A

PROJECT REPORT

ON

“INITIAL PUBLIC OFFERING”

AT

RELIANCE SECURITIES LIMITED

Project submitted in partial fulfillment for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION (M.B.A)

SUBMITTED
By
Mr. GADDE SANTHOSH
Roll No: 2262-18-672-050
UNDER THE GUIDANCE OF
Mr. MUBASHIR AHMED
ASST. PROFESSOR

DEPARTMENT OF BUSINESS MANAGEMENT

ACADEMY OF MANAGEMENT STUDIES
OSMANIA UNIVERSITY
HYDERABAD
2018-2020

i
 DECLARATION

I hereby declare that the project report titled “INITIAL PUBLIC OFFERING’’

submitted by me to the Department of Business Management of ACADEMY OF

MANAGEMENT STUDIES. It is an original work done by me for the partial

fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION,

Osmania University, Hyderabad.

I also declare that this report is my own and is neither submitted to any other university

nor published any time before for the award of degree or diploma.

Place:

Date:

Mr. GADDE SANTHOSH

Roll No: 2262-18-672-050
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude and indebtedness to DR. MOHAMMED

HASEEBULLAH, Principal of Academy of Management Studies, and my sincere thank
Mr. MOHAMMED BABAR ZAMAAN, Associate Director of Academy of
Management Studies for providing me an opportunity to carry out this project work and
providing valuable guidance, encouragement and moral support at every phase of this
dissertation.

I am thankful to my project guide Mr. MUBASHIR AHMED, (Assistant Professor of

AMS), for energetic support and suggestions throughout the period of project work. I am
grateful him for defining the problem so precisely which enabled me to put the best of
my to efforts complete the project.

I owe debt of gratitude to ALL MY FRIENDS and FAMILY, who extended timely
support and encouragement at the outset.

I wish to thank the management of RELIANCE SECURITIES LIMITED for their

kind gesture of following me to undertake this project, and its various employees who
lent their helping hand towards the completion of this project.

I like to show my deep sense of gratitude to my company guide Mr. PARTHA DAS,
FINANCE MANAGER for his support and guidance. Thanks and appreciation to the
helpful employees of RELIANCE SECURITIES LIMITED especially for their
support and for providing necessary information during the project.

Mr. GADDE SANTHOSH

Roll No: 2262-18-672-050
 ABSTRACT

Market returns before the offer price is set affect the amount and variability of initial
public offering (IPO) under-pricing. Thus an important question is “What IPO procedure
is best adapted for controlling under-pricing in “hot” versus “cold” market conditions?”
The French stock market offers a unique arena for empirical research on this topic, since
three substantially different issuing mechanisms (auctions, book building, and fixed
price) are used there. Using 1992–1998 data, we find that the auction mechanism is
associated with less under-pricing and lower variance of under-pricing. We show that the
auction procedure's ability to incorporate more information from recent market
conditions into the IPO price is an important reason. Many times when a private owned
company wants to raise funds, the financial institutions will insist on collaterals and
guarantees, and therefore, the amounts of funds to raise will be limited to the size of the
collateral. In the case of IPO, the funds that can be raised will be determined by the
confidence of investors on the company, with regards to the growth potential,
management team, governance etc. In an IPO exercise, the fund raising potential is way
beyond the amount that the company can raise via financial institutions. Comparing to
funding raising via financial institutions (debt funding), where the cost of financing is
high, and there could be requirements to place collaterals and guarantees for the
financing, the company may be able to raise funding at a much cheaper rates, and
without collaterals through the IPO exercise.
 LIST OF CONTENTS

S. No CONTENTS Page No
1
INTRODUCTION
 Need of the Study
 Objectives of the study
 Scope of the study 1-10
 Methodology of the study
 Limitation of the study

2 REVIEW OF LITERATURE 11-35

3 INDUSTRY & COMPANY PROFILE 36-57

4 DATA ANALYSIS AND INTERPRETATION 58-63

5 FINDINGS, SUGGESTIONS 64-67

AND CONCLUSIONS

6 ANNEXURE 68-70

BIBLIOGRAPHY 71-72
`

CHAPTER – I
INTRODUCTION

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 INTRODUCTION

A company can raise capital through issue of shares or debentures. The various types of
issues are: Public Issue, Rights Issue, Bonus Issue, Private Placement and Bought out Deal
There can be two kinds of public issues, namely:
• Initial Public Offer (IPO)
• Follow on Public Offer (FPO)

What does IPO mean? It refers to the process of offering shares of a privately-owned

company for sale to the general public. The first time these shares are offered is called IPO.

There are various reasons as to why a company wants to go for IPO, where the more

common ones as follows:-

Fund raising

Many times when a private owned company wants to raise funds, the financial institutions

will insist on collaterals and guarantees, and therefore, the amounts of funds to raise will be

limited to the size of the collateral. In the case of IPO, the funds that can be raised will be

determined by the confidence of investors on the company, with regards to the growth

potential, management team, governance etc. In an IPO exercise, the fund raising potential

is way beyond the amount that the company can raise via financial institutions.

Low funding cost

Comparing to funding raising via financial institutions (debt funding), where the cost of

financing is high, and there could be requirements to place collaterals and guarantees for the

financing, the company may be able to raise funding at a much cheaper rates, and without

collaterals through the IPO exercise.

Unlock potential of the company

As a private owned company, the value attached to the company is always limited because

there is no equivalent open market price for this company. Therefore, by going for IPO,

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 the company will need to go through a series of financial, operational and legal due

diligence by third party professionals to uncover the full potential of the company. Once the

value is endorsed by these professionals, the company is able to unlock its value many times

over that of the privately owned company.

Branding

Being a public listed company has advantages over many private owned company, where

they can have access to bigger and more attractive business potentials. Also, financial

institutions and business partners will see them are more credible. Therefore, once the

company goes through a successful IPO, the company is deemed to be a “big boy” in its

industry, and being a brand in its own right.

Succession planning

There are cases where the founders of the company intends to pass on the business to their

next generation, but probably unsure if the next generation has interest in their business.

Therefore, they would bring the company IPO, and have their family members holding

shares of the company. This gives flexibility to the family members to decide whether to

retain the shareholding and take over the management of the business, or to sell of their

shares for funds to invest or start their own business ventures.

An initial public offering (IPO) is the first sale of stock by a company. Small companies
looking to further the growth of their company often use an IPO as a way to generate
the capital needed to expand. Although further expansion is a benefit to the company, there
are both advantages and disadvantages that arise when a company goes public.
There are many advantages for a company going public. As said earlier, the financial benefit
in the form of raising capital is the most distinct advantage. Capital can be used to
fund research and development, fund capital expenditure or even used to pay off existing
debt. Another advantage is an increased public awareness of the company because IPOs
often generate publicity by making their products known to a new group of potential
customers.

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Subsequently this may lead to an increase in market share for the company. An IPO also
may be used by founding individuals as an exit strategy. Many venture capitalists have used
IPOs to cash in on successful companies that they helped start-up.
Even with the benefits of an IPO, public companies often face many new challenges as well.
One of the most important changes is the need for added disclosure for investors. Public
companies are regulated by the Securities Exchange Act of 1934 in regard to periodic
financial reporting, which may be difficult for newer public companies. They must also
meet other rules and regulations that are monitored by the Securities and Exchange
Commission (SEC). More importantly, especially for smaller companies, is the cost of
complying with regulatory requirements can be very high. These costs have only increased
with the advent of the Sarbanes-Oxley Act. Some of the additional costs include the
generation of financial reporting documents, audit fees, investor relation departments and
accounting oversight committees.
Public companies also are faced with the added pressure of the market which may cause
them to focus more on short-term results rather than long-term growth. The actions of the
company's management also become increasingly scrutinized as investors constantly look
for rising profits. This may lead management to perform somewhat questionable practices in
order to boost earnings.
Before deciding whether or not to go public, companies must evaluate all of the potential
advantages and disadvantages that will arise. This usually will happen during
the underwriting process as the company works with an investment bank to weigh the pros
and cons of a public offering and determine if it is in the best interest of the company.

CLASSIFICATION OF ISSUES

IPO
An Initial Public Offer (IPO) is the selling of securities to the public in the primary
market. It is when an unlisted company makes either a fresh issue of securities or an
offer for sale of its existing securities or both for the first time to the public. This paves
way for listing and trading of issuer’s securities. The sale of securities can be through
book building or normal public issue.

4
Secondary Offerings
• Secondary Offerings are issued by companies or corporate bodies whose shares are
already being traded in the capital market and they are issuing fresh shares either to
fund the expansion of their existing business or to invest into other business
activities.

Reasons for Going Public

• Raising funds to finance capital expenditure programs like expansion,

diversification, modernization, etc.
• Financing of increased working capital requirements
• Financing acquisitions like a manufacturing unit, brand acquisitions, tender offers
for shares of another firm, etc.
• Debt Refinancing
• Exit Route for Existing Investors

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OBJECTIVES OF THE STUDY

 The project aims to study the functioning of primary markets in India and the role of
SEBI.
 To understand the procedure of IPO for companies going public.
 To study the advantages and disadvantages of going public.
 To study the performance of IPOs.
 To do an in-depth study of the top IPOs in the last five year (2015-2019)
 To analyze the upcoming IPOs.

