bases its analysis for objectives based on performance-IRR and cash on cash multiple but also on the notion of return on cash in a shorter period (for example when 100 per cent of the commitment of the fund has already been returned to investors). Thus secondary acquisitions require a deep analysis of each underlying company, which is made to compare the value with the one, communicated by the general partner and allows the evaluation of the possible year of exit and the expected amount of exit. The quality of the general partner is also of prime importance: the quality and experience of the management teams is estimated, with the profile of each professional, and their capacity to work together. Investment decisions in secondary funds are based on: a) A demonstrated expertise in direct private equity including a systematic approach to evaluating underlying companies b) Experience in having dealt with a large number of transactions. C) Experience in having secured its secondary transactions with a high degree of confidential d) The ability to deliver proposals on a short term basis and proven flexibility in negotiating with the seller

Confidentially, expertise in direct investments, flexibility and noncompetitive acquisitions are the basis of successful secondary funds of funds. Appropriate Situation for Borrowing Secondary Credit: Secondary credit is subject to a higher level of lending administration than primary credit. Examples of appropriate uses of secondary credit include; Tight money markets volatility Addressing an overnight overdraft Meeting a need for backup funding including a short-term liquidity demand Inability to obtain funding from normal sources To assist the primary regulator in prompt closure of a troubled Inappropriate situations for borrowing secondary credit Arbitrate opportunities To facilitate balance sheet expansion

For The General Public The Discount Window functions as a safety value in relieving pressures in reserve markets extensions of credit can helprelioeve liquidity strains in a depository institution and in the banking system as a whole. By supplying liquidity during times of systemic stress, the discount window also helps to assure the basic stability of the payments system more generally. When the federal Reserve system was established in 1913, Lending reserve funds through the discount window was intended as the principal instrument of central banking operations.

Although the discount window was long ago superseded by open market operations as the most important tool of monetary policy, it still plays a complementary role. Banks and other depository institutions traditionally have borrowed from the Federal Reserves Discount Windows when they face a temporary, unexpected, need for funds. Historically, the Federal Resave lent adjustment credit to meet such needs. Reserves Banks relied on two basic principles in administering adjustment credit: Borrowers had to have an appropriate reason for seeking a

discount windows loan Borrowers has to fully use other reasonable available sources of

funds before turning to at he discount windows Banks and other saw the Federal Reserves administration of adjustment credit as a burden and as varying in consistency. Also institutions that borrowed adjustment credit to meet routine short- time needs expressed concern that banking supervisors and other might see borrowing as a sign of financial weakness. These factors contributed to the notion of a stigma associated with borrowing from the discount window. That stigma deterred some institutions from using adjustment credit when ding so would have been appropriate. Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock

Exchange; Majority of the trading is done in the Secondary market. Secondary market comprises of equity markets and the debt markets. For the general investor the Secondary market provides an efficient platform for trading of his securities. For the management of the company, Secondary equity markets serve as a monitoring and control conduit by facilitating value enhancing control activities, enabling implementation of incentive-based management contracts and aggregating information (via price discovery) that guides management decisions. PRODUCTS OF SECONDARY MARKET Following are the main financial products/instruments dealt in the Secondary market: Equity: The ownership interest in a company of holders of its common and Preferred stock. The various kinds of equity shares are as follows Equity Shares: An equity share, commonly referred to as ordinary

share also Represents the form of fractional ownership in which a shareholder, as a fractional Owner, undertakes the maximum entrepreneurial risk associated with a business Venture. The holders of such shares are member of the company and have voting Rights. A company may issue shares with differential rights as to voting, payment Of dividend etc. Rights Issue/Rights Shares: The issue of new securities to

existing share holders at a ratio to those already held.The event of liquidation, their claims below the claims of the companys

creditors,Bondholders/ debenture holders.

Bonus Shares: Shares issued by the companies to their

shareholders free of cost by capitalization of accumulated reserves from the profits earned in the earlier Years. Preferred Stock/Preference shares: Owners of this kind of

share are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before Dividend can be paid in respect of equity share. Cumulative Preference Shares: A type of preference

shares of which dividend accumulates if remains unpaid. All arrears of preference dividend have equity shares. preference shares where the dividend payable on the same accumulates, if not paid. After a Specified date, these shares will be converted into equity capital of the level. Participating Preference Share: The right of certain preference Cumulative Convertible Preferences Shares: A type of to be paid out before paying dividend on

shareholders to participate in profits after a specified fixed dividend contracted for is paid. Participate right is linked with the quantum of dividend paid on the equity Shares over and above a particular specified level

Bond: A negotiable certificate evidencing indebtedness. It is

normally unsecured. A debt security I generally issued by a company, municipality or government Agency, A bond investor lends money to the issue and in exchange, the issuer Promises to repay the loan amount on a specified maturity date, The issuer Usually pays the bond holder periodic interest payments over the life of the loan. The various types of Bonds are as follows-

face value.

Zero Coupon Bond: Bond issued at a discount and repaid at a

Periodic interest is paid. The difference between the issue price and redemption A price represents the return to the holder. The buyer of these bonds receives only One payment at the maturity of the bond. Convertible Bond: A bond giving the investor the option to

convert the bond Into equity at a fixed conversion price. Debentures: Bonds issued by a company bearing a fixed

rate of interest usually Payable half yearly on specific dates and principle amount repayable on particular Date on redemption of the debentures. Debentures are normally secured/ charged Against the asset of the company in favor of debenture holder Commercial Paper: A short term promise to repay a fixed amount

that is placed On the market either

TRADING IN SECONDARY MARKETS Trading in secondary market is done through a broker. An individual can contact a broker Registered with SEBI for arriving Broker is a member of a recognized stock exchange. Who is permitted to do trades on the Floor of the exchange He is enrolled as a member with the concerned exchange and is registered with SEBI. A Sub broker is a person who is A recognized stock

exchange. The identity of the broke or sub honker can he confirmed By Verifying the registration certificate issued by SEBI. A brokers registration number begins with the letters NIB and that of sub broker with the letters INS. An interested individual have to sign the member-Client agreement/sub broker Client Agreement for the purpose of engaging a broker to execute trades on your behalf from time and furnish details relating to yourself for enabling the member to maintain client registration from. The model agreement between broker client / sub broker client and know your client from can be viewed from SEBI website at www.sebi.gov.in. the Model agreement has to be executed on the non-judicial stamp paper. The agreement contains clauses defining the right and responsibility of client Vis a Vis broker /sub broker can also clauses in the Mode agreement as per their requirement

Details to be maintained by brokers:

The brokers have to maintain database clients, for which you have to fill client registration from. In case of individual client registration you have to broadly provide following information. Your name, address, educational qualification, occupation, residential status (Resident Indian./NRI/other). Particulars of bank account. Income taxes no (PAN/GIR) which also serves as unique client code. If you are registered with any other broker, then the name of broker and concerned stoke exchange and client code number. Proof of identity submitted either as Passport number/Driving licence/Rationcard/voters identity card. Each client has to use one registration from. Incase of joint names/family members, a separate from has to be submitted from each person. In case of corporate client, following information has to be provided: Name, address of the company/firm. Date of incorporation and date of commencement of business. Copy of memorandum and articles of association/Partnership deed. Details of Promoters/Partner/Key managerial Personnel the Company/firm in Specified format. Copies of annual report of last three years. Net worth of the Company Particulars of the Bank Account

 Income tax number of the company. Annual income in last three years and market value of portfolio. If you are registered with any other broker, then the name of broker and concerned Stock exchange and Client Code Number. In order to facilitate maintaining database of their clients. It is mandatory for a Brokers to use unique client code which will act as an exclusive identification for the Client. For this purpose, PAN number/passport number/driving License/Voters ID Number/ration card number coupled with the frequently used for bank account number And the depository beneficiary account can be used for identification. In the given Order, based on availability.

Placing an order: You can either go the brokers/sub brokers office or place an order on the Phone/internet or as defined in the Model Agreement given above. On receiving the Order the Stock Exchanges assign a Unique Order Code Number to each transaction. Which is intimated by broker to his client and once the order is executed, this order Code number is printed on the contract note. The broker member has to also maintain The of time when the client has paled order and reflect the same in the contract.

Execution of order:

You have to ensure receipt of the following documents for any executed on the Exchange. a. b. Contract note in Form A to be given within stipulated time. Purchase/sale note or confirmation memo in the case of a sub

broker It is the contract note/purchase or sale note (confirmation memo) that gives rise to Contractual rights and obligations of parties of the trade. Hence you should insist Contract note from stock broker and purchase/sale note (conformation memo) from sub broker. The contract note display the order number, order time and unique trade number The quantity and the price of the trade executed at the exchange can be verified by the exchange. The contract note also contains arbitration clause for raising dispute with the arbitrators as per the byelaws of the exchange. Contract Note: A broker has to issue a contract note to client for all transactions in the form specified by the stock exchange. The contract note inter-alias should have following: Name, address and SEBI Registration number of the member broken. Name of partner/proprietor/authorized signature. Dealing Office Address/Tel No/Fax no, code number of member given by the exchange. Contract number date of issue of contract note, settlement number and time period for settlement.

 Constituent (client) name/code number. Order number and order time corresponding to the trades. Trade number and order time. Quantity and kind of security brought/sold by the client. Broker age and purchase/sale rate are given separately. Service tax rates and any other charges levied by the broker. Appropriate stamps have to be affixed on the original contract not are it is mentioned that the consolidated stamp duty is paid. Signature of the stoke broker/authorized signatory. Incase of purchase and sale note provided by the sub broker, following additional information is provided. Name and SEBI Registration no of Sub broker. Name of affiliating trading member Purchase/sale note number. Corresponding contact note issued by the broker for relevant trade Number along with the date of contract. Both contract note and purchase/sale note provide for the recourse to the system of Arbitrators for settlement of disputes arising out of transactions. SETTLEMENT MODE: There are two modes of settlement of transaction pay in day and pay out day. Pay In day is the day when the brokers shall make payment or delivery of securities to The exchange. Pay out day is the day when the exchange makes

payment or deliveryOf securities to the broker. Since settlement cycle has been reduced from T+3Rolling settlement t OT+2 with effect from April 01, 2003, the exchanges have to Ensure that the pay out of fund and securities to the clients is done by the broker Within 24 hours of the payout. The Exchange will have to issue press release Immediately after pay out. The investors/clients can get direct delivery of shares in their beneficiary accounts. To avail this facility, you have to give details of your beneficiary account and the DP-ID of you broker along with the Standing Instruction for Delivery- In to your Depository participant for accepting shares in your beneficiary account. Given these details, the Clearing Corporation/Clearing House shall send pay out Instructions to the depositories so that you receive pay out of securities directly into The beneficiary account. The payment for the shares purchased is required to be done prior to the pay in date.For the relevant settlement or as otherwise provided in the Rules and Regulations of the exchange. The delivery of shares has to be done prior to the pay in date for the relevant settlement or ass otherwise provided in the Rules and Regulations of the exchange and agreed with broker/sub broker in writing. Brokerage: The maximum brokerage that can be charged by a broker is decided by the Stock Exchanges as per the Exchange Regulations. The SEBI (securities exchange board of india), 1992 stipulates that sub broker cannot charge from his clients a Commission which Is more than 1.5% of the value mentioned in the respective

