Professional Documents
Culture Documents
ACTIVITIES AND
PROCEDURES
ELIGIBILITY NORMS
PRICING OF ISSUES
CONTENTS OF OFFER DOCUMENT
ISSUE ADVERTISEMENT
ISSUE OF DEBT INSTRUMENTS
BOOK BUILDING
GREEN SHOE OPTION
E-IPO
ISSUE OF CAPITAL BY DESIGNATED FINANCIAL INSTITUTION
A.S.SADHAM
14PBA155
For issue amount exceeding Rs.50 lakhs, draft prospectus, to be filed with SEBI,
through registered Merchant Banker, 21 days prior to filing with the ROC.
Not allowed for cost prohibited by SEBI from accessing capital markets.
The eligibility norms for issue of equity shares and convertible securities relate to (I)
Unlisted Companies (2) Listed companies.
It has net tangible assets of at least Rs.3 core each for preceding 3 full years, of which
subscription to be refunded.
The minimum post issue face value of the capital would be Rs.10 core .
An unlisted company complying all of the above, can allot equity shares/ convertible
securities only if the no. of the prospective allotted is not less than 1000.
All listed cos. Allowed to make public issue of equity/convertible securities if issue
size of aggregate of the proposed issue and all previous issues in the same financial
year , does not exceed 5 times its pre-issue net worth, as per last audited balance
sheet.
In case of change of name, the revenue under new name/activity should not be less
PRICING OF ISSUES:
Listed co. and unlisted cos. can freely price the equity shares/convertible securities
DIFFERENTIAL PRICING:
Listed /Unlisted cos. May issue shares/securities in the firm allotment category at
prices different from the price at which the net offer to the public , provided
The price at the firm allotment is done, is higher than the price at which securities are
ISSUE ADVERTISEMENT:
issue:
Ad should be true, fair, and not be misleading.
It should reproduce information contained in the offer document in full and disclose
relevant facts.
Extensive use of technical, legal terminology, and excessive details to distract
investors to be avoided.
No models , celebrities , fictional characters, should be displayed
Ads containing financial data should contain past three yrs. Data.
All ads to contain risk factors.
Public issue can be made only if credit rating of a minimum investment obtained from
BOOK BUILDING:
A process where the demand for the securities under Proposed issue ,is elicited and
built up and the price for such securities is assessed for the determination of the
allotment.
Prospectus to contain name of the book runner (merchant banker), and copy of the
same circulated to the institutional buyers eligible for the firm allotment.
Book runners to maintain record of the securities being ordered and price at which the
GSO means an option of allocating shares in excess of the shares included in the
public issue and operating a post listing price stabilizing mechanism through a
Generally the lead book runner, appointed as the SA (stabilizing agent). An agreement
is signed with the SA, prior to the filing of the offer document with SEBI.
Also an agreement with the promoters who would lend their shares, specifying max.
No. of shares, but in no case exceeding 15% of the total issue.
E IPO
through the broker, who opens a separate bank a/c. for the same.
On allotment, the computer file of the allotted is sent to the respective brokers, by the
issuing co.
Underwriters: lead merchant banker to ensure that issue closes on earliest date only
if it is fully subscribed, or it should continue for the required no. of days to take care
+ offer through
offer document. Offer through offer document should include net offer to the Indian
public and the reservations to the permitted reserved categories.
TERMS OF ISSUE:
Minimum no. of share applications and Application Money in Public:
Public issue at par : min. application is fixed at 200 shares with face value of Rs.10
Public issue at premium/issue of convertible or non-convertible securities: min.
issue price.
Full payment of securities: entire subscription money if collected through calls,
Period of Subscriptions: for public issues should be kept open for latest 3 working
days and not more than 10 days. For infrastructure cost max period is 21 working
days.
Rights Issue: between 30 - 60 days.
Other terms relating to Price band, retention of oversubscriptions, underwriting,
updating of offer document etc.,