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SCOPE OF THE STUDY

The study covers the Primary Markets with IPOs in particular. The study attempts to study
the advantages and disadvantages of IPOs. The study collects most of the information from
different secondary resources apart from primary information by discussing with different
managers and customers who do online trading. The study covers only the IPOs in India.
The study attempts to study the IPOs that have come up in the last few years and the IPOs
that are expected to come up in the next one year.

NEED OF THE STUDY

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Different investment avenues are available to investors. Stock market also offers good
investment opportunities to the investor alike all investments, they also carry certain risks.
The investor should compare the risk and expected yields after adjustment off tax on various
instruments, while talking investment decision the investor may seek advice from experts
and consultancy include stock brokers and analysts while making investment decisions.

The objective is to make the investor aware of the primary markets with special reference to
Initial Public Offerings. The objective is to help the investor in selecting the appropriate
initial public offerings in order to attain maximum return and to construct the portfolio.

The investor should decide how best to reach the goals from the securities available. To
identity investor objective constraints and performance, which help to formulate the
investment policy? The development and improvement strategies in the investment policy
are formulated. They will help the investors in selection of asset classes and securities in
each class depending upon their real attributes.

RESEARCH METHODOLGY

8
 Data collection is an actively in marketing research. The design of the data
collection method is the spine of research design. The sources of data are classified in to two
types.
 The Primary Data.

 The Secondary Data.

PRIMARY DATA:
The primary data are fresh data collected directly from the field and therefore consist
of original information gathered for the specific purpose. It is expensive, laborious, and time
consuming. But it assures a greater degree of accuracy and reliability as it comes straight
from the horse’s month.

SECONDARY DATA:
The secondary data are the data, which the investigator borrows from other who
have collected it for various other purposes. Therefore it may not entirely be reliable. It is
less expensive and involves less expensive and involves less time and labor than the
collection of primary data.

The Sources of collecting Data:

I. Reports and publication of Government department and international bodies.

II. Newspaper, magazines, trade journals.

III. Publication of books company records, brochures, catalogues and other documents.

IV. Data related by statistical organization.

LIMITATIONS OF THE STUDY

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 The study is limited to Initial public Offerings in India.

 The study was carried out for a period of 45 days and due to paucity of time an in-
depth study was not possible.

 The IPO market is a dynamic one. Therefore data related to last few months was
only considered and interpreted.

 Secondary information may not be authentic.

10
 CHAPTER - II

REVIEW LITERATUERE

11
The primary market is that part of the capital markets that deals with the issuance of new
securities. Companies, governments or public sector institutions can obtain funding through
the sale of a new stock or bond issue. This is typically done through a syndicate of securities
dealers. The process of selling new issues to investors is called underwriting. In the case of
a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission
that is built into the price of the security offering, though it can be found in the prospectus.
Primary market creates long term instruments through which corporate entities borrow from
capital market.

Features of primary markets are:

 This is the market for new long term equity capital. The primary market is the
market where the securities are sold for the first time. Therefore it is also called the
new issue market (NIM).
 In a primary issue, the securities are issued by the company directly to investors.
 The company receives the money and issues new security certificates to the
investors.
 Primary issues are used by companies for the purpose of setting up new business or
for expanding or modernizing the existing business.
 The primary market performs the crucial function of facilitating capital formation in
the economy.
 The new issue market does not include certain other sources of new long term
external finance, such as loans from financial institutions. Borrowers in the new
issue market may be raising capital for converting private capital into public capital;
this is known as "going public."
 The financial assets sold can only be redeemed by the original holder.

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Methods of issuing securities in the primary market are:

 Initial public offering;

 Rights issue (for existing companies);
 Preferential issue.

Classification of Issues

13
IPO
An Initial Public Offer (IPO) is the selling of securities to the public in the primary market.
It is when an unlisted company makes either a fresh issue of securities or an offer for sale of
its existing securities or both for the first time to the public. This paves way for listing and
trading of issuer’s securities. The sale of securities can be through book building or normal
public issue.

FPO
Follow on Public Offering are issued by companies or corporate bodies whose shares are
already being traded in the capital market and they are issuing fresh shares either to fund the
expansion of their existing business or to invest into other business activities.

Reasons for Going Public

 Raising funds to finance capital expenditure programs like expansion,

diversification, modernization, etc.
 Financing of increased working capital requirements
 Financing acquisitions like a manufacturing unit, brand acquisitions, tender offers
for shares of another firm, etc.
 Debt Refinancing
 Exit Route for Existing Investors

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Advantages of Going Public

 Facilitates future funding by means of subsequent public offerings

 Enables valuation of company
 Provides liquidity to existing shares
 Increases the visibility and reputation of the company
 Commands better pricing than placement with few investors
 Enables the company to offer its shares as purchase consideration or as an exchange
for the shares of another company

Disadvantages of Going Public

 Dilution of Stake makes co vulnerable to future takeovers

 Involves substantial Expenses
 Need to make continuous disclosures
 Increased regulatory monitoring
 Listing fees and Documentations
 Cost of maintaining Investor relations
 Takes substantial amount of management time and efforts

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REGULATORY FRAMEWORK FOR IPOS
Eligibility Conditions for Companies Issuing Securities
The companies issuing securities offered through an offer document shall satisfy the
following at the time of filing the draft offer document with SEBI and also at the time of filing
the final offer document with the Registrar of Companies/ Designated Stock Exchange:
 Filing of offer document
No issuer company shall make any public issue of securities, unless a draft
Prospectus has been filed with the Board through a Merchant Banker, at least 30
days prior to the filing of the Prospectus with the Registrar of Companies (ROC):
Provided that if the Board specifies changes or issues observations on the
draft Prospectus (without being under any obligation to do so), the issuer company
or the Lead Manager to the Issue shall carry out such changes in the draft
Prospectus or comply with the observation issued by the Board before filing the
Prospectus with ROC.

 Companies barred not to issue security

No company shall make an issue of securities if the company has been
prohibited from accessing the capital market under any order or direction passed by
the Board.

 Application for listing

No company shall make any public issue of securities unless it has made an
application for listing of those securities in the stock exchange

 Issue of securities in dematerialized form

No company shall make public or rights issue or an offer for sale of
securities, unless:
a. The company enters into an agreement with a depository for
dematerialization of securities already issued or proposed to be issued
to the public or existing shareholders; and

16
 b. The company gives an option to subscribers/ shareholders/ investors
to receive the security certificates or hold securities in
dematerialized form with a depository.

 IPO Grading
No unlisted company shall make an IPO of equity shares unless the
following conditions are satisfied as on the date of filing of Prospectus with ROC:
a. the unlisted company has obtained grading for the IPO from at least
one credit rating agency
b. Disclosures of all the grades obtained, along with the rationale/
description furnished by the credit rating agency(ies) for each of the
grades obtained.

Eligibility Norms for IPO

An unlisted company may make an initial public offering (IPO) of equity shares only if :-

 The company has net tangible assets of at least Rs. 3 crores in each of the preceding
3 full years (of 12 months each), of which not more than 50% is held in monetary
assets.
 The company has a track record of distributable profits in terms of Section 205 of
the Companies Act, 1956, for at least three (3) out of immediately preceding five (5)
years.
 The company has a net worth of at least Rs. 1 crore in each of the preceding 3 full
years (of 12 months each).
 In case the company has changed its name within the last one year, atleast 50% of
the revenue for the preceding 1 full year is earned by the company from the activity
suggested by the new name.
 The aggregate of the proposed issue and all previous issues made in the same
financial year in terms of size (i.e., offer through offer document + firm allotment +
promoters’ contribution through the offer document), does not exceed five (5) times
its pre-issue net worth as per the audited balance sheet of the last financial year.

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PROCEDURE FOR IPOS

Fixed Pricing versus True Pricing (Book- Building)

The traditional method of doing IPOs is the fixed price offering. Here, the issuer and the
merchant banker agree on an “issue price”. Then the investor has a choice of filling in an
application form at this price and subscribing to the issue. Extensive research has revealed
that the fixed price offering is a poor way of doing IPOs. Fixed price offerings, all over the
world, suffer from `IPO underpricing'. In India, on average, the fixed-price seems to be
around 50% below the price at first listing; i.e. the issuer obtains 50% lower issue proceeds
as compared to what might have been the case. This average masks a steady stream of
dubious IPOs who get an issue price which is much higher than the price at first listing.
Hence fixed price offerings are weak in two directions:
 dubious issues get overpriced and
 Good issues get underpriced.

BOOK-BUILDING

A mechanism where, during period for which the IPO is open, bids are collected from
investors at various prices which are above or equal to the floor price (the minimum price).
The final price of the share is determined after the bid closing date, based on certain
evaluation criteria.