Purchase or sale note. The trading member can charge : 1. Brokerage charged by member broker. 2. Penalties arising on specific default on behalf of client (investor)3. Service tax as stipulated. The broker age and service tax is indicated separately in the contract note. Delay in payment by broker In case a broker fails to deliver to you in timely and proper payment of money / shares or you have complaint against conduct of the stock, you can file a complaint with the respective stock exchange. The exchange is required to resolve all the complaints. To resole the dispute, the complaint can also resort arbitration as provide on the reverse of contract note / purchase or sale note. However, if the complaint is not addressed by the stock exchange or is unduly delayed then the complaints along with supporting documents may be forwarded to secondary market Department of SEBI. Your complaint would be followed up with the exchange for expeditious redresses. In case of complaint against a sub broker, the complaint may be forwarded to the concerned broker with whom the sub broker is affiliated for redresses. Sources of Redresses of grievances Your have the following recourses available Investor Grievance redresses cell (IGG): you can lodge Complaint

with IGG Cell of SEBI against companies for delay, non-receipt of shares, refund

orders etc.., and with stock exchanges against brokers on certain trade disputes or non receipt of payments/securities. Arbitration: If no amicable settlement could be reached, then you can make application for reference to Arbitration under the Bye Laws of concerned Stock Exchange. SECONDARY MARKET INTERMEDIARIES The stock brokers and forgone brokers are the major intermediates in the secondary corporate securities market. (1). STOCK BROKERS :A stock broker is a recognized stock exchange who buys, sells or buy deals in securities certificate or registration from the SEBI is empower to impose conditions while granting the certificates a member of stock exchange. REGISTRATION:A broker registration with the SEBI has to apply through the stock exchange of which he is a member .The application must be forwarded by date of receipt the SEBI check whether or not he is eligible to be a member of stock exchange, has the necessary infrastructure including manpower to effectively discharge his activities, and as past experience in the businesses of buying selling of dealing in securities. PAYMENT OF FEE :Every registration broker has to pay the SEBI a registration fee based on the annual turn over that is the aggregate of the sale and purchase prices of securities received and receivable by the stock broker during any financial year.

If an annual turn over upped RS 1 core , assume of Rs 5,000 is to paid as fee to the SEBI. For an annual turn over in access of RS 1 Core, the hundred of one percent of the turnover in excess of RS 1 Core , for each financial year. (2). SUB-BROKER:A Sub-broker acts on behalf of a stockbroker as an agent or otherwise for assassinating investors buying-selling or dealing in securities thought such brokers but he is not a member of stock exchange .Sub brokers act as sub brooders a certificate of registration from the SEBI is required IT grants a registration certificate to a Sub-broker subject to the condition that he: Pays the prescribed fee Takes adequate steps for re-dressed of investors grievances within

one month of the receipt of the complaint Is authorized in writing by brokers for affiliation in buying, selling or

dealing in securities. REGISTRATION OF SUB-BROKERS:According to the SEBI regulations currently in force sub-broker is required to submit along with the application A recommendation from a stock broker with whom he will be affiliated To reference, including one from his banker the application has to submit to the concerned stock exchange, which has to verify the information contained in it. It has also to certify that the applicant is eligible for registration as per the specified eligibility criteria, mainly and individual applicant is not less than 21

years of age, has passed the equivalent of it least 1211 standard examination from a recognized institution and is a fit and a proper person. PAYMENT FEE:The annual fee payable by a sub-brokers is RS 1000 for an initial period of five years, after the expire of 5 years an annual fee RS 500 is payable as long as the certificate remains in force. (3).FOREIGN BROKERS:Foreign institutional investors (FIIS) now play a significant role in stock markets which a view to helping the FIIS to flow the procedure and encourage them to invest in India, the SEBI has issued the different guidelines for foreign brokers. REGISTRATION WITH THE SEBI:A foreign broker has to inter-alias disclose the SEBI name(s) registration number(s) of the overseas stock exchanges where he is registered in the capacity of a broker-dealer together with an undertaking that he would operate and assist only of behalf of registered FIIs and would not deal in securities on advice from the SEBI. The RBI would accord approval to him to open (a) a foreign currency denominated bank account and a rupee account which a designated bank branch and (b) multiple custodian accounts with the approval custodian of all registered FIIs.

CHAPTER-3

COMPANY PROFILE

CONCEPT: COMPANY PROFILE

THE OBJECTS INCIDENTEL AND ANCILLARY TO THE ATTAINMENT OF THE MAIN OBJECTIVES ARE: To acquire all or any party of the business or property and any liabilities of any person, firm, association, or company possessed of property suitable for any of the purpose or company of this company or carrying on any business which this company is authorized to carry on and upon any terms and for any consideration and in particular for cash or in consideration of the issue of shares, stock or obligations of the company. To apply for purchase, or otherwise acquire, any patents, licenses, concession and the like conferring any exclusive or non exclusive or

limited right to use, on any secret or other information relating to the business which mat seem capable of being used for any for the purpose of the company, or the acquisition of which may seem calculated directly or indirectly to benefit the company and to use exercise, Develop or grant licenses in respect of or otherwise turn to information so acquired. To payout of the companys funds, the cost and expenses incurred in connection with all matters preliminary and incidental to the formation, promotion and incorporation of this company and the costs and expenses incurred in connection with all matters preliminary and incidental to formation and incorporation of any company which may be promoted by this company. Account the property rights or

 To remunerate any person or company for services rendered or to be rendered in placing or assisting to be place or guaranteeing the placing any of the shares in the companys capital or debentures, debenture stock or other securities of the company or the conduct of its business. To borrow or raise money or any terms without security or on the security of land, buildings, machinery, tools, bills of exchange, promissory notes, bonds, bills of lading, warrants, Stocks, shares, debentures, book debets undertakings of the company and properties of every description or any one of them. To give any guarantee or provide and security in connection with loan made by any other person, firm or body corporate to any person, firm, body corporate, for any purpose whatsoever and on any terms whatsoever. To invest and deal with the monies of company not immediately required in such manner as may from time to time be determined. To create, execute, grant or issue any mortgages, debentures, debenture stock or bonds either at par, premium or discount and either redeemable, irredeemable secured upon all or any part of the undertaking rights and properties of the company present and future including uncalled capital or the unpaid calls of the company. To amalgamate with any other company having objects altogether or in part similar to those of this company.

 To promote and aid in promoting constitutes, firm, organize companies, syndicates or partnerships of kinds of the Purpose of acquiring and undertaking any property and liabilities of the company or of advancing directly or indirectly objects there of, or for any other purpose for which this company may think expendient. To enter into partnership or into any arrangement for sharing profits upon of interests, co-operations, joint venture, reciprocal concession or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transactions capable of being conducted so as to directly or indirectly benefit this company. To pay for any properities, rights or privileges acquired by the company either in shares or debentures of the company or partly in shares and debentures and partly in cash or otherwise, To take otherwise, acquire, and hold shares in any other company having objects altogether or in part similar to those of this company or carrying on other business capable of being conducted as to directly or indirectly benefit this company. To contribute subject to the provision of low to the funds of any association or to any individual, firm or body corporate which in the opinion of the company is beneficial to the company? To contribute to charitable and other funds whether directly or indirectly, relating to business of the company or for welfare of its employees.

 To grant pensions or guarantees to any employee or to his window or children and generally to provide for welfare of all employees. To purchase or take on lease or in exchange, hire or otherwise acquire any movable or immovable properties and Any rights or privileges which company may think necessary or expedient for the purpose of its business. To sell the undertaking of the company or any part there of for such consideration as the company may think fit and in particular for shares, debentures or securities of any other company having objects altogether or in part similar to those of this company. To sell or sub-let any concession or license obtained or contracts entered in to and generally to sell the whole or any Part of the property and business of the obligation of any person or persons. To improve, manage, cultivate, develop, exchange let in lease, company for the shares or

mortgage, sell, dispose off, turn to accounts, grant rights and privileges in respect of, or otherwise deal with all or part of the properties and rights of the company. To open any kind of account in bank of and to take, accept, endorse and execute promissory notes bills of exchange instruments. To insure all or any of the properties or assets or obligations of the company of whatsoever nature, against any risk whatsoever. and other negotiable

 To get the company registered or organized in any foreign country. To adopt such means for making known the company as may seem expedient and in particular by all kinds of advertising. To do all or any of the above things as principals, agents, contractors, trustees or otherwise either alone or in conjunction with others, and to do all such other things as are incidental, or as the company may think conducive ti the attainment of the above objects or any of them. To establish and maintain agencies and branches at any place or places in the dominion of India, or other parts of the world for the conduct of business of the company.

OTHER OBJECTIVES: 1. To buy, sell, manufacture, refine, manipulate, import, export, and deal

wholesale or retail in commodities, substances, apparatus, articles and things of all kinds, capable of being used or which can conveniently be dealt in by the company in connection with any of its objects. 2. To carry on all kinds of agency business and to take part in the

management, supervision or control of the business or operations of any other company, association, firm or person and in connection there with to appoint and remunerate any directors, accountants and other experts or agents. 3. To carry on the business of export, import, distribution, of all merchandise

and to act as agents, stockists, distributors, for firms curve, pave, cement and maintain buildings, structures, and companies in India and abroad.

4.

To carry on anywhere in India or abroad the business as shipping agents,

ship managers, brokers, shippers, tug owners, trawler owners, boat and barge owners, light man, transporting and forwarding agents for land and waterways, dock owners, warehouse men and ship stores merchants. 5. To establish and maintain lines of steam and other ships and generallr to

transport goods and passengers and to purchase, charter hire, build or otherwise acquire ship and vessels or let out, hire, or charter or otherwise deal with and dispose of any such ships or vessels. 6. To carry on the business of developing of software on internet for various applications and various organization on internet, development of the internet connectivity design, implementation and maintenance. 7. To carry in India or anywhere the business of e-commerce, business,

internet fax gateway services or and other type of related business on internet. 8. To carry on the business of providing web sites and also providing technology for intranet activities and all activities on Internet. 9. To buy, sell, deal in import, export, carry on Research and Development of software and hardware and any other solutions in India or abroad. 10. To import training conduct seminars, workshops, short term, long term,

courses on computers, computer maintenance ,software development, soptware exports and to depute personnel to develop and design software in India or abroad. 11. To purchase, sell, develop, take in exchange, or on lease, hire or otherwise acquire whether for investment or sale, or working the same, any real or personal estate including lands, mines, business, building, factories mill, houses,

cottages, shops, depots warehouses, machinery, plant, stock in trade., mineral rights, concessions, privileges, licenses, easement or interest in or with respect of any property or interest in or with respect with respect to property whatsoever for the purpose of the company in consideration for gross sum or rent on partly in one way and partly in other or for any other consideration and to carry on business as proprietors of falts and buildings and to let on lease or otherwise apartments there in and to provide for the conveniences commonly provided flats, suites and residential and business quarters.