The SEBI (Disclosure and Investor Protection) Guidelines, 2000, define the term `book-
building' in a rather complex language as "a process undertaken by which a demand for the
securities proposed to be issued by a body corporate is elicited and built-up and the price for
such securities is assessed for determination of the quantum of such securities to be issued
by means of a notice, circular, advertisement, document or information memoranda or offer
document.''

Book building process is a common practice used in most developed countries for marketing
a public offer of equity shares of a company. However, Book building acts as scientific as
well as flexible price discovery method through which a consensus price of IPO’s may be
determined by the issuer company along with the Book Running Lead Manager (i.e.

18
merchant banker) on the basis of feedback received from individual investors as well as
most informed investors (who are institutional and corporate investors like, UTI, LICI,
GICI, FIIs, and SFCI etc). The method helps to make a correct evaluation of a company’s
potential and the price of its shares.

Book-Building Process

ISSUER

BOOK RUNNING
LEAD MANAGERS

UNDERWRITERS
MUTUAL FUNDS MERCHANT BANKERS STOCK BROKERS

INVESTORS

MFs Financial Foreign Financial NRIs Corporations HNIs Retail Investors

Institutions Institutions

In simple terms, book-building is a mechanism by which the issue price is discovered on

the basis of bids received from syndicate members/brokers and not by the issuers/merchant
bankers.

An Issuer Company can issue capital through book building in following two ways:
75% Book Building process

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 –
Under this type of public offer, the issue of securities has to be categorized into:

 Placement portion category

 Net offer to the public

The option of 75% Book Building is available to all body corporate that are otherwise
eligible to make an issue of capital to the public. The securities issued through the book
building process are indicated as 'placement portion category' and securities available to
public are identified as 'net offer to public'. In this option, underwriting is mandatory to the
extent of the net offer to the public. The issue price for the placement portion and offers to
public are required to be same

100% of the net offer to the public through Book Building process - In the 100% of the
net offer to the public, entire issue is made through Book Building process. However, there
can be a reservation or firm allotment to a maximum of 5% of the issue size for the
permanent employees, shareholders of the company or group companies, persons who, on
the date of filing of the draft offer document with the Board, have business association, as
depositors, bondholders and subscribers to services, with the issuer making an initial public
offering.

The number of bidding centers, in case of 75% book building process should not be less
than the number of mandatory collection centers specified by SEBI. In case of 100% book
building process, the bidding centers should be at all the places where the recognized stock
exchanges are situated.

Book Building Process in India

The steps which are usually followed in the book building process can be summarized
below:

The issuer company proposing an IPO appoints a lead merchant banker as a BRLM.`

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(2) Initially, the issuer company consults with the BRLM in drawing up a draft
prospectus (i.e. offer document) which does not mention the price of the issues, but includes
other details about the size of the issue, past history of the company, and a price band. The
securities available to the public are separately identified as “net offer to the public”.

(3) The draft prospectus is filed with SEBI which gives it a legal standing.

(4) A definite period is fixed as the bid period and BRLM conducts awareness
campaigns like advertisement, road shows etc.

(5) The BRLM appoints a syndicate member, a SEBI registered intermediary to underwrite
the issues to the extent of “net offer to the public”.

(6) The BRLM is entitled to remuneration for conducting the Book Building process.

(7) The copy of the draft prospectus may be circulated by the BRLM to the institutional
investors as well as to the syndicate members.

(8) The syndicate members create demand and ask each investor for the number of
shares and the offer price.

(9) The BRLM receives the feedback about the investor’s bids through syndicate
members.

(10) The prospective investors may revise their bids at any time during the bid period.

(18) The BRLM on receipts of the feedback from the syndicate members about the bid price
and the quantity of shares applied has to build up an order book showing the demand for the
shares of the company at various prices. The syndicate members must also maintain a record
book for orders received from institutional investors for subscribing to the issue out of the
placement portion.

(12) On receipts of the above information, the BRLM and the issuer company determine the
issue price. This is known as the market-clearing price.

(13) The BRLM then closes the book in consultation with the issuer company and determine
the issue size of (a) placement portion and (b) public offer portion.

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(14) Once the final price is determined, the allocation of securities should be made by the
BRLM based on prior commitment, investor’s quality, price aggression, earliness of bids
etc. The bid of an institutional bidder, even if he has paid full amount may be rejected
without being assigned any reason as the Book Building portion of institutional investors is
left entirely at the discretion of the issuer company and the BRLM.

(15) The Final prospectus is filed with the registrar of companies within 2 days of
determination of issue price and receipts of acknowledgement card from SEBI.

(16) Two different accounts for collection of application money, one for the private
placement portion and the other for the public subscription should be opened by the issuer
company.

(17) The placement portion is closed a day before the opening of the public issue through
fixed price method. The BRLM is required to have the application forms along with the
application money from the institutional buyers and the underwriters to the private
placement portion.

(18) The allotment for the private placement portion shall be made on the 2 nd day from the
closure of the issue and the private placement portion is ready to be listed.

(19) The allotment and listing of issues under the public portion (i.e. fixed price portion)
must be as per the existing statutory requirements.

(20) Finally, the SEBI has the right to inspect such records and books which are maintained
by the BRLM and other intermediaries involved in the Book Building process

Pricing

Before establishment of SEBI in 1992, the quality of disclosures in the offer documents was
very poor.
The main drawback of free pricing was the process of pricing of issues. The issue price was
determined around 60-70 days before the opening of the issue and the issuer had no clear
idea about the market perception of the price determined.

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In Book Building the price is determined on the basis of demand received or at price above
or equal to the floor price.

The Allotment Process through Book-building:

Step1-The Company will 'discover' its price

Earlier, the company determined a fixed price for the stock issue. The issue was marketed to
the general public through advertisements and a media campaign.
Today, companies prefer a book building process. Book building is the process of price
discovery. That means there is no fixed price for the share. Instead, the company issuing the
shares comes up with a price band. The lowest price is referred to as the floor and the
highest, the cap. Bids are then invited for the shares. Each investor states how many shares
s/he wants and what s/he is willing to pay for those shares (depending on the price band).
The actual price is then discovered based on these bids.

Step2-Players of the game

Three classes of investors can bid for the shares:

 Qualified Institutional Buyers: QIBs include mutual funds and Foreign Institutional
Investors. At least 50% of the shares are reserved for this category.
 Retail investors: Anyone who bids for shares under Rs 50,000 is a retail investor. At
least 25% is reserved for this category.
 The balance bids are offered to high networth individuals and employees of the
company.

Individuals who apply for the IPO put in their bids.

The process is transparent. One can check on the issue subscription at the BSE and
NSE Web sites.
After evaluating the bid prices, the company will accept the lowest price that will allow
it to dispose the entire block of shares. That is called the cut-off price.

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Reverse Book Building

Reverse book-building is a mechanism by which companies listed on a stock exchange can

delist their shares. The reasons for delisting may be several and sometimes intentional.

The reverse book building is an efficient price discovery mechanism of de-listing of

securities, which is provided for capturing the sell orders on online basis from the
shareholders through respective BRLM. In the reverse book-building scenario, the acquirer
or promoter of a company offers to get back shares from the shareholders. It is a mechanism
where, during the period for which the reverse book building is open, offers are collected at
various prices, which are above or equal to the floor price from the share holders through
trading members appointed by the acquirer or promoter of a company. The reverse book
building price (i.e. final price/ exist price) is determined by BRLM in consultation with the
acquirer or promoter of the company after the offer closing date in accordance with the
SEBI (De-listing of Securities) Guidelines, 2003. which desires to get de-listed, in
accordance to book building process. The offer price has a floor price, which is fixed for de-
listing of securities below which no offer can be accepted. The floor price is the average of
26 weeks traded price quoted on the stock exchange where the shares of the company are
most frequently traded preceding 26 weeks from the date of public announcement is made.
There is no ceiling on the maximum price.

ROLE OF VARIOUS INTERMEDIARIES IN IPO

Intermediary’s help corporations design securities that will be attractive to investors, buy
these securities from the corporations, and then resell them to savers in the primary markets.

Merchant Bankers/ Lead Manager

Merchant bankers play an important role in issue management process. Lead managers have
to ensure correctness of the information furnished in the offer document. They have to
ensure compliance with SEBI rules and regulations as also Guidelines for Disclosures and
Investor Protection. To this effect, they are required to submit to SEBI a due diligence
certificate confirming that the disclosures made in the draft prospectus or letter of offer are
24
true, fair and adequate to enable the prospective investors to make a well informed
investment decision. The role of merchant bankers in performing their due diligence
functions has become even more important with the strengthening of disclosure
requirements and with SEBI giving up the vetting of prospectuses. Their functions are:

 To act as intermediaries between the company seeking to raise money and the
investors. They must possess a valid registration from SEBI enabling them to do this
job.
 They are responsible for complying with the formalities of an issue, like drawing up
the prospectus and marketing the issue.
 If it is a book building process, the lead manager is also in charge of it. In such a
case, they are also called Book Running Lead Managers.
 Post issue activities, like intimation of allotments and refunds, are their
responsibility as well.

Underwriters

Underwriters are required to register with SEBI in terms of the SEBI (Underwriters) Rules
and Regulations, 1993. In addition to underwriters registered with SEBI in terms of these
regulations, all registered merchant bankers in categories I, II and III and stockbrokers and
mutual funds registered with SEBI can function as underwriters. Part III gives further details
of registration of underwriters. In 1996-97, the SEBI (Underwriters) Regulations, 1993 were
amended mainly pertaining to some procedural matters.

Bankers to an Issue

Scheduled banks acting as bankers to an issue are required to be registered with SEBI in
terms of the SEBI (Bankers to the Issue) Rules and Regulations, 1994. These regulations lay
down eligibility criteria for bankers to an issue and require registrants to meet periodic
reporting requirements. Part III gives further details of registration of bankers to an issue.

25
Portfolio managers

Portfolio managers are required to register with SEBI in terms of the SEBI (Portfolio
Managers) Rules and Regulations, 1993. The registered portfolio managers exclusively
carry on portfolio management activities. In addition all merchant bankers in categories I
and II can act as portfolio managers with prior permission from SEBI. Part III gives further
details of the registration of portfolio managers.

Registrars to an Issue and Share Transfer Agents

Registrars to an issue (RTI) and share transfer agents (STA) are registered with SEBI in
terms of the SEBI (Registrar to the Issue and Share Transfer Agent) Rules and Regulations,
1993. Under these regulations, registration commenced in 1993-94 and is granted under two
categories: category I - to act as both registrar to the issue and share transfer agent and
category II - to act as either registrar to an issue or share transfer agent. With the setting up
of the depository and the expansion of the network of depositories, the traditional work of
registrars is likely to undergo a change.

IPO Grading

IPO grading (initial public offering grading) is a service aimed at facilitating the
assessment of equity issues offered to public. The grade assigned to any individual issue
represents a relative assessment of the ‘fundamentals’ of that issue in relation to the other
listed equity securities in India. IPO grading is positioned as a service that provides ‘an
independent assessment of fundamentals’ to aid comparative assessment that would prove
useful as an information and investment tool for investors. Moreover, such a service would
be particularly useful for assessing the offerings of companies accessing the equity markets
for the first time where there is no track record of their market performance.

IPO grade assigned to any issue represents a relative assessment of the ‘fundamentals’ of
that issue in relation to the universe of other listed equity securities in India. This grading
can be used by the investor as tool to make investment decision. The IPO grading will help
the investor better appreciate the meaning of the disclosures in the issue documents to the

26
extent that they affect the issue’s fundamentals. Thus, IPO grading is an additional investor
information and investment guidance tool.

Credit Rating agencies (CRAs) like ICRA, CRISIL, CARE and Fitch Ratings who are
registered with SEBI will carry out IPO grading. SEBI does not play any role in the
assessment made by the grading agency. The grading is intended to be an independent and
unbiased opinion of that agency. IPO grading is not mandatory but is optional and the
assigned grade would be a one time assessment done at the time of the IPO and meant to aid
investors who are interested in investing in the IPO. The grade will not have any ongoing
validity.

SEBI GUIDELINES ON IPO GRADING

 No unlisted company shall make an IPO of equity shares or any other security which
may be converted into or exchanged with equity shares at a later date, unless the
following conditions are satisfied as on the date of filing of Prospectus (in case of
fixed price issue) or Red Herring Prospectus (in case of book built issue) with ROC:
 The unlisted company has obtained grading for the IPO from at least one
credit rating agency;
 Disclosures of all the grades obtained, along with the rationale/description
furnished by the credit rating agency(ies) for each of the grades obtained,
have been made in the Prospectus (in case of fixed price issue) or Red
Herring Prospectus (in case of book built issue); and
 The expenses incurred for grading IPO have been borne by the unlisted
company obtaining grading for IPO.
Most of the market analysts have welcomed this move of SEBI as it will help the investors
in a volatile market to know whether the merchant banker has carried the exercise in
determining the price of an issue in a proper manner or not. It will also help the investors in
knowing whether the price of the issue is justified or not. They even said that management
of a good company will never get afraid of getting graded of their IPOs if they are good.

27
FEATURES OF IPO GRADING

IPO grading covers both internal and external aspects of a company seeking to make an IPO
in general. The internal factors include competence and effectiveness of the management,
profile of promoters, marketing strategies, size and growth of revenues, competitive edge,
technology, operating efficiency, liquidity and financial flexibility, asset quality, accounting
quality, profitability and hedging of risks. Among external factors, the key one is the
industry and economic/business environment for the issuer. Here, it is important to note that
internationally, the global rating agencies such as Standard & Poor’s and Moodys do not
perform grading of IPOs at all. While Standard & Poor’s is the majority stakeholder in
CRISIL Ltd, Moodys is the single biggest stakeholder in ICRA Ltd. Similarly, the third
global player Fitch IBCA (which acquired another rating agency Dun & Bradstreet in 2000)
also does not grade IPOs as yet. The IPO grading is indicated on a five point scale and a
higher score indicating stronger fundamentals.

An IPO grading Scale

IPO grade Assessment

5/5 Strong fundamentals

4/5 Above average fundamentals

3/5 Average fundamentals

2/5 Below average fundamentals

1/5 Poor fundamentals

Data-flow diagram showing the entire IPO-grading procedure

28
This process will ideally require 2-3 weeks for completion, so it may be a good idea for
companies to initiate the grading process about 6-8 weeks before the targeted IPO date to
provide sufficient time for any contingencies.

Cost Involved In IPO Grading

Though nothing has been declared officially but most of the credit rating has said that IPO-
grading would not cost much to the issuers. They would be charging 10 basis points of the
amount to be raised with a ceiling of about Rs 10-15 lakhs. Thus, even in the case of a mega
IPO, there would be a cap on fees, he noted. Around 100 IPOs hit the market on an average
every year. However, despite this seemingly big number, the total receipts for the entire
rating industry on account of grading fees would be only about Rs 10-15 crore.

29
Benefits of IPO Grading

There are various positive sides of an IPO grading. The most significant factors that go in
favor of IPO grading are:

(a) Professional and Independent Appraisal: IPO grading will create awareness about the
fundamentals of the company’s IPO and will provide focused company information as a key
input to prospective investors that will be helpful in taking an investment decision, in a
manner similar to what a credit rating is for debt investors.

(b) Removal of Information Burden: Where disclosures of issues are large and complex, a
service analyzing and interpreting these disclosures independently and quickly will be
extremely useful in cutting through the clutter. Thus, the usefulness of IPO grading would
be particularly high for small investors as it will serve as a guide about the company coming
out with the issue.

(c) Impediment for Weak Companies: While fundamentally sound companies will gain
from the market, companies whose fundamentals are not very strong will be impeded in
building up speculative demand among investors. Such weak companies will need to offer
pricing, which will adequately compensate investors for the risks they take. Therefore, IPO
grading provides disincentives for weak companies planning to come to the market to raise
easy capital.

(d) Improved Investors’ Sophistication: It is perceived that an independent and informed

opinion on the fundamental quality of the company will bring about greater level of investor
sophistication in a scientific manner. In fact, investors may take investment decisions in a
better way on the basis of opinion of CRAs regarding IPO grading. However, the
assessment is not a recommendation to buy or not buy a stock. It is, instead, a powerful tool
to assist the investors in making up their mind about the quality of a company proposing to
offer an IPO investment option.

30
 SEBI GUIDELINES FOR IPOS

1. IPOs of small companies

Public issue of less than five crores has to be through OTCEI and separate guidelines
apply for floating and listing of these issues.

2. Size of the Public Issue

Issue of shares to general public cannot be less than 25% of the total issue, incase of
information technology, media and telecommunication sectors this stipulation is reduced
subject to the conditions that:

 Offer to the public is not less than 10% of the securities issued.
 A minimum number of 20 lakh securities is offered to the public and
 Size of the net offer to the public is not less than Rs. 30 crores.

3. Promoter Contribution

 Promoters should bring in their contribution including premium fully before the
issue
 Minimum Promoters contribution is 20-25% of the public issue.
 Minimum Lock in period for promoters contribution is five years
 Minimum lock in period for firm allotments is three years.

4. Collection centers for receiving applications

 There should be at least 30 mandatory collection centers, which should include

invariably the places where stock exchanges have been established.
 For issues not exceeding Rs.10 crores (including premium, if any), the collection
centres shall be situated at:-


31
  the four metropolitan centres viz. Bombay, Delhi, Calcutta, Madras; and at all
such centres where stock exchanges are located in the region in which the
registered office of the company is situated.