THE LIABILITIES OF THE MEMBERS OF THE COMPANY IS LIMITED ; 1.The authorized share capital of the company is Rs.10,00,000/- dividend into 1,00,000, equity shares of Rs.10/- each, with power for company to increase or reduce the said capital in power for company to increase or reduce the said capital in accordance with the applicable provisions of the companies act, 1956, and to issue any part of its capital, originally issued, with or without any preference priority or special privilege, or subject to any postponement of rights, and to any conditions or restriction, and so that unless the conditions of issue shall otherwise expressly declare, every issue of share, whether expressed to be preference or otherwise shall be subject to the powers herin before contained. 2. The share capital of the company (whether original, increased or reduced may be sub divided, consolidated or divided into such classes of shares as may be allowed under the law for the time being in force relating to companies with such privileges or rights as may be attached and to be held upon such terms as may prescribed by the Articles of association of the company.

PROMOTERS:

Trading, Risk Management and Settlement Software Systems: The software developed on the Microsoft NT platform, with consultancy assistance from Microsoft, are the most contemporary of the trading and settlement software introduced in the country. The applications have been built on a technology platform, which offers low cost of ownership, facilitates simple maintenance and supports easy up gradation and enhancement. The softwares are so designed that the transaction processing capacity depends on the hardware used; capacity can be added by just adding inexpensive hardware, without any additional software work. NATIONAL STOCK EXCHANGE The NSE was incorporated in November 1992 with an equity capital of Rs.25 Cores. The International Securities Consultancy (ISC) of Hong Kong has helped in setting up NSE. ISC has prepared the detailed business plans and installation of hardware and software systems. The promotions for NSE were financial institutions, insurances companies, Ltd., and stock holding corporation Ltd. It has been set up to strengthen the move towards professionalizing of the capital market as well as provide nation wide securities trading facilities to investors. NSE is not as exchange in the traditional sense where brokers own and manage the exchange. A two tier administrative set up involving a company board and a governing board of the exchange is envisaged. NSE is a national market for shares PSU bonds, debentures and government securities since infrastructure and trading facilities are provided. NSE-NIFTY:

The NSE on April on April 22, 1996 launched a new equity Index. The NSE50. The new Index which replaces the existing NSE-100 Index is expected to serve as an appropriate Index for the new segment of futures and options. Nifty means National Index for Fifty Stocks. The NSE-50 companies that represent 30 broad Industry groups with an aggregate market capitalization of around Rs. 1.70.000 All companies included in the index have a market capitalization in excess of Rs. 500 crs each and should have traded for 85% of trading days at an impact cost of less than 1.5% The base period the index is the close of price on nov 3, 1995, which makes one year of completion of operation of NSEs capital market segment. The base value of the index has been set at 1000. NSE-MIDCAP INDEX: The NSE Midcap index or the junior Nifty comprises 50 stocks that represent 21 boards Industry group and will provided proper representation of the madcap segment of the Indian capital Market. All stocks in the Index should have market capitalization of greater than Rs.200 cores and should have traded 85% of the trading days at an impact cost of less 2.5% The base period for the index is Nov 4, 1996, which signifies two years for completion of operations of the capital market segment of the operations. The base value of the Index has been set at 1000. Average daily turnover of the present scenario 258212 lakes and number of average daily trades 2160 lakes. STOCK EXCHANGES IN INDIA:

At present, there are 24 stock exchanges recognized under the securities contract (Regulation) Act, 1956, they are:

NAME OF THE STOCK EXCHANGE Bombay Stock Exchange(BSE) Ahmadabad share and stock brokers association Calcutta Stock Exchange association Ltd., Delhi Stock Exchange association Ltd., Madras Stock Exchange association Ltd., Indore Stock Exchange association, Bangalore Stock Exchange, Cochin Stock Exchange, Pune Stock Exchange Ltd., U.P Stock Exchange association Ltd., Ludhiana Stock Exchange association Ltd., Jaipur Stock Exchange Ltd., Gauhathi Stock Exchange Ltd., Mangalore Stock Exchange Ltd., Maghad Stock Exchange Ltd., Patna, Bhubenshwar Stock Exchange association Ltd., Over the counter Exchange of India, Bombay, Saurasthra Kutch Stock Exchange Ltd., Vsdodara stock Exchange Ltd., Coimbatore stock Exchange Ltd., 1958

YEAR 1875 1957 1957 1957 1957

1963 1978 1982 1982 1983 1983-84 1984 1985 1986 1989 1989 1990 1991 1991

INDIAN CAPITAL MARKET:

A new era in markets in India was in July 1991 with the starting of a process of financial and deregulation. Beginning with the (starting of a process of financial) deregulation of rupee by 20% in July 1991, Industrial Policy was totally reshaped to dispense with licensing of industries except the 18 scheduled or FERA and foreign trade liberation etc., were some of the other reforms. Fiscal policy was introduced to reduce the central budget. Definite and public sector undertakings were freed from Government controls by professionalism to their management giving great autonomy to them and by disinvestments of their shares in favor of public. Great role is visualized for the public sector in the future investment growth. Free entry and corporate units entry and exit foreign financial and corporate units from abroad would encourage free competition cost effectiveness and improved productivity in the Indian economy this would improve the growth of the economy role of private sector and the capital market.

FINANCIAL MARKET: The function of the financial market is to facilitate the transfer of funds from surplus sectors (lenders) to deficit sectors (borrows). Normally, households have excess of funds or savings, which they lend to borrowers in the corporate and public sectors whose requirements of funds far exceeds their savings. a financial market consists of investors or buyers, sellers, dealers and does not refer to a physical location, Formal trading rules and communication network for originating and trading financial securities link the participants in the market as else where in the world.

The Indian financial system consists of the Money market and the capital market. The money market has two components the organized and the un-organized. The organized market is dominated by commercial banks. The other major players are the reserve bank of India, life insurance Corporation, General Insurance Corporation, unit Trust of India, securities Trading Corporation of India Ltd., and Discount and Finance House of India. Other primary dealers and the various mutual funds. The core of the money market is the inter-bank call money market.

The reserve Bank of India occupies a strategic position by varying liquidity through open market operations, access to its accommodation and cost and availability of credit. Normally, monetary of short-term nature, are generally less than one year, are dealt in this market. CAPITAL MARKET STRUCTURE: The capital Market has been classified into two types of markets they are:

1. 2.

Primary Market. Secondary Market.

Primary market: Primary Market comprises making the security issues and the public at large subscribing to them. Primary market is where a company markets it first contact with public at large in search of capital. Secondary market: Secondary Market comprises the buyers and the sellers of shares and debentures subsequent it he original issue, the further translations in the shares after allotment will be done in the secondary market that is the stock exchange. The sales and the purchases of securities take place in the stock exchanges. Capital Markers Structure: THE PRESENT SECNARIO OF CAPITAL MARKET: The capital market can allocate efficiently and consequently contribute to economic development by channeling capital to more activity in the capital markets, which has been at unprecedented heights. The entry of the foreign money has given support to capital market as well as economic activities. SECURITIES EXCHANGE BOARD OF INDIA (SEBI): The SEBI was set-up in April 1988 to oversee and control the capital market& it has been given legal powers bestowed on it, has asked all the exciting stock broker and sub-broker of exchange to register with the SEBI despite initial opposition this task of registration was completed in 1992 only with increasing regulation by SEBI in exchanges the future role of the exchanges will be radically different from the present, as their development role will be increasing much faster than their regulatory role. To encourage

the investors the govt. Felt the need for setting up an open body to develop& regulate the stock market in India. It is a non-statutory body. Despite the various weakness & defect of the Capital Market, it has growth in width& resilience over the last few years. The quantum of the issue rose by nearly 50 lines over the last few years, the operations of the investment companies like UTI, GIC & Mutual funds have vastly expanded by the width of the market. The breadth & resilience of the market is to be expanded, further the potential is vest & is waiting to be tapped. The setting up of the depositories for the physical custody of shares regulation & other malpractices on the insider trading takes over, in the capital market. Objectives of SEBI: According to the preambles of the SEBI Act, the primary objective of the SEBI is to promote & orderly growth of the securities market and secure investor protection. For this purpose. The SEBI monitors the activities of not only stock exchange but also merchant bankers etc., the objectives of SEBI are as follows. (1) To protect the interest of investors, so that there is a steady flow of savings

into the capital market. (2) To regulate the securities market & ensure fair practices by the issues of

securities that they can raise resources at minimum cost. (3) To promote efficient service by broker, merchant brokers and other

intermediaries so that they became competitive and professional

COMPARISION BETWEEN PRIMARY AND SECONDARY FUNDS OF FUNDS

Pure primary and pure secondary funds of funds are very different one from the other in term of philosophy .The primary markets require long-term investments, from eight to 12 years generally. In case, the fund of funds manager overbids a specific management team, often specialized in a particular market or geographic areas, in a specific sector. The investment process requires time and capital calls are spread over a period of four to five years .On the other hand, the secondary markets can be considered as an opportunist market. Emphasis is put on performance and speed with which cash is returned as the investment horizon is generally below eight years. Unlike the primary funds of funds, secondary opportunities require adaptability and quick decision making. Usually, capital calls as limited to a two to three year period. In terms of performance, primary funds of funds usually offer high multiple and IRR levels as secondary funds of funds offer high IRR levels with over multiple levels as emphasis is put on quick returns.

DIFFERENCES BETWEEN PRIMARY AND SECONDARY CAPITAL MARKET:

In the primary market, securities are offered to public for subscription for the purpose of Raising capital or fund. Secondary market is an equity trading venue in which already Existing/pre-issued securities are traded among investors. Secondary market

could be either auction or dealer market. While stock exchange is the part of an auction market, over the counter (OTC) is a part of the dealer market.

Capital Market for corporate securities we can note the prominent position held by certain financial institution in moving funds from the savings sector to the investment sector via three main avenues a public issue, a privileged subscription, and a private placement. Investment bankers, financial intermidiateries, and the secondary marker are key institution that enhances the movement of funds.

DATA ANALYSIS AND INTERPRETATION

Sr. No.

Name of the issue

LTP

Date of Issue 19/03/2010 to 23/03/2010 17/03/2010 to 19/03/2010

Issue Size (lakh shares)

Price Range

Issue Price (Rs.)