5. Regarding allotment of shares

 Net Offer to the General Public has to be at least 25% of the Total Issue Size for
listing on a Stock exchange.
 It is mandatory for a company to get its shares listed at the regional stock exchange
where the registered office of the issuer is located.
 In an Issue of more than Rs. 25 crores the issuer is allowed to place the whole issue
by book-building
 Minimum of 50% of the Net offer to the Public has to be reserved for Investors
applying for less than 1000 shares.
 There should be atleast 5 investors for every 1 lakh of equity offered (not applicable
to infrastructure companies).
 Quoting of Permanent Account Number or GIR No. in application for allotment of
securities is compulsory where monetary value of Investment is Rs.50,000/- or
above.
 Indian development financial institutions and Mutual Fund can be allotted securities
upto 75% of the Issue Amount.
 A Venture Capital Fund shall not be entitled to get its securities listed on any stock
exchange till the expiry of 3 years from the date of issuance of securities.
 Allotment to categories of FIIs and NRIs/OCBs is upto a maximum of 24%, which
can be further extended to 30% by an application to the RBI - supported by a
resolution passed in the General Meeting.

6. Timeframes for the Issue and Post- Issue formalities

 The minimum period for which a public issue has to be kept open is 3 working days
and the maximum for which it can be kept open is 10 working days. The minimum
period for a rights issue is 15 working days and the maximum is 60 working days.
 A public issue is effected if the issue is able to procure 90% of the Total issue size
within 60 days from the date of earliest closure of the Public Issue. In case of over-

32
  subscription the company may have the right to retain the excess application money
and allot shares more than the proposed issue, which is referred to as the ‘green-
shoe’ option.
 A rights issue has to procure 90% subscription in 60 days of the opening of the
issue.
 Allotment has to be made within 30 days of the closure of the Public Issue and 42
days in case of a Rights issue.
 All the listing formalities for a public Issue has to be completed within 70 days from
the date of closure of the subscription list.

7. Dispatch of Refund Orders

 Refund orders have to be dispatched within 30 days of the closure of the Public
Issue.
 Refunds of excess application money i.e. for un-allotted shares have to be made
within 30 days of the closure of the Public Issue.

8. Other regulations pertaining to IPO

 Underwriting is not mandatory but 90% subscription is mandatory for each issue of
capital to public unless it is disinvestment in which case it is not applicable.
 If the issue is undersubscribed then the collected amount should be returned back
(not valid for disinvestment issues).
 If the issue size is more than Rs. 500 crores voluntary disclosures should be made
regarding the deployment of the funds and an adequate monitoring mechanism to be
put in place to ensure compliance.
 There should not be any outstanding warrants or financial instruments of any other
nature, at the time of initial public offer.
 In the event of the initial public offer being at a premium, and if the rights under
warrants or other instruments have been exercised within the twelve months prior to
such offer, the resultant shares will not be taken into account for reckoning the
minimum promoter's contribution and further, the same will also be subject to lock-
in.
 Code of advertisement specified by SEBI should be adhered to.

33
  Draft prospectus submitted to SEBI should also be submitted simultaneously to all
stock exchanges where it is proposed to be listed.

9. Restrictions on other allotments

 Firm allotments to mutual funds, FIIs and employees not subject to any lock-in
period.
 Within twelve months of the public/rights issue no bonus issue should be made.
 Maximum percentage of shares, which can be distributed to employees cannot be
more than 5% and maximum shares to be allotted to each employee cannot be more
than 200.

10. Relaxations to public issues by infrastructure companies.

These relaxations would be applicable to Infrastructure Companies as defined under
Section 10(23G) of the Income Tax Act, 1961, provided their projects are appraised by any
Developmental Financial Institution (DFI) or IDFC or IL&FS. The projects must also have
a participation of at least 5% of the project cost (in debt and/or equity) by the appraising
institution.

 The infrastructure companies will be exempted from the requirement of making a

minimum public offer of 25 per cent of its securities.
 The requirement of 5 shareholders per Rs. 1 lakh of offer is also waived in case of
offerings by infrastructure companies.
 For public issues by infrastructure companies, minimum subscription of 90% would
no longer be mandatory provided disclosure is made about the alternate source of
funding which the company has considered, in the event of under subscription in the
public issue.
 Infrastructure companies are permitted to freely price the offerings in the domestic
market provided that the promoter companies along with Equipment Suppliers and
other strategic investors subscribe to 50% of the equity at the same or a higher price
than what is being offered to the public. Adequate disclosures about the justification
for the pricing will be required to be made in the offer documents.

34
 The Infrastructure Companies would be allowed to keep their issues open for 21
days. The relaxation would give infrastructure companies sufficient time to mobilise
funds for their issues.
 Infrastructure Companies would not be required to create and maintain a Debenture
Redemption Reserve (DRR) in case of Debenture Issues.

35
 CHAPTER – III

INDUSTRY PROFILE

36
Introduction To The Capital Market

The capital market is the market for securities, where companies and the
government can raise long term funds. The capital market includes the stock market and the
bond market. Financial regulators ensure that investors are protected against fraud. The
capital markets consist of the primary market, where new issues are distributed to investors,
and the secondary market, where existing securities are traded.

Capital market thus plays a vital role in channelizing the savings of individuals for
Investment in the economic development of the country. As a result the investors are not
constrained by their individual abilities, but by the abilities of the companies, which in turn
enhance the savings and investments in the country, liquidity of capital market is an
important factor affecting growth.

Since projects require long term finance, but on the other hand, the investor may not like to
relinquish control over their savings for a long time. A liquid stock market ensures a quick
exit without incurring heavy losses or costs. Thus development of efficient market system is
necessary for creating conductive climate for investment and economic growth.

Capital Market Segment – Primary and Secondary

Broadly , the comprises of two segments – the new issue market which is commonly
known as primary market and the stock market which is known as secondary market.

37
Primary

A primary offering, such as with a corporate bond, means you are buying it
directly from the issuer, at par value, usually. A secondary market is where you sell or buy
existing issues. I.E. If you bought a bond last year, now need to get your principal, you can
sell it in the secondary market. You may not get par value. If rates are up since you bought
the bond, then you will likely have to sell it at a discount to be able to get rid of it. If rates
have fallen since you bought it, you could get a premium for it.

Secondary

The market where securities are traded after they azre initially offered in the primary
market. Most trading is done in the secondary market. To explain further, it is trading in
previously issued financial instruments. An organized market for used securities. Bombay
Stock Exchange (BSE), National Stock Exchange NSE, bond markets, over-the-counter
markets, residential mortgage loans, governmental guaranteed loans etc

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.

38
BRIEF ABOUT THE STOCK EXCHANGES

Stock Exchange is a market like any other centralized market where both buyers and
sellers come and conduct their business of purchase and sale of shares & securities. In other
words, it is a market place for shares and securities where trading takes place in a controlled
and protected environment.

MEANING OF STOCK EXCHANGE

A stock exchange, share market or bourse is a corporation or mutual organization

which provides "trading" facilities for stock brokers and traders, to trade stocks and other
securities. Stock exchanges also provide facilities for the issue and redemption of securities
as well as other financial instruments and capital events including the payment of income
and dividends. The securities traded on a stock exchange include: shares issued by
companies, unit trusts and other pooled investment products and bonds. To be able to trade a
security on a certain stock exchange, it has to be listed there. Usually there is a central
location at least for recordkeeping, but trade is less and less linked to such a physical place,
as modern markets are electronic networks, which gives them advantages of speed and cost
of transactions. Trade on an exchange is by members only. The initial offering of stocks and
bonds to investors is by definition done in the primary market and subsequent trading is
done in the secondary market. A stock exchange is often the most important component of a
stock market. Supply and demand in stock markets is driven by various factors which, as in
all free markets, affect the price of stocks (see stock valuation).
There is usually no compulsion to issue stock via the stock exchange itself, nor must
stock be subsequently traded on the exchange. Such trading is said to be off exchange or
over-the-counter. This is the usual way that bonds are traded. Increasingly, stock exchanges
are part of a global market for securities.

39
Functions of Stock Exchange

Stock exchange is established into the main purpose of providing a market place for
the members to deal in securities under well laid down regulations and to protect the interest
of the investors. The main functions of stock exchange are

 It brings the companies and investors together so that the investors can put risk capital
into companies and thus, companies can use the capital.
 It provides an orderly regulated market for securities.
 It provides continuous, ready and open market for selling and buying securities.
 It promotes savings and investment in the economy by attracting funds from the
investors.
 It facilitates take overs by means of acquiring majority of shares traded on the stock
market.
 It acts as a clearing house of business information.
 It motivates the managers of well reputed companies, to retain their shares in ‘A’ group,
to improve performance.
 It induces the managers to improve performance for converting non-specified shares into
specified shares in the exchange.
 It enables the investors to evaluate the net worth of their holdings.
 It also allows the companies to float their shares in the market.

40
FINANCIAL MARKET REGULATIONS

Regulations are an absolute necessity in the face of the growing importance of capital

markets throughout the world. The development of a market economy is dependent on the

development of the capital market. The regulation of a capital market involves the

regulation of securities; these rules enable the capital market to function more efficiently

and impartially. A well regulated market has the potential to encourage additional investors

to partake, and contribute in, furthering the development of the economy. The chief capital

market regulatory authority is Securities and Exchange Board of India (SEBI).