Date of Listing

SHREE GANESH JEWELLERY HOUSE LIMITED PERSISTENT SYSTEMS LIMITED

142.69831

Rs.260 to Rs. 270

260

IL&FS TRANSPORTATION NETWORKS LIMITED PRADIP OVERSEAS LIMITED NMDC LIMITED DQ ENTERTAINMENT (INTERNATIONAL) LTD UNITED BANK OF INDIA

67.35

11/03/2010 to 15/03/2010 11/03/2010 to 15/03/2010 10/03/2010 to 12/03/2010 08/03/2010 to 10/03/2010 23/02/2010 to 25/02/2010

54.19 [] Equity Shares aggregating to Rs. 7,000 million

Rs.290 to Rs. 310

310

Rs.242 to Rs.258

258

106

Rs. 100 to Rs. 110

110

3322.432

Rs.300 to Rs.350

300

160.48

Rs. 75 to Rs. 80

80

* 18-Mar10

500

RURAL ELECTRIFICATION CORPORATION LIMITED MAN INFRACONSTRUCTION LIMITED TEXMO PIPES & PRODUCTS LTD HATHWAY CABLE & DATACOM LIMITED

19/02/2010 to 23/02/2010 18/02/2010 to 22/02/2010 16/02/2010 to 19/02/2010 09/02/2010 to 11/02/2010

1717.32

Rs. 60 to Rs. 66 For Retail,NIB & Reserve category Floor price 203/- For QIB category, any price above floor price

66

* 11-Mar10

386.3
-

56.25

Rs.243 to Rs.252

252

10

50

Rs.85 to Rs.90

90

11

205.45

12

ARSS INFRASTRUCTURE PROJECTS LIMITED

928

08/02/2010 to 11/02/2010

277.5 [.] equity shares aggregating upto Rs.10300 lacs

Rs.240 to Rs.265

240

13

NTPC Limited EMMBI POLYARNS LIMITED

14

22.05

03/02/2010 to 05/02/2010 01/02/2010 to 03/02/2010

4122.7322

Rs.410 to Rs.450. For Retail,NIB & Reserve category, Floor price 201/- .For QIB category, any price above floor price.

450

3-Mar-10

* 24-Feb10

15

D B REALTY LIMITED

454

29/01/2010 to 02/02/2010

16

AQUA LOGISTICS LTD SYNCOM HEALTHCARE LIMITED

17

134.65

25/01/2010 to 02/02/2010 27/01/2010 to 29/01/2010 27/01/2010

95.74 [.] Equity Shares aggregating to Rs. 15,000 Million [?] equity shares for cash aggregating upto Rs. 15,000 lacs

Rs.40 to Rs.45.

45

Rs.468 to Rs. 486

468

24-Feb10

Rs.200 to Rs. 225

220

* 15-Feb10

75

Rs. 65 to Rs. 75

75

RECENT IPOs IN YEAR OF 2010

RELIANCE
Date 3-May-10 4-May-10 5-May-10 6-May-10 7-May-10 10-May-10 11-May-10 12-May-10 13-May-10 14-May-10 17-May-10 18-May-10 19-May-10 20-May-10 21-May-10 24-May-10 25-May-10 26-May-10 27-May-10 28-May-10 31-May-10 Open Price 1026 1024.2 1010 1019.8 976 1051 1089 1076.05 1062 1067.7 1034.7 1020 1017 1001 989.9 1018 1025 994.9 1011 1029.95 1030.15 High Price 1032.6 1039 1023.55 1023.3 1060 1082 1089 1089.45 1093.4 1071 1034.7 1033.45 1017.75 1013 999.85 1048.95 1025 1010 1027.7 1039 1048.5 Low Price 1018.1 1013.5 1003.3 1004 976 1040 1063.35 1064.05 1062 1035 1009 1007.8 995.1 993.75 976.1 1016.45 982.75 991 1001.6 1014.5 1028.75 Last Price 1023.95 1019.2 1021.5 1007 1040 1080.8 1066.35 1080.5 1073 1037 1014.3 1021.5 997.3 999.95 995.65 1021.05 986.4 1007.2 1024.55 1035.05 1046.5 Close Price 1023.75 1021.15 1020.65 1007.85 1032.8 1079.4 1067.8 1082.95 1071.8 1043.65 1016.55 1020.6 998.65 999.95 995.55 1022.65 985.65 1008.05 1022.25 1036.65 1045.6 Total Traded Quantity 2865346 3965640 3423392 5454783 16472546 8697783 6017564 3496020 2731043 4151458 4711513 3530511 5965445 4246454 4381347 5652017 5770796 3137663 6264345 4008272 3782780 Turnover in Lacs 29367.29 40672.16 34765.79 55163.89 170072.7 92852.34 64670.9 37648.39 29507.37 43827.53 47838.14 36070.54 59908.62 42608.59 43309.79 58247.03 57480.61 31464.42 63767.32 41330.61 39371.56

1.As per RELIANCE secondary market opening price in the beginning was 1026 which showed a better price in between on 12may it has been raised to 1076 n at the end of the month it has fallen down to 1030.15 2. high price can be found on 13may which as been rised to1093.4 3. low as been found in 26may with 991Rs 4. closing price is 1082.5 on 12 may,which is higher in this month.

5 /3 /2 0 1 0 5 /1 0 /2 0 1 0 5 /1 7 /2 0 1 0 5 /2 4 /2 0 1 0 5 /3 1 /2 0 1 0

18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0

Turnover in Lacs Total Traded Quantity Close Price Last Price Low Price High Price Open Price

WIPRO
Open Price 668.9 681.4 655 671 650 649 676 672.75 687.9 678.8 652 646 654 650.2 641.5 652 645.5 638.2 650.2 665 665.8 High Price 678.75 681.4 675 685 655 677.5 676 683.35 692.7 680 660 665.7 655 662.8 648.2 655.2 645.5 653 664.7 666 676.1 Low Price 660 657.4 647.4 655 631 640.15 657.25 666.25 669.3 659.1 637 641.15 639 644 626.4 636.5 628 636.8 644 655.2 657.5 Last Price 674.25 658.8 674 659.6 637.1 673.65 668.5 680 673.05 660.5 646.5 658.5 649.5 655.9 639.4 649 632.7 646.15 658.3 665.1 673.9 Close Price 674.65 660 671.4 659.45 637.7 672.3 668.05 680.9 673.3 666.4 645.45 659.85 649.7 654.1 641.7 647.95 633.65 650.2 657.45 663.8 669.65 Total Traded Quantity 994782 512859 691584 623350 1061285 1375078 629113 1111053 1113302 703165 1436577 1016063 1079186 1695470 1371804 657406 548464 751229 1334665 560312 563801 Turnover in Lacs 6687.51 3426.49 4590.39 4123.28 6815.17 9076.37 4183.28 7534.36 7495.3 4735.51 9235.27 6686.73 6989.58 11112.08 8705.08 4249.91 3482.06 4859.47 8735.86 3703.28 3757.83

Date 3-May-10 4-May-10 5-May-10 6-May-10 7-May-10 10-May-10 11-May-10 12-May-10 13-May-10 14-May-10 17-May-10 18-May-10 19-May-10 20-May-10 21-May-10 24-May-10 25-May-10 26-May-10 27-May-10 28-May-10 31-May-10

1.As per WIPRO secondarymarket opening price in the beginning was 668.9 which showed a better price in between on 13may it has been raised to 687.9 at the end of the month it has fallen down to 665.8 2.high price can be found on 13may which as been rised to692.7 3.low as been found in 21may with 626.4Rs 4.closing price is 689.9 on 12 may. which is higher in this month

2000000 1500000 1000000 500000 0 1 4 7 10 13 16 19

Turnover in Lacs Total Traded Quantity Close Price Last Price Low Price High Price Open Price

INFOSYS TECH
Open Price 2708 2705 2649.4 2690.3 2638.1 2620 2669.8 2656 2684 2710 2635 2660 2626 2612 2568 2611 2586.85 2565.05 2627.8 2670.05 2735 High Price 2714.95 2706 2708 2690.3 2645.35 2683.8 2674.5 2698.9 2723 2727 2648.05 2660 2652.35 2634.55 2608 2630 2586.85 2639.9 2664 2684.4 2735 Low Price 2682 2655.5 2610 2645.55 2607.05 2620 2636 2652.25 2661.25 2630 2576.05 2582.05 2593.45 2586.5 2558.35 2579.25 2510.1 2556.25 2595.1 2637.3 2624.55 Last Price 2685.55 2660 2705 2658 2623 2658 2658 2679.65 2701 2640 2616.05 2634 2599 2605 2594.8 2605 2542.15 2610 2655 2675 2668.8 Close Price 2694.9 2666.15 2693 2658.15 2616.85 2675.7 2660.75 2681.7 2706.15 2651.9 2616.35 2629.2 2602.85 2600.75 2581.75 2600.4 2533.4 2621.05 2643.35 2677.45 2658 Total Traded Quantity 676119 822026 1515260 976045 1123049 704426 725353 1148147 615485 853062 1021353 893075 1492405 813609 890900 898263 1104766 983607 1414087 849249 877594 Turnover in Lacs 18242.32 22043.87 40321.17 25997.19 29482.9 18772.29 19249.65 30741.79 16648.05 22951.97 26546.46 23382.99 39147.15 21203.07 23027.85 23393.06 28091.76 25559.84 37197.47 22636.96 23307.17

Date 3-May-10 4-May-10 5-May-10 6-May-10 7-May-10 10-May-10 11-May-10 12-May-10 13-May-10 14-May-10 17-May-10 18-May-10 19-May-10 20-May-10 21-May-10 24-May-10 25-May-10 26-May-10 27-May-10 28-May-10 31-May-10

1. As per INFOSYSTECH secondarymarket opening price in the beginning was 2708 which showed a better price but a the end of month it has rised to 2735. 2. high price can be found on 31may which as been rised to 2735 3. low as been found in 25may with 2510.1Rs 4. closing price is 2706.15 on 13 may. which is higher in this month

1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0

5/ 3/ 20 10 5/ 10 /2 01 0 5/ 17 /2 01 0 5/ 24 /2 01 0 5/ 31 /2 01 0

Turnover in Lacs Total Traded Quantity Close Price Last Price Low Price High Price Open Price

TCS
Total Traded Date 3-May-10 4-May-10 5-May-10 6-May-10 7-May-10 10-May-10 11-May-10 12-May-10 13-May-10 14-May-10 17-May-10 18-May-10 19-May-10 20-May-10 21-May-10 24-May-10 25-May-10 26-May-10 27-May-10 28-May-10 31-May-10 Open Price 761.25 774.85 750 767.95 757 760 775 757 765.1 766 774.95 746 730 729 710 725 708 708 735 749.8 748.5 High Price 771.4 774.85 768 770.9 762.6 843 779 767.95 773.2 777 774.95 746 733 732.3 725.9 730 714 744.8 749.95 753.5 752.9 Low Price 754.1 756.8 740.15 759.2 735 745 753.9 751.1 761.45 755 734.1 726.3 716.3 716.15 685.25 712.7 691.55 704.1 727.2 735.5 738 Last Price 767.9 761 766.6 768 742 771 754.4 758.65 764.3 762.85 745.9 735.05 722.55 730.2 717.35 718 699.1 731 743.8 752.5 743.5 Close Price 766.8 761 765.75 767.1 741.4 770.25 756.3 759.45 765.6 763.85 745.75 735.1 721.5 730 718.7 717.6 699.55 738 741.85 750.8 743.05 Quantity 1208280 1448014 2185615 1290436 2133576 1163907 675644 1370038 660726 1013498 1861025 1599590 1964633 1199046 1337546 1442714 1148683 1844732 3441936 1239687 1663830 Turnover in Lacs 9229.67 11082.43 16574.16 9879.97 16003.55 8864.83 5123.01 10409.71 5068.28 7806.92 13816.82 11758.99 14203.95 8719.45 9590.76 10382.48 8098.66 13404.37 25481.9 9244.69 12369.99

01 0

01 0

01 0

01 0

4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0

5/ 3/ 20 10

Turnover in Lacs Total Traded Quantity Close Price Last Price Low Price High Price Open Price

5/ 17 /2

1. As per TCS secondarymarket opening price in the beginning was 761.25 in between it has been risied to 774.95 on 17may which showed a better price but a the end of month it has fallen to 748.5 2. high price can be found on 11may which as been rised to 779 3..low as been found in 25may with 699.1Rs closing price is 770on 10 may.which is higher in this month.

HDFC
Open Price 2799.95 470 485 2835 461 2800.1 452 2790 470 2735 468 2757.1 2765.1 475 473 2796 485.1 2804.4 2785.55 495 480.1 2750.05 490 2755 High Price 2849 480 490 2847.7 467 2811.5 465 2802.9 470 2747.8 479 2799 2800 480 485 2799 500 2818.4 2819.5 500 490 2775.5 498 2784.5 Low Price 2793 470 469.95 2808 459 2766 449 2720.3 451.05 2690.5 468 2748 2753 473 473 2751 484.95 2781 2760 490 480.05 2715 490 2713 Last Price 2800.6 473.25 475 2813.2 460 2794.2 465 2750 459 2736 479 2796.25 2780 473 485 2781 499.25 2802 2772.3 490 483 2764.9 498 2730 Close Price 2801.6 474.65 473 2822.6 460 2801.15 464.4 2752.8 458.1 2726.8 477.5 2789.35 2773.3 473 485 2779.05 499.25 2808.75 2776.8 490 483.5 2759.45 498 2740 Total Traded Quantit y 813428 4440 15170 778381 9990 666323 5920 581677 17390 516587 7770 893117 449246 11100 237170 381053 21090 474779 325464 10730 82880 407869 272690 305324 Turnover in Lacs 22930.18 21.09 72.63 22046.7 46.05 18586.4 27.09 16025.1 79.19 14044.98 36.92 24777.51 12441.78 53.22 1134.8 10586.41 104.39 13296.62 9109.8 53.51 401.77 11163.09 1349.81 8359.44

Date 3-May-10 3-May-10 4-May-10 4-May-10 5-May-10 5-May-10 6-May-10 6-May-10 7-May-10 7-May-10 10-May-10 10-May-10 11-May-10 11-May-10 12-May-10 12-May-10 13-May-10 13-May-10 14-May-10 14-May-10 17-May-10 17-May-10 18-May-10 18-May-10

5/ 31 /2

5/ 10 /2

5/ 2 4/ 2

19-May-10 19-May-10 20-May-10 20-May-10 21-May-10 21-May-10 24-May-10 24-May-10 25-May-10 25-May-10 26-May-10 26-May-10 27-May-10 27-May-10 28-May-10 31-May-10 31-May-10

497.9 2724 475 2688.7 465 2670 2725 481.95 2654.7 465.2 2634.8 447.15 470 2688 2773 462.15 2772.25

498 2738 478.6 2725 478 2738.65 2749.75 482 2657.8 465.55 2711.95 460.5 475 2790 2803 462.15 2804.9

422 2667 463.05 2646.45 465 2651.25 2652 477.5 2600 440 2621.55 447 470 2672.1 2761.25 462.15 2761.5

474 2675 478.6 2720 475 2701.2 2660.2 477.5 2604.05 449.9 2679.7 460.5 470.15 2760 2789.9 462.15 2776.55

477 2673.7 478.6 2710.5 475 2710.2 2664.1 477.5 2610.1 449.45 2695.05 460.5 474.5 2763.8 2790.15 462.15 2789.75

677100 563801 5920 555393 272690 467033 949630 3330 473456 11100 457403 39960 17020 761447 605093 370 422321

3281.44 15191.15 27.93 14942.07 1294.82 12624.46 25348.16 15.95 12384.89 50.66 12199.31 182.86 80.18 20799.83 16856.55 1.71 11772.8

1200000 1000000 800000 600000 400000 200000 0

5/ 3/ 20 10 5/ 10 /2 01 0 5/ 17 /2 01 0 5/ 24 /2 01 0 5/ 31 /2 01 0

Turnover in Lacs Total Traded Quantity Close Price Last Price Low Price High Price Open Price

1. As per HDFC secondarymarket opening price in the beginning was 2799.5 in between it has been risied to 2804 on 13may which showed a better price but a the end of month it has fallen to 2772.25 2. high price can be found on 3may which as been rised to2849 3. low as been found in 19may with Rs. 422 4. closing price is 2822 4 may.which is higher in this month

Name of the issue

LTP

Date of Issue

No. of members

No. of Bidding centers

Price Range

Issue Price (Rs.)

Date of Listing

STANDARD CHARTERED PLC TARA HEALTH FOODS LIMITED JAYPEE INFRATECH LIMITED

25/05/2010 to 28/05/2010

102

66

Rs 100 to Rs 115

28/04/2010 to 05/05/2010

97

44

Rs.175 To Rs.185

104 Issue withdrawn on 05 May 2010

77.15

29/04/2010 to 04/05/2010

141

69

Rs 102 to Rs 117

102

21-May10

SJVN LIMITED MANDHANA INDUSTRIES LIMITED TARAPUR TRANSFORMERS LIMITED NITESH ESTATES LIMITED TALWALKARS BETTER VALUE FITNESS LIMITED GOENKA DIAMOND & JEWELS LIMITED INTRASOFT TECHNOLOGIES LIMITED SHREE GANESH JEWELLERY HOUSE LIMITED PERSISTENT SYSTEMS LIMITED IL&FS TRANSPORTATION NETWORKS LIMITED PRADIP OVERSEAS LIMITED

24.25

29/04/2010 to 03/05/2010

132

59

Rs.23 to Rs 26

26

20-May10

155.4

27/04/2010 to 29/04/2010

89

56

Rs120 to Rs130

130

19-May10

37.7

26/04/2010 to 28/04/2010

54

46

Rs 65 to Rs 75

75

18-May10

38

23/04/2010 to 27/04/2010

136

52

Rs.54 to Rs 56

54

13-May10

169.6

21/04/2010 to 23/04/2010

95

60

Rs123 to Rs128

128

10-May10

79.15

23/03/2010 to 26/03/2010

109

47

Rs. 135 to Rs. 145

135

16-Apr10

122.2

23/03/2010 to 26/03/2010

96

33

Rs. 137 to Rs. 145

145

114.75

19/03/2010 to 23/03/2010

93

49

Rs.260 to Rs. 270

260

9-Apr-10

379

17/03/2010 to 19/03/2010

100

47

Rs.290 to Rs. 310

310

6-Apr-10

11/03/2010 to 15/03/2010

150

47

Rs.242 to Rs.258

258

30-Mar10

67.4

11/03/2010 to 15/03/2010

76

73

Rs. 100 to Rs. 110

110

5-Apr-10

NMDC LIMITED

10/03/2010 to 12/03/2010

93

71

Rs.300 to Rs.350

300

DQ ENTERTAINMENT (INTERNATIONAL) LTD

08/03/2010 to 10/03/2010

67

36

Rs. 75 to Rs. 80

80

23/02/2010 to

Rs. 60 to

18-Mar-

ASTER SILICATES LIMITED Symbol - Series Issue Period Post issue Modification Period Issue Size Issue Type Face Value Price Range Tick Size Market Lot Minimum Order Quantity Maximum Subscription Amount for Retail Investor IPO Market Timings IPO Grading Rating Agency Book Running Lead Manager Syndicate Member Categories No. of Cities with Bidding Centers Name of the registrar Address of the registrar ASTERSIL EQ June 24, 2010 to June 28, 2010 29-Jun-2010 Public Issue of [.] Equity Shares of Rs. 10/- each for cash aggregating to Rs. 5310 lacs 100% Book Building Rs.10/Rs 112 to Rs 118 Re. 1/50 equity shares 50 equity shares Rs.100000 10.00 a.m. to 5.00 p.m. grade of 2/5 Brickwork Ratings India Private Limited Saffron Capital Advisors Private Limited Saffron Global Markets Private Limited and Reliance Securities Limited FI, IC, MF, FII, OTH, CO, IND, and NOH 57 Sharepro Services (India) Private Limited 13AB, Samhita Warehousing Complex,Sakinaka Telephone Exchange Lane,Off Andheri Kurla Road,Sakinaka, Mumbai 400 072 Mr. Subhash Dhingreja and Mr. Kumresan V Tel No 91 22 6772 0300 and 0400, Fax No 91 22 2859 1568 Email:aster.ipo@shareproservices.com

Contact person name number and Email id

Prospectus ASTER SILICATES LIMITED

Sr.No. Category Qualified Institutional Buyers (QIBs) Foreign Institutional Investors (FIIs) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) Mutual Funds Others Non Institutional Investors Corporates Individuals (Other than RIIs) Others Retail Individual Investors (RIIs) Cut Off Price Bids

No.of shares offered/reserved 2370535

No. of No. of times of shares bid total meant for for the category 0 0 0.00

1 1(a)

1(b)

1(c) 1(d) 2 2(a) 2(b) 2(c) 3 3(a) 3(b)

0 0 711161 0 0 0 0 1659375 156150 149950 6200 0.09 0.00

Updated as on 24 June 2010 at 1700 hrs

ASTER SILICATES LIMITED

INTRODUCTION SUMMARY SUMMARY ABOUT THE INDUSTRY GLOBAL CHEMICAL INDUSTRY The global chemical` industry, estimated at US$ 2.4 trillion, is one of the fastest growing sectors

of the manufacturing industry. Despite the challenges of escalating crude oil prices and demanding international environmental protection standards now adopted globally, the chemicals industry has still grown at a rate higher than the overall-manufacturing segment. As per industry reports the pharmaceutical segment contributes approximately 26% of the total industry output and approx. 35-40% is dominated by the petrochemical segment. Commodity chemicals is the largest segment in the chemicals market with an approx. size of $ 750 billion while the specialty and fine chemicals segment accounts for $ 500 billion. Some of the major markets for chemicals are North America, Western Europe, Japan and emerging economies in Asia and Latin America. The US consumes approximately one-fifth of the global chemical consumption whereas Europe is the largest consumer with approx. half the consumption. The US is the largest consumer of commodity chemicals whereas Asia Pacific is the largest consumer of agrochemicals and fertilizers.