SEBI is the regulator for the securities market in India. It is the apex body to develop and

regulate the stock market in India It was formed officially by the Government of India in

1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI is headquartered in

the popular business district of Bandra-Kurla complex in Mumbai, and has Northern,

Eastern, Southern and Western regional offices in New Delhi, Kolkata, Chennai and

Ahmedabad. In place of Government Control, a statutory and autonomous regulatory board

with defined responsibilities, to cover both development & regulation of the market, and

independent powers has been set up.

The basic objectives of the Board were identified as:

 to protect the interests of investors in securities;

 to promote the development of Securities Market;
 to regulate the securities market and
 For matters connected therewith or incidental thereto.

41
Since its inception SEBI has been working targeting the securities and is attending to the

fulfillment of its objectives with commendable zeal and dexterity. The improvements in the

securities markets like capitalization requirements, margining, establishment of clearing

corporations etc. reduced the risk of credit and also reduced the market.

SEBI has introduced the comprehensive regulatory measures, prescribed registration norms,

the eligibility criteria, the code of obligations and the code of conduct for different

intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers, registrars,

portfolio managers, credit rating agencies, underwriters and others. It has framed bye-laws,

risk identification and risk management systems for Clearing houses of stock exchanges,

surveillance system etc. which has made dealing in securities both safe and transparent to

the end investor.

Another significant event is the approval of trading in stock indices (like S&P CNX Nifty &

Sensex) in 2000. A market Index is a convenient and effective product because of the

following reasons:

 It acts as a barometer for market behavior;

 It is used to benchmark portfolio performance;

 It is used in derivative instruments like index futures and index options;

 It can be used for passive fund management as in case of Index Funds.

Two broad approaches of SEBI is to integrate the securities market at the national level, and

also to diversify the trading products, so that there is an increase in number of traders

including banks, financial institutions, insurance companies, mutual funds, primary dealers

42
etc. to transact through the Exchanges. In this context the introduction of derivatives trading

through Indian Stock Exchanges permitted by SEBI in 2000 AD is a real landmark.

SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and

successively (e.g. the quick movement towards making the markets electronic and paperless

rolling settlement on T+2 bases). SEBI has been active in setting up the regulations as

required under law.

STOCK EXCHANGES IN INDIA

Stock Exchanges are an organized marketplace, either corporation or mutual organization,

where members of the organization gather to trade company stocks or other securities. The

members may act either as agents for their customers, or as principals for their own

accounts.

As per the Securities Contracts Regulation Act, 1956 a stock exchange is an association,

organization or body of individuals whether incorporated or not, established for the purpose

of assisting, regulating and controlling business in buying, selling and dealing in securities.

Stock exchanges facilitate for the issue and redemption of securities and other financial

instruments including the payment of income and dividends. The record keeping is central

but trade is linked to such physical place because modern markets are computerized. The

trade on an exchange is only by members and stock broker do have a seat on the exchange.

43
 BOMBAY STOCK EXCHANGE

A very common name for all traders in the stock market, BSE, stands for Bombay Stock

Exchange. It is the oldest market not only in the country, but also in Asia. In the early days,

BSE was known as "The Native Share & Stock Brokers Association." It was established in

the year 1875 and became the first stock exchange in the country to be recognized by the

government. In 1956, BSE obtained a permanent recognition from the Government of India

under the Securities Contracts (Regulation) Act, 1956.

In the past and even now, it plays a pivotal role in the development of the country's capital

market. This is recognized worldwide and its index, SENSEX, is also tracked worldwide.

Earlier it was an Association of Persons (AOP), but now it is a demutualised and

corporatized entity incorporated under the provisions of the Companies Act, 1956, pursuant

to the BSE (Corporatization and Demutualization) Scheme, 2005 notified by the Securities

and Exchange Board of India (SEBI).

BSE Vision

The vision of the Bombay Stock Exchange is to "Emerge as the premier Indian stock

exchange by establishing global benchmarks."

BSE Management

Bombay Stock Exchange is managed professionally by Board of Directors. It comprises of

eminent professionals, representatives of Trading Members and the Managing Director. The

Board is an inclusive one and is shaped to benefit from the market intermediaries

participation. The Board exercises complete control and formulates larger policy issues. The

day-to-day operations of BSE are managed by the Managing Director and its school of

professional as a management team.

44
BSE Network

The Exchange reaches physically to 417 cities and towns in the country. The framework of

it has been designed to safeguard market integrity and to operate with transparency. It

provides an efficient market for the trading in equity, debt instruments and derivatives. Its

online trading system, popularly known as BOLT, is a proprietary system and it is BS 7799-

2-2002 certified. The BOLT network was expanded, nationwide, in 1997. The surveillance

and clearing & settlement functions of the Exchange are ISO 9001:2000 certified.

BSE Facts

BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the

benchmark equity index that reflects the robustness of the economy and finance. It was the –

 First in India to introduce Equity Derivatives

 First in India to launch a Free Float Index

 First in India to launch US$ version of BSE Sensex

 First in India to launch Exchange Enabled Internet Trading Platform

 First in India to obtain ISO certification for Surveillance, Clearing & Settlement

 'BSE On-Line Trading System’ (BOLT) has been awarded the globally

recognized the Information Security Management System standard

BS7799-2:2002.

 First to have an exclusive facility for financial training

 Moved from Open Outcry to Electronic Trading within just 50 days

BSE with its long history of capital market development is fully geared to continue its

contributions to further the growth of the securities markets of the country, thus helping

India increases its sphere of influence in international financial markets.

45
NATIONAL STOCK EXCHANGE OF INDIA LIMITED

The National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchanges, which recommended

promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to

investors from all across the country on an equal footing. Based on the recommendations,

NSE was promoted by leading Financial Institutions at the behest of the Government of

India and was incorporated in November 1992 as a tax-paying company unlike other stock

Exchange in the country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act,

1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)

segment in June 1994. The Capital Market (Equities) segment commenced operations in

November 1994 and operations in Derivatives segment commenced in June 2000.

NSE GROUP
National Securities Clearing Corporation Ltd. (NSCCL)

It is a wholly owned subsidiary, which was incorporated in August 1995 and commenced

clearing operations in April 1996. It was formed to build confidence in clearing and

settlement of securities, to promote and maintain the short and consistent settlement cycles,

to provide a counter-party risk guarantee and to operate a tight risk containment system.

NSE.IT Ltd.

It is also a wholly owned subsidiary of NSE and is its IT arm. This arm of the NSE is

uniquely positioned to provide products, services and solutions for the securities industry.

NSE.IT primarily focuses on in the area of trading, broker front-end and back-office,

clearing and settlement, web-based, insurance, etc. Along with this, it also provides

46
consultancy and implementation services in Data Warehousing, Business Continuity Plans,

Site Maintenance and Backups, Stratus Mainframe Facility Management, Real Time Market

Analysis & Financial News.

India Index Services & Products Ltd. (IISL)

It is a joint venture between NSE and CRISIL Ltd. to provide a variety of indices and index

related services and products for the Indian Capital markets. It was set up in May 1998. IISL

has a consulting and licensing agreement with the Standard and Poor's (S&P), world's

leading provider of investible equity indices, for co-branding equity indices.

National Securities Depository Ltd. (NSDL)

NSE joined hands with IDBI and UTI to promote dematerialization of securities. This step

was taken to solve problems related to trading in physical securities. It commenced

operations in November 1996.

NSE Facts

 It uses satellite communication technology to energize participation from around 400

cities in India.

 NSE can handle up to 1 million trades per day.

 It is one of the largest interactive VSAT based stock exchanges in the world.

 The NSE- network is the largest private wide area network in India and the first

extended C- Band VSAT network in the world.

 Presently more than 9000 users are trading on the real time-online NSE application.

Today, NSE is one of the largest exchanges in the world and still forging ahead. At NSE, we

are constantly working towards creating a more transparent, vibrant and innovative capital

market.

47
OVER THE COUNTER EXCHANGE OF INDIA

OTCEI was incorporated in 1990 as a section 25 company under the companies Act 1956

and is recognized as a stock exchange under section 4 of the securities Contracts Regulation

Act, 1956. The exchange was set up to aid enterprising promotes in raising finance for new

projects in a cost effective manner and to provide investors with a transparent and efficient

mode of trading Modeled along the lines of the NASDAQ market of USA, OTCEI

introduced many novel concepts to the Indian capital markets such as screen-based

nationwide trading, sponsorship of companies, market making and scrip less trading. As a

measure of success of these efforts, the Exchange today has 185 listings and has assisted in

providing capital for enterprises that have gone on to build successful brands for themselves

like VIP Advanta, Sonora Tiles & Brilliant mineral water, etc.