SUMMARY ABOUT OUR COMPANYS BUSINESS Our Company is engaged in the business of manufacturing of sodium silicate which includes food grade sodium silicate, special drilling grade silicate and detergent grade silicate. We produce sodium silicate both in glass and liquid form. Food grade sodium silicate is used in the manufacturing of Silica precipitate and Gel which finds its applications in toothpaste, salt, cosmetics, glucose powder, tyre & rubber and pesticides etc. Sodium silicate, (special drilling grade silicate) is also used in off-shore drilling and for reactivation of old oil and gas fields. The sodium silicate manufactured by us is also used in water-proofing, infoundries and for investment casting, paper, silica gel, textiles and detergents. Currently, we operate from two (2) manufacturing units in Gujarat having an aggregate installed capacity of 150 MT of glass/day. Unit I has three furnaces with an average combined capacity of 100 MT of glass/day. All the three furnaces are triple pass regenerative and recuperative end fired glass furnace with multiple fuel arrangement, capable of using bio gas, coal and also natural gas. Unit II has a single furnace with a capacity of 50 MT of glass/day, which is also triple pass regenerative and recuperative end fired glass furnace.

Our Competitive Strengths Sound understanding in this line of business Professional management team Location and Cost Benefits Flexibility to adopt technology Focus on long term revenue stream

Our Business Strategy Maintain long-term relations with clients Technological investment Reduce operational costs and increase cost competitiveness 29 BRIEF DETAILS OF THE ISSUE Equity Shares offered: Fresh Issue by our Company [] Equity Shares of face value of Rs.10 each aggregating upto Rs. 5,310.00 Lacs Issue Price Rs. [] per Equity Share Net Issue to the Public [] Equity Shares of face value of Rs.10 each aggregating upto Rs.5,310.00 Lacs Of which: (A) Qualified Institutional Buyers portion (QIBs) [] Equity Shares of face value of Rs. 10 each constituting not more than 50% of the Net Issue to the Public (Allocation on a proportionate basis) Of the above [ ] Equity Shares, [] Equity Shares shall be available for allocation to Mutual Funds The balance [ ] Equity Shares shall be available to all QIBs, including Mutual Funds (B) Non-Institutional Portion [] Equity Shares of face value of Rs 10 each constituting not less than 15% of the Net Issue to the Public (Allocation on a proportionate basis) (C) Retail Portion [] Equity Shares of face value of Rs 10 each constituting not less than 35% of the Net Issue to the Public (Allocation on a proportionate basis) Note: Under-subscription, if any, in any of the categories would be allowed to be met with spill over from the other categories, at the sole discretion of our Company and the BRLM. Equity Shares outstanding prior to the Issue 1,03,61,111 Equity Shares of face value of Rs.10 each Equity Shares outstanding after the Issue [] Equity Shares of face value of Rs.10 each Use of Issue proceeds Please refer to the Section titled Objects of the Issue beginning on page 55 of the Red Herring Prospectus for additional information. 30 SUMMARY OF FINANCIAL INFORMATION

The following summary of financial data has been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations, 2009 and restated as described in the Auditors Report of our statutory auditors H B Patel & Associates, Chartered Accountants dated May 28, 2010 in the section titled Financial Information. You should read this financial data in conjunction with our financial statements for each of Financial Years 2006, 2007, 2008, 2009 and 2010 including the notes thereto and the reports thereon, which appears under the Section titled Financial Information and Chapter titled Managements Discussion and Analysis of Financial Condition and Results of Operations as reflected in the Financial Statements beginning on pages 116 and 137 of the Red Herring Prospectus. Summary statement of Assets & Liabilities, as restated (Rs. in Lacs) Sr. As at March 31 No. Particulars 2006 2007 2008 2009 2010 A. Fixed Assets Gross block 415.65 572.27 1282 2398.47 2393.68 Less: Depreciation 114.1 140.11 173.68 229.88 395.72 Total 301.55 432.16 1108.32 2168.59 1997.96 Less: Revaluation Reserve 0 0 0 492.01 492.01 NET BLOCK 301.55 432.16 1108.32 1676.58 1505.95 CAPITAL Work -in-Progress 0 0 0 0 929.4 TOTAL - FIXED ASSETS (A) 301.55 432.16 1108.32 1676.58 2435.35 B. Investments (B) 0 0 0 0 0 C. Current assets, loans and advances: Inventories 0 117.16 235.5 353.37 278.53 Receivables 99.51 163.45 174.22 678.13 1718.48 Cash and bank balances 26.04 39.16 4.29 8.01 45.6 Loans and advances 52.29 94.92 130.66 201.33 121.53 Other Current Assets 0 0 30.46 0 0 Total (C) 177.84 414.69 575.13 1240.84 2164.14 Total assets (A + B + C) 479.39 846.85 1683.45 2917.42 4599.49 D. Liabilities and provisions Secured loans 122.12 246.23 785.81 1181.82 1277.2 Unsecured loans 36.03 26.6 2 0 174.05

Deferred Tax Liability 45.12 76.74 110.41 175.94 365.68 Current liabilities 15.51 165.65 123.65 273 428.36 Provisions 2.96 2.09 4.33 4.7 328.69 Total Liabilities (D) 221.74 517.31 1026.2 1635.46 2573.98 E. Net Worth (A+B+C-D) 257.65 329.54 657.25 1281.96 2025.51 31 F. Represented by Share capital -Equity Share Capital 230.00 300.00 537.65 700.00 1036.11 -Preference Share Capital 0.00 0.00 0.00 0.00 0.00 Less:- Call in Arrears 0.00 0.00 0.00 0.00 0.00 Total 230.00 300.00 537.65 700.00 1036.11 Share Application Money 0.00 0.00 30.23 214.06 0.00 Reserves and surplus 56.68 70.93 136.72 883.64 1559.72 Less: Revaluation Reserve 0.00 0.00 0.00 492.01 492.01 TOTAL 56.68 70.93 166.95 605.69 1067.71 Less: Miscellaneous Expenditure (To the extent not written off) 0.63 0.47 2.72 23.73 78.31 Deferred tax Assets 28.40 40.92 44.63 0.00 0.00 Total 29.03 41.39 47.35 23.73 78.31 Net Worth 257.65 329.54 657.25 1281.96 2025.51 32 Summary statement of Profit & Loss, as restated (Rs. in Lacs) Sr. For the year ended March 31 No. Particulars 2006 2007 2008 2009 2010 A Income Sales of Products Manufactured by the Company 949.20 714.64 1526.56 3290.62 6187.25 Sales of Products Traded by the Company 0 0 0 0 0 Less Excise Duty 0 0 0 0 0 Net Sales 949.20 714.64 1526.56 3290.62 6187.25 Other Income 0.33 0.95 54.53 4.58 1.55 Increase/(Decrease) in Inventories -84.91 117.17 118.33 113.93 31.87

Total (A) 864.62 832.76 1699.42 3409.13 6220.67 B Expenditure Materials consumed 705.98 557.66 1299.74 2514.79 4435.77 Cost of Goods Sold Wages and Staff Costs 17.70 24.01 32.82 32.91 79.63 Other manufacturing expenses 28.16 133.53 153.24 253.49 394.37 Administrative, selling and distribution expenses 56.80 22.57 42.99 33.72 48.68 Loss on sales of Fixed assets 0 0 0 0 0 Total (B) 808.64 737.77 1528.79 2834.91 4958.45 C Profit Before Interest, Depreciation and Tax 55.98 94.99 170.63 574.22 1262.22 Depreciation 28.78 26.01 33.57 57.04 165.84 D Profit Before Interest and Tax 27.20 68.98 137.06 517.18 1096.38 Financial Charges 17.81 35.19 40.92 151.68 196.19 E Profit after Interest and Before Tax 9.39 33.79 96.14 365.50 900.19 Provision for Taxation 0.8 3.74 9.86 41.36 268.29 Provision for Deferred Tax 16.72 15.35 20.10 68.80 189.74 Provision for FBT 0.48 0.46 0.39 0.43 0 Add/Less Tax adjustment 0 0 0 0 0 Total 18.00 19.55 30.35 110.59 458.03 F Profit After Tax but Before Extra ordinary Items -8.61 14.24 65.79 254.91 442.16 Extraordinary items 0 0 0 0 0 Impact of material adjustments 0 0 0 0 0 for restatement in corresponding years (net of tax) (B) 0 0 0 0 0 Total 0 0 0 0 0 G Net Profit after adjustments -8.61 14.24 65.79 254.91 442.16 Net Profit Transferred to Balance Sheet -8.61 14.24 65.79 254.91 442.16 33 TRUSTEES

As this is an Issue of Equity Shares, the appointment of Trustees is not required. APPRAISAL AND MONITORING AGENCY The proposed funds requirement is not appraised by any Bank/Financial Institution. As the net proceeds of the Issue will be less than Rs. 50,000 lacs, under the SEBI (ICDR) Regulations, 2009 it is not required that a monitoring agency be appointed by our Company. However, as per the Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges upon listing of the Equity Shares and in accordance with the Corporate Governance requirements, the Audit Committee of our Company, would be monitoring the utilization of the Issue Proceeds. WITHDRAWAL OF THE ISSUE Our Company, in consultation with the BRLM, reserves the right not to proceed with the Issue after the bidding and if so, the reason thereof shall be given as a public notice within two days of the closure of the Issue. The public notice shall be issued in the same newspapers where the preissue advertisement had appeared. The Stock Exchanges where the specified securities were proposed to be listed shall also be informed promptly. If our Company withdraws the Issue after closure of bidding, we will be required to file a fresh draft offer document with the Securities and Exchange Board of India. In the event of withdrawal of the Issue anytime after the Bid/Issue Opening Date, our Company will forthwith repay, without interest, all monies received from the applicants in pursuance of the Red Herring Prospectus. If such money is not repaid within 8 days after our Company become liable to repay it, i.e. from the date of withdrawal, then our Company, and every Director of our Company who is an officer in default shall, on and from such expiry of 8 days, be liable to repay the money, with interest at the rate of 15% per annum on application money. BOOK BUILDING PROCESS Book building refers to the collection of Bids from investors, which is based on the Price Band, with the Issue Price being finalized after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are: Our Company; BRLM, in this case being Saffron Capital Advisors Private Limited; Syndicate Member(s) who are intermediaries registered with SEBI or registered as brokers with the Stock Exchange(s) and eligible to act as underwriters. Syndicate members are appointed by the BRLM; Registrar to the issue, in this case being Sharepro Services (India) Private Limited, Banker(s) to the issue, Refund Bank(s), and

 Self Certified Syndicate Banks 40 Regulation 43(2) of the SEBI (ICDR) Regulations, 2009 has permitted an issue of securities to the public through the 100% Book Building Process, wherein not more than 50% of the Net Issue shall be available for allocation to QIBs on a proportionate basis out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Qualified Institutional Buyers portion shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above Issue price. Further, not less than 15% of the Net Issue shall be available for allotment to Non Institutional Bidders and not less than 35% of the Net Issue shall be available for allotment to Retail Individual Bidders on a proportionate basis, subject to valid Bids being received at or above the Issue Price. We will comply with the SEBI (ICDR) Regulations, 2009 for this Issue. In this regard, we have appointed Saffron Capital Advisors Private Limited as the BRLM to manage the Issue and procure subscriptions to the Issue. The process of Book Building under the SEBI (ICDR) Regulations, 2009 is subject to change from time to time and Investors are advised to make their own judgment about investment through this process prior to making a Bid or Application in the Issue. QIBs are not allowed to withdraw their Bid after the Bid/Issue Closing Date. In addition, QIBs are required to pay entire bid amount upon submission of their Bid. Allocation to QIBs will be on a proportionate basis. For further details please refer paragraph titled Maximum and Minimum Bid Size beginning on page 178 under Chapter titled Issue Procedure beginning on page 173 of the Red Herring Prospectus. All the bidders have the option to submit their Bids under the ASBA Process, which would entail blocking of funds in the investors bank account rather than transfer of funds to the respective Escrow Accounts. For further details, please refer to the Chapter titled Issue Procedure beginning on page 173 of the Red Herring Prospectus. Steps to be taken by the Bidders for bidding: 1) Check eligibility for making a Bid (For details please refer to the paragraph titled Who Can Bid beginning on page 174 under Chapter titled Issue Procedure beginning on page 173 of

the Red Herring Prospectus); 2) Ensure that the Bidder has a demat account and the demat account details are correctly mentioned in the Bid cum Application Form including ASBA Form; 3) Ensure that the Bid-cum-Application Form including ASBA Forms is duly completed as per instructions given in the Red Herring Prospectus and in the Bid-cum-Application Form including ASBA Forms; and 4) Ensure that the Permanent Account Number is mentioned on Bid-cum-Application Form/ASBA Form. Bidders are specifically requested not to mention their General Index Register number instead of the Permanent Account Number as the Bid is liable to be rejected on this ground. 5) Bids by QIBs will have to be submitted only to the BRLM or Syndicate Member, other than bids by QIBs who bid though ASBA process, who shall submit the bids to the Designated Branch of the SCSBs. BID/ISSUE PROGRAM Bid/Issue opens on: June 24, 2010 Bid/Issue closes on: June 28, 2010 41 Bids and any revision in Bids shall be accepted only between 10.00 am and 5.00 pm (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form. Standardized cut-off time for uploading of bids on the Bid/Issue closing date is as under: 1. A standard cut-off time of 3.00 pm for acceptance of bids 2. A standard cut-off time of 4.00 pm for uploading of bids received from non retail applicants i.e. QIBs and HNIs. 3. A standard cut-off time of 5.00 pm for uploading of bids received from retail applicants, where the Bid Amount is up to Rs. 100,000 which may be extended up to such time as deemed fit by Stock Exchanges. Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the NSE and the BSE. Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, not later than the times mentioned above. All times mentioned in the Red Herring Prospectus are Indian Standard Time. Bidders are cautioned that due to clustering of last day applications, as is typically experienced in public offerings, some Bids may not get uploaded on the last day. Such Bids that cannot be uploaded will not be considered for allocation under the

Issue. If such Bids are not uploaded, our Company, the BRLM and the Syndicate Members shall not be responsible. On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received from Retail Individual Bidders after taking into account the total number of Bids received upto the closure of timings for acceptance of Bid cum Application Forms as stated herein and reported by the BRLM to the Stock Exchanges within half an hour of such closure. CAPITAL STRUCTURE The Share Capital of our Company as on the date of filing of the Red Herring Prospectus with SEBI is as set forth below: Nominal Value Aggregate Value Particulars (Rs.) (Rs.) A. AUTHORISED CAPITAL 2,00,00,000 Equity Shares of Rs. 10/- each 20,00,00,000 B. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL 1,03,61,111 Equity Shares of Rs. 10/- each 10,36,11,110 [ ] C. ISSUE IN TERMS OF THE RED HERRING PROSPECTUS [] Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share [] 53,10,00,000 D. NET ISSUE TO THE PUBLIC [] Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share [] 53,10,00,000 E. PAID UP CAPITAL AFTER THE PRESENT ISSUE [] Equity Shares of Rs. 10/- each [] [] F. SHARE PREMIUM ACCOUNT Before the issue 2,88,88,880 After the issue** [] **The Share Premium Account after the Issue will be determined after Book Building Process HISTORY AND OTHER CORPORATE MATTERS

Our Company was originally incorporated as Arbuda Steel Private Limited on August 27, 1996 under the Companies Act, 1956 vide Certificate of Incorporation bearing registration number 04 30581 issued by the Registrar of Companies, Gujarat, Dadra & Nagar Haveli. The name of our Company was changed to Aster Silicates Private Limited vide fresh Certificate of Incorporation dated April 13, 2006. Our Company was converted into a public limited company vide fresh Certificate of Incorporation dated December 4, 2009 and consequently the name of our Company was changed to Aster Silicates Limited. Our Company has been allocated Corporate Identification Number U27609GJ1996PLC030581. The current Promoters of our Company are Mr. Mahesh A. Maheshwari and Mrs. Namrata M. Maheshwari. Our Company was initially promoted to carry on the business of iron and steel under the name of Arbuda Steel Private Limited. However, we did not pursue the iron and steel business and we initiated the business of manufacturing sodium silicates under the trade name of Sterling Chemical Industries, proprietor - Arbuda Steel Private Limited and started commercial production of Sodium Silicate in July 1997 at the Kheda Unit with a capacity of 12 MT Glass/day. Currently, our Company operates from two units in Gujarat having an aggregate installed capacity of 150 MT of glass/day. Our promoter, Mr. Mahesh A. Maheshwari had his interests in the field of designing, combustion, during and after graduating as a Mechanical Engineer from L.D. Engineering College, Ahmedabad, he took forward his interests in designing energy saving furnaces and process technology in the area of sodium silicate, by promoting our Company. As on date, our Company has 35 members. Our turnover and profitability for last five years has been as follows: (Rs. in Lacs) For the year ended Particulars 31.03.06 31.03.07 31.03.08 31.03.09 31.03.10 Sales 949.20 714.64 1526.56 3290.62 6187.25 Profit before Taxation 9.39 33.79 96.14 365.50 900.19 Net Profit after Tax -8.61 14.24 65.79 254.91 442.16 Changes in Registered Office of our Company: Date of change Registered address changed from Changed to Reason for change On Incorporation 1-B, Gitanjali Society, Gordhanwadi, Maninagar, Ahmedabad. -August 28, 1996 1-B, Gitanjali Society, Gordhanwadi, Maninagar, Ahmedabad. 63, Jeevan Deep Row Houses, Opposite Suvas Flats, Thaltej, Ahmedabad 380 054.

Due to better infrastructure facilities September 30, 2007 63, Jeevan Deep Row Houses, Opposite Suvas Flats, Thaltej, Ahmedabad 380 054. A/602, Fairdeal House, Near Swastik Cross Road, Navrangpura, Ahmedabad 380 009. Due to better infrastructure facilities and central location of the new office in Ahmedabad 98 Major Events: Incorporated the Company in 1996 Started commercial production of Sodium Silicate in July 1997 at the Kheda Unit with a capacity of 12 TPD Modified the furnaces to single pass regenerators in 2004-05 for fuel efficiency (Kheda unit) Converted the furnace into a double pass regenerators in 2005-06 (Kheda unit) Converted the furnace into a triple pass regenerators in 2006-07 (Kheda unit) capable of running on coal and natural gas Furnace at Kheda modified to allow use of biogas and other multi-fuels as an alternate fuel in 2007-08 Started commercial production at the Bharuch Unit with a capacity of 50 TPD in April 2008 Signed an agreement with a German Public Company for carbon credit offset for switching the fuel source from conventional fuel source to biogas in 2008-09 (both Kheda and Bharuch unit). Further modified all the furnaces in 2008-09 to allow operation using 100% biogas Main Objects of our Company: The main objects of our Company, as contained in our Memorandum of Association, are as set forth below: To carry on the business as exporters, importers, factors, agents, consignors, manufacturers, consignees, dealers, distributors, shippers and packers of all type & kind of chemical such as soda ash, caustic soda, soda lie, sodium silicate in glass liquid, powder form of any molar ratio and inorganic chemicals, pigments, colours, acids, dyes, dye intermediates, auxiliaries, in India or elsewhere. Changes in Memorandum of Association since Incorporation: Particulars of Change Date of Meeting Whether AGM /