Need for OTCEI:

Studies by NASSCOM, software technology parks of India, the venture capitals funds and

the government’s IT tasks Force, as well as rising interest in IT, Pharmaceutical,

Biotechnology and Media shares have repeatedly emphasized the need for a national stock

market for innovation and high growth companies.

Innovative companies are critical to developing economics like India, which is undergoing a

major technological revolution. With their abilities to generate employment opportunities

and contribute to the economy, it is essential that these companies not only expand existing

operations but also set up new units. The key issue for these companies is raising timely,

cost effective and long term capital to sustain their operations and enhance growth. Such

companies, particularly those that have been in operation for a short time, are unable to raise

funds through the traditional financing methods, because they have not yet been evaluated

by the financial world.

48
EVOLUTION AND GROWTH OF INDIAN PRIMARY MARKET

Early Liberalization Phase: 1992-1995 (Fixed Pricing)

The initiation of the process of reform in India also would not have been possible without
changes in the regulatory framework. The New Economic policy (1991) led to a major
change in the regulatory framework of the capital market in India. The Capital Issues
(Control) Act 1947 was repealed and the Office of the Controller of Capital Issues (CCI)
was abolished. The Securities and Exchange Board of India (SEBI), established in 1988 and
armed with statutory powers in 1992, came to be established as the regulatory body with the
necessary authority and powers to regulate and reform the capital market. SEBI came to be
recognized as a regulatory body for the capital market after the abolition of the CCI. The
control on pricing of capital issue has been abolished and easy access is provided to the
capital market. Initial Public Issue caught the attention of general public only after the
success of Reliance, when millions of small investors made huge returns which were
unheard of till then. Dhirubhai Ambani was the first promoter who raised huge amounts
through the public issue route to finance large facilities.

The issue process was smoothened, procedures were simplified and free pricing was
allowed, although with certain restrictions, The Indian market had the concept of par value
of equity shares, and anything above par was considered premium. The only companies that
were allowed to come with premium issues were those, which had a three year profit-track
record for the preceding five years. New companies without this record could float premium
issues if their promoting companies had the same track record and they had to hold 50% of
the post issue capital. Any new company floated by first generation entrepreneurs could
only issue equity at par. There was no restriction about prices in a premium issue.

The offer was always at a fixed price, whether premium or par. The companies had to
appoint intermediaries like merchant bankers, registrars, bankers etc. Merchant bankers
had the responsibility of fixing the prices, in consultation with the company, carrying out
with due diligence, preparing the prospectus (offer documents) etc. The prospectus had to be
submitted to SEBI for getting scrutiny.

49
The trend continued in the early nineties as many large projects were launched after the
economy was liberalised. Many of these companies came out with public issues and the
retail participation increased dramatically. But many of the companies which raised money
during this period just disappeared without a trace.

Late Liberalisation Period: 1996-2005 (Book Building)

The late nineties and the first few years of the current decade did not see much activity in
the primary market even though we saw a huge bull run led by technology stocks at the turn
of the decade. The bad experiences of retail investors kept them away from the market and
made it difficult for companies to launch successful issues. The corporate sector was
recovering from the damage caused by large capacity expansions and new projects set up in
the nineties.

The dormant primary issues market came alive after 2003 mostly because of the divestment
programme of the government. The issue of Maruti Udyog, through which the government
sold part of its stake in the company, rekindled retail investor interest in the primary market.
The issue was made at a very reasonable price and investors made very good returns
immediately.

The year 2004 saw the primary market activity at its historic peak as some large private
companies also came out with issues. Further divestment by the government; including the
largest ever issue by an Indian company from ONGC, attracted more retail investors into the
market. The IPO market continues to buzz in the current year as well. Taking advantage of
the strength in the secondary market, many high profle companies are lining up to raise
money from the market. The year started with the issue from Jet Airways which attracted a
lot of interest from investors. As a result of tougher regulations, the quality of the issues has
gone up substantially.

50
2006 onwards scenario:

India's IPO market emerged as the eighth largest with $7.23 billion (Rs 30,000 crore) in net
proceeds through 78 public issues, global research and consultancy firm Ernst & Young said
in its Global IPO report. Across the world, the companies raised $246 billion, up from $167
billion in 2005, through a total of 1,729 IPOs, led by Chinese companies at the top with net
proceeds of $56.6 billion. However, the biggest number of IPOs came from the United
States with 187 offerings, followed by Japan with 185 and China with 175 IPOs. According
to the study, India's increasing number of larger deals has been driven by the growth of
Indian corporations and their need for additional capital for potential acquisitions. In 2007
Indian IPOs continue to surge in numbers. Continued strength is expected in the real estate
and energy sector. "The rapid growth in emerging market economies has resulted in a
migration of capital from the developed economies into the emerging markets," E&Y said.

The localisation trend in India is evidenced by several billion-dollar IPOs hosted by Indian
exchanges. In 2006, India's largest IPO, Reliance Petroleum raised $1.8 billion, followed by
the oil production and exploration company, Cairn Energy, which raised $1.3 billion with
both companies listing on domestic exchanges.

However, some Indian companies are also listing abroad, especially London, Singapore and
Luxembourg, primarily for higher valuations and visibility, the report noted.

51
COMPANY PROFILE

52
 COMPANY PROFILE

Reliance Securities is a broking arm of Reliance Capital. It is one of India’s

largest retail broking houses with over 7 lakh customers and a pan-India presence at more
than 1700 locations. The company is a corporate member of both the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE), and provides access
to equities, derivatives, IPO’s, mutual funds, bonds and corporate FDs. It is a financial
services companies in India. Reliance Capital also ranks among the top private sector
financial services and banking groups, in terms of net worth in India. The company is a
constituent of MSCI India and CNX Junior Nifty. As of July 2014, Reliance Capital's
market capitalisation was over160 billion (US$2.4 billion), ahead of Bajaj Holdings, L&T
Finance promoted by Larsen & Toubro and Muthoot Finance. As of March 31, 2013,
Reliance Capital had assets worth 455.28 billion (US$6.7 billion), a 16-fold increase in 8
years and net worth of 124.83 billion (US$1.8 billion).

Reliance Capital has interests in asset management and mutual funds; life
insurance and general insurance; commercial finance stock broking; wealth
management services; distribution of financial products; private equity; asset reconstruction;
proprietary investments and other activities in financial services. The company operates
across India and has over 20 million customers and workforce of approximately 18,500 as
of March 31, 2014.

Anil Ambani, promoter of Reliance Group is the Chairman of Reliance Capital,

while Amitabh Jhunjhunwala is the Vice-Chairman and Sam Ghosh is the Chief Executive
Officer

Reliance Capital Limited was incorporated in year 1986 at Ahmedabad in Gujarat as

Reliance Capital & Finance Trust Limited. The name Reliance Capital came into effect
from January 5, 1995.

In 2002, Reliance Capital Ltd shifted its registered office to Jamnagar in Gujarat before it
finally moved to Mumbai in Maharashtra, in 2006. In 2006, Reliance Capital Ventures

53
Limited merged with Reliance Capital and with this merger the shareholder base of Reliance
Capital rose from 0.15 million shareholders to 1.3 million. Reliance Capital entered the
Capital Market with a maiden public issue in 1990 and in subsequent years further tapped
the capital market through rights issue and public issues. The equity shares were initially
listed on the Ahmedabad Stock Exchange and The Stock Exchange Mumbai.

Presently the shares are listed on The Stock Exchange Mumbai and the National Stock
Exchange of India.

Reliance Capital had a net debt equity ratio of 1.82 as of March 31, 2014. It is one of the top
most rated Indian financial institutions and enjoys the highest ratings of ‘A1+’ by ICRA and
CRISIL, for its short term borrowing program and ‘CARE AAA’ by CARE for its long term
borrowing program.

Reliance Capital offers a range of financial services in many business lines. The company is
one of the most diversified financial services firms in India with interests expanding from
asset management, insurance, commercial finance, broking, private equity to other niche
financial services.

Reliance Capital Asset Management (RCAM) managed 1.94 trillion (US$29 billion) as on
March 31, 2014, across mutual funds, pension funds, managed accounts and offshore funds.
RCAM manages Reliance Mutual Fund (RMF), which is amongst India’s top three Mutual
Funds, with Average Assets under Management (AAUM) of ₹1.13 trillion(US$17 billion)
for June 30, 2014. Sundeep Sikka is the CEO of Reliance Capital Asset Management.
Reliance Mutual Fund is the first Indian Mutual Fund to have crossed the Rs. 1 trillion
AUM mark.

It is also the leading AMC in garnering AUMs from ‘beyond Top 15 cities’ category (18%
share in total AUMs).

In September Reliance Capital Asset Management and Japanese financial services major
Nissay have joined hands to launch two mutual fund products for the Japanese retail
investors.

54
Reliance Life Insurance

Reliance Life Insurance is among the top private sector life insurance players in terms of
new business premium with a market share of 7% of the private sector. The total premium
was 42.57 billion (US$630 million) for the year ended March 31, 2014. Reliance Life offers
products that fulfill savings and protection needs of millions of Indians.