EGM Increase in Authorised Capital from Rs. 1 Lac to Rs. 42 Lacs 09.04.1997 EGM Increase Authorised Capital from Rs. 42 Lacs to Rs. 75 Lacs 31.03.1999 EGM Increase Authorised Capital from Rs. 75 Lacs to Rs. 100 Lacs 15.03.2004 EGM Increase Authorised Capital from Rs. 100 Lacs to Rs. 200 Lacs 30.03.2005 EGM Increase Authorised Capital from Rs. 200 Lacs to Rs. 230 Lacs 01.07.2005 EGM 99 Change in main Objects Clause: The main objects clause was replaced by the following new Objects Clause: 1. To carry on the business as exporters, importers, factors, agents, consignors, manufacturers, consignees, dealers, distributors, shippers and packers of all types and king of chemicals such as soda ash, caustic soda, soda lie, sodium silicate in glass, liquid, powder form of any molar ratio and inorganic chemicals, pigments, colours, acids, dyes, dye intermediates, auxiliaries in India or elsewhere. 25.03.2006 EGM Change of Name The name of our Company was changed from Arbuda Steel Private Limited to Aster Silicates Private Limited 06-04-2006 EGM Increase Authorised Capital from Rs. 230 Lacs to Rs. 300 Lacs 28.02.2007 EGM Increase Authorised Capital from Rs. 300 Lacs to Rs. 400 Lacs 18.07.2007 EGM Increase Authorised Capital from Rs. 400 Lacs to Rs. 500 Lacs 20.09.2007 EGM Increase Authorised Capital from Rs. 500 Lacs to Rs. 600 Lacs 25.03.2008 EGM Increase Authorised Capital from Rs. 600 Lacs to Rs. 700 Lacs 29.05.2008 EGM Increase Authorised Capital from Rs. 700 Lacs to Rs. 1,000 Lacs 30.03.2009 EGM Change of Constitution and Name Our Company was converted into a public limited company and the name of our Company was changed from Aster Silicates Private Limited to Aster Silicates Limited. 16.11.2009 EGM Increase Authorised Capital from Rs. 1,000 Lacs to Rs. 2,000 Lacs 07.12.2009 EGM Revaluation of Assets The gross block of fixed assets as per books as on March 31, 2008 was Rs. 1,282.00 lacs. Our Company has carried out valuation of the fixed assets, since the assets of the Company were not revalued since its inception and were being shown at a lower value in comparison to its market

value. The assets were revalued and the total value of assets due to revaluation was increased by Rs. 492.01 lacs. We have not issued any shares out of the revaluation reserves. Subsidiaries Our Company does not have any subsidiaries as on date of filing of the Red Herring Prospectus. Shareholders Agreements Our Company has not entered into any Shareholders Agreement with any entities as on date of filing of the Red Herring Prospectus. Other Agreements Other than as mentioned below there are no other agreements not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the issuer or a contract entered into more than two years before the date of the offer document. CDM Emission Reduction Purchase Agreement Our Company has executed a CDM Emission Reduction Purchase Agreement (" Agreement") with a public company existing under the laws of Germany ( German Company) wherein our Company after obtaining requisite approvals shall undertake project approved to generate CERs and German Company shall buy these CERs in accordance with the pricing terms and delivery schedule as specified in the Agreement. The Agreement further provides for certain procedural requirements to be fulfilled by our Company, completion of which shall determine the obligation under the Agreement, which are set out below: Sr. No Conditions Our Comments 1. Our Company shall obtain a secured DNA approval (Designated National Authority which is India is The National CDM Authority under the Ministry of Environment & Forests) from the host country; 2. Our Company must be authorised to participate in the project by the host country; 3. Our Company has registered the project; Approval No. 4/5/2009-CCC, dated August 03, 2009, received from Director Climate Change, Ministry of Environment and Forests, Govt. of India 4. German Company has obtained a secured DNA approval from Germany; and Obtained 5. Our Company shall obtain a written confirmation of German Company that it has conducted due diligence and the outcome of the due diligence has been satisfactory. The due diligence process has commenced and final outcome is awaited The Agreement further provides for Right of First Refusal (ROFR) to German Company for the purchase of any CERs after 2012 under equal conditions as being offered to third parties failing which our Company shall be liable to penalty of 1,00,000. The Agreement shall remain in force till the time the

Agreement is terminated in accordance with the terms and conditions mentioned under the clause "Termination Rights". The Project is currently under final validation process and subsequent to the approval from DOE, the same will be sent for UNFCCC for registration by the German company. Strategic Partners Our Company does not have any strategic partners as on date of the Red Herring Prospectus. Financial Partners Our Company does not have any financial partners as on date of the Red Herring Prospectus. 101 OUR MANAGEMENT The Board of Directors of our Company has an optimum combination of executive and nonexecutive Directors in compliance with Clause 49 of the Listing Agreement. Our Board has five Directors out of which 3 are independent director, which is in compliance with clause 49 of the listing agreement of the Stock Exchanges. Mr. Mahesh A. Maheshwari, Chairman and Managing Director is in charge of overall management of our Company subject to the supervision and control of the Board. The following table sets forth details regarding our Board of Directors as on the date of the Red Herring Prospectus:

OUR SIGNIFICANT ACCOUNTING POLICIES For Significant accounting policies please refer Significant Accounting Policies, Annexure 3 beginning on page 121 under Chapter titled Auditors Report and Financial Information of our Company beginning on page 116 of the Red Herring Prospectus. WE THE LEAD MERCHANT BANKER TO THE ABOVE MENTIONED FORTHCOMING ISSUE, STATE AND CONFIRM AS FOLLOWS 1. WE 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 FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE.

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT: a) THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THIS ISSUE; b) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND c) THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELLINFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE (AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS. 3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. 4. WE SHALL SATISFY OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. 5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED 159 FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS

CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF THE PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN, SHALL NOT BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS. 6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS. 7. WE CERTIFY THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 ARE NOT APPLICABLE TO THE ISSUER. 8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE MAIN OBJECTS LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION. 9. WE CONFIRM THAT NECESSARY ARRANGEMENTS SHALL BE MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE

BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT RED HERRING PROSPECTUS. WE SHALL ENSURE THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. 10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE ALLOTTED SHARES IN THE DEMAT MODE ONLY. 11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. 12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS: a. AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY AND b. AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME 160 TO TIME. 13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO

ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE. 14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC. 15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT RED HERRING PROSPECTUS/ DRAFT PROSPECTUS/ DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
MEETING OF DIRECTORS: Meeting of Directors

84. The Directors may meet together as a Board from time to time and shall so meet at least once in every three months and at least four such meetings shall be held in every year, and they may adjourn and otherwise regulate their meetings as they deem fit. The provisions of this Article shall not be deemed to be contravened merely by reason of the fact that a meeting of the Board, which had been called in compliance with the terms herein, mentioned could not be held for want of quorum. When meetings to be convened and notice thereof 85. A Director or the Managing Director may at any time and the Secretary upon the request of a Director shall convene a meeting of the Directors. Notice of every meeting of the Directors of the Company shall be given in writing to every Director for the time being in India and at his usual address in India and to every other Director as provided in Section 286 of the Act Quorum

86. Subject to the provisions of Section 287 and other applicable provisions (if any) of the Act, the quorum for the meeting of the Board of Directors shall be one third of the total strength of the Board of Directors(excluding Directors, if any, whose places may be vacant at the time, and any fraction contained that one third being rounded off as one) or two Directors, whichever is higher, provided that where at any time the number of interested Directors exceeds or is equal to twothirds of the total strength, the number of remaining Directors, that is to say, the number of Directors who are not interested and are present at the meeting, not being less than two shall be the quorum during such meeting. A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities powers and discretion by or under the Act or the Articles of the Company, for the time being vested in or exercisable by the Board of Directors generally. Company Profile: The Company was incorporated in 1996 as Arbuda Steel Private Limited to carry on the business of Iron and Steel. However, the company did not pursue the iron and steel business. The name of the Company was changed to Aster Silicates Private Limited in April 2006 and it was converted into a public limited company in December, 2009 as Aster Silicates Limited. Aster Silicates Limited (ASL) commenced manufacture of Sodium Silicate in July 1997. The Company now operates two units in Gujarat at Kheda and Bharuch having a capacity of 100 metric tonnes per day (MTPD) and 50 MTPD respectively. Kheda unit has three furnaces and Bharuch has one furnace. These are triple pass regenerative and recuperative end fired glass furnace with multiple fuel arrangement capable of using bio gas, natural gas and coal. ASL manufactures sodium silicate which includes food, special drilling and detergent grade silicate in glass and liquid form. Food grade sodium silicate is used in the manufacturing of Silica precipitate and gel which finds its applications in toothpaste, salt, cosmetics, glucose powder, tire & rubber and pesticides etc. Sodium silicate, (special drilling grade silicate) is also used in off-shore drilling and for reactivation of old oil and gas fields. Management: Aster Silicates is promoted by Mr. Mahesh A Maheshwari and Mrs. Namrata M Maheshwari. Mr. Mahesh aged 45 years is the Chairman and Managing Director of the Company. He holds bachelors degree in mechanical engineering. Mr Mahesh has 22 years experience in chemical industry. Prior to promoting ASL, Mr Mahesh provided consulting services for energy conservation, furnace designs and combustion systems to various industries. Aster Silicates Limited www.brickworkratings.com May-10 Mrs. Namrata Maheshwari aged 41 years is the director of the Company. She holds bachelors in electrical engineering from Sardar Vallabhai Regional College of Engineering and Technology, Surat. She has experience of working as a lead auditor for ISO 9001 with SGS India. She

currently manages the administrative and banking functions of the Company. Directors other than promoters of company: Mr. Jaykishore S Rana (75 Years) is a non executive and independent Director. Mr Rana has bachelor and master degree in electrical engineering. He worked in the R&D Centre of Jyoti Ltd, for 18 years. In the year 1983 he started consultancy services in the field of energy issues, energy conservation and energy audits. He retired from active consultancy in the year 2006. Mr. S. Venkatachalam (60 years) is a non executive and independent director. Mr Venkatachalam is a graduate in commerce and post graduate in import and export management from Saint Xaviers Institute of Management, Mum bai. He has worked with Karur Vysya Bank and has 25 years experience in foreign exchange. Mr. Manish G Asawa (36 year) is a non executive and independent director, Mr Asawa is B Com, ICWAI and CA (Inter). He has experience of 10 years in business of agriculture and farms and was the CEO of Pmanek Biofarms Pvt Ltd, Jamnagar. Mr Asawa promoted a proprietorship concern in the name of Alpha B&G in the year 2007 which deals in essential and organic oils, Aloe Vera and Natural Organic Fertilizers etc. Currently Promoter and promoter group holds 71.43% equity in company and they are not participating in the IPO. Post issue their equity holding will be diluted to about 51%.

D SUGGESTIONS Particulars Pre The stock exchanges should set up guidance cells to provide required help to the companies seek enlistment. A uniform check list exhibiting the standard set Norms required by the stock exchanges the admission of securities for trading should be prepared. The Primary markets must be include-improved disclosure standard, Introduction of prudential none and simplifications of issue procedure. Companies are must to be close all material facts and specific risk factors Associated with their project while making public issue. Once the completed listing application to the stock exchange, it: should not take more than the working days for admission of securities for dealing.

To educate the various investors regarding the Depository participants which Exist in India that (national securities depositories services limited and central Depository) service limited.

It is necessary to all the stock exchanges to follow the rules and regulations, which is formulated SEBI according to the circumstances of the secondary Marker segment.

The Indian capital market has become attractive due to the increasing supplication and range of tradable financial products . The availability of derivative products including index futures , index options,individual stock futures and individual stock options reinforce all overall attractiveness of this market to foreign and domestic investors

CONCLUSIONS
An efficient capital market is necessary to ensure allocation of capital in an Economy. An efficient marker is one in which market operation ensure that the Prices of securities quickly adjust to new information and reflect it in the market Price. The Indian capital market has undoubtedly made spectacular growth during the Nineties thanks to the process of liberalization, privatization, and globalization. The awareness among the Indian investors has shown al sea-change over the years the volume of business number of investors number of listed companys number of Investors and other participants the types of financial intermediarys ad services have inceased considerably.