Reliance Life is the only life insurance player in India to be certified with ISO 2000 9001
for all its processes and first life insurance company to introduce OTC process. Reliance
Life offers 22 products, of which 16 are targeted at individuals and 6 at group business.

The distribution network stood at over 900 offices as on March 31, 2014.

Reliance General Insurance

Reliance General Insurance is one of the top five private sector general insurance companies
in India in terms of gross written premium with a private market share of 7.5%. RGI offers
insurance solutions for auto, health, home, property, travel, marine, commercial and other
specialty products.

The Gross Written Premium for the year ended March 31, 2014 was at ₹24.42
billion (US$360 million) with a distribution network composed of over 125 branches and
nearly 15,500 intermediaries.

Reliance Commercial Finance

Reliance Commercial Finance is amongst the leading lenders in Indian non-banking finance
sector. RCF offers a wide range of products which include Home loans, Loans against
property, Small and Medium Enterprises loans, Vehicle loans, Loans for construction
equipment and Infrastructure financing.

The company had a loan book at ₹136.67 billion (US$2.0 billion)as on March 31, 2014,
with over 66,000 customers across top 37 Indian metros.

Reliance Capital's Broking and Distribution Business

Reliance Capital’s broking business – Reliance Securities, one of the leading retail broking
houses in India, provides a varied customer base with access to equities, equity options,
wealth management solutions and mutual funds.
55
The distribution business of Reliance Capital, branded as ‘Reliance Money’ is a
comprehensive financial services and solutions provider, providing customers with access to
mutual funds, insurance products and other financial products. Reliance Money is amongst
the leading domestic distributors of financial products with a pan India presence with over
170 branches

Reliance Asset Reconstruction

Reliance Asset Reconstruction is the premier asset reconstruction company, the principal
sponsor/shareholder of which is the Reliance Group (through Reliance Capital). As on
March 31, 2014, the asset base was over ₹6.8 billion (US$100 million).

Major Deals

Reliance Capital is known to have struck some of the biggest deals in the Indian financial
services sector.

In 2018, Reliance Capital sold 26% stake in its life insurance business - Reliance Life
Insurance - to Nippon Life Insurance (Nissay), amongst the world's largest life insurer with
an AUM of over 600 billion. The transaction was completed at Rs. 3,062 crore for 26 per
cent stake, valuing Reliance Life Insurance at $2.6 billion.

This was the largest deal in the insurance sector in India. Recently, the government of India
has announced 49% foreign holding in Indian insurance firms, up from the 26% holding
allowed earlier.

In 2012, Nippon Life Insurance bought 26% stake in Reliance Capital Asset Management
for Rs. 1,450 crore, making it the biggest inward stake buy in the mutual fund industry. The
deals were lauded in the Indian financial services sector in India by analysts. Value
Research, a major financial research firm lauded this strategic stake sale by Reliance Capital
to Nippon Life Insurance in two of its businesses.

Industry players also believe that such high value and credible deals struck by Reliance
Capital has helped increase the valuations of the Indian financial services space in the
prolonged global economic slowdown and after the Lehman triggered financial crisis.

Reports indicate that Reliance Capital is also planning to sell 26% stake in its general
insurance business - Reliance General Insurance - at an appropriate timeIndia's leading
financial daily Economic Times wrote, since Reliance General Insurance is one of the

56
leading players, the proposed stake sale is expected to generate handsome capital gains for
Reliance Capital. The de-leveraging of the balance sheet and ongoing restructuring should
help Reliance Capital conserve capital and generate better return ratios.

After the recent announcement by Finance Minister Arun Jaitley to increase investment
limit for foreigners in Indian insurance sector to 49%, Espirito Santo said Reliance Capital
is going to benefit the most from the decision due to its successful presence in both life and
general insurance and ability draw appropriate valuation from foreign partners due to its
diversified strength and last mile reach in financial services sector in India.

Reliance Capital in July announced the merger of its global film and media services
business with Prime Focus to create an entity with a combined turnover of over Rs 1,800
crore.

Sam Ghosh is the Executive Director and Group Chief Executive Officer of Reliance
Capital.

He joined the company in April 2008. Before joining Reliance Capital, Sam was the
Regional CEO of Middle East and India Sub Continent region of Allianz, a German
insurance company.

Prior to that, he was the CEO of Bajaj Allianz Life and General Insurance and set up
operations for Allianz in South East Asia.

He spent ten years in Australia in various senior roles with Allianz - from CFO to managing
subsidiary companies as well as setting up operations in the Pacific Rim.

Sam Ghosh is a Chartered Accountant from England and a Mechanical Engineer.

57
 CHAPTER –IV

DATA ANALYSIS
&
INTERPRETATIONS

58
TREND OF IPOS YEAR ON YEAR

Year Amount (Rs. Crore) No of Issues

2013-14 24,993 85
2014-15 53,219 91
2015-16 3,534 22
2016-17 49,441 47
2017-18 55,613 67
2018-19 14,178 38
60,000

50,000

40,000

30,000 Amount (Rs. Crore)

No of Issues
20,000

10,000

0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

59
 TOP GAINERS - 2018

NAME OF THE ISSUE PRICE ON ISSUE INCREASE

31ST DEC PRICE (%)
2018 (RS) RS.)
ONELIFE CAPITAL ADVISORS 230.1 180 109.18%
LIMITED
AANJANEYA LIFECARE LIMITED 485.05 234 107.29%
PRAKASH CONSTROWELL LTD 243.6 138 76.52%
RUSHIL DECOR LIMITED 120.25 72 67.01%
FLEXITUFF INTERNATIONAL 257 155 65.81%
LIMITED
LOVABLE LINGERIE LIMITED 316.6 205 54.44%
TREE HOUSE EDUCATION & 158 135 17.04%
ACCESSORIES

500 485.05

450

400

350 109% 107%

77% 67%
66%
300
257
243.6
250 230.1 234

200
155
138
150
110
120.25
100 72

50
ONELIFE CAPITAL AANJANEYA LIFECARE PRAKASH RUSHIL DECOR FLEXITUFF
ADVISORS LIMITED LIMITED CONSTROWELL LTD LIMITED INTERNATIONAL
Issue Price Current Price Increase

60
 TOP Losers - 2018

PRICE ON ISSUE DECREASE

NAME OF THE ISSUE 31ST DEC PRICE (%)
2018 (RS) RS.)
TAKSHEEL SOLUTIONS LIMITED 12.85 150 -91.43%
BHARATIYA GLOBAL INFOMEDIA 7.35 82 -91.04%
LIMITED
ACROPETAL TECHNOLOGIES 18.5 90 -87.22%
LIMITED
BROOKS LABORATORIES LIMITED 13.25 100 -86.75%
SHILPI CABLE TECHNOLOGIES 9.6 69 -86.09%
LIMITED
INDO THAI SECURITIES LIMITED 10.6 74 -85.68%
SERVALAKSHMI PAPER LIMITED 4.35 29 -85.00%
PARAMOUNT PRINTPACKAGING 5.55 35 -84.14%
LIMITED
VASWANI INDUSTRIES LIMITED 10.55 49 -78.47%
SANGHVI FORGING AND 22.25 85 -73.82%
ENGINEERING

150 150

120
100
90
90 82
69
-91% -91% -87% -87%
-86%
60

30
12.85 11.5 13.25
7.35 9.6

0
TAKSHEEL SOLUTIONS BHARATIYA GLOBAL ACROPETAL BROOKS SHILPI CABLE
LIMITED INFOMEDIA LIMITED TECHNOLOGIES LABORATORIES TECHNOLOGIES
Issue Price Current Price Decrease

61
 IPOS By Grade

Grade Assigned Total

IPO GRADE 1 6
IPO GRADE 2 17
IPO GRADE 3 10
IPO GRADE 4 4
IPO GRADE 5 1

IPOs by Grade

IPO GRADE 1
IPO GRADE 2
IPO GRADE 3
IPO GRADE 4
IPO GRADE 5

TOP BOOK RUNNERS – LEAD MANAGERS IN 2018

Book Runners - Lead Managers IPOs

JM Financial Consultants Private Limited 5
Almondz Global Securities Limited 4
Arihant Capital Markets Limited 3
Ashika Capital Limited 3
Corporate Strategic Allianz Limited 3
ICICI Securities Limited 3
Reliance Capital Company Limited 3

62
63
 CHAPTER - V

FINDINGS,
SUGGESTIONS &
CONCLUSION

64
 FINDINGS

 IPOs are the most popular for private companies to go public.

 Companies generally go for IPOs for expansion of operations or setting up new
divisions.
 IPOs are not so popular in India compared to the western countries.
 IPOs were offered at Fixed Offer Prices earlier, but Book Building process has been
popular in the recent years.
 BSE IPO index is performing badly compared to the SENSEX.
 The total number of companies that have come for are just around 500 in the last 10
years
 The total no of companies coming for IPO have touched the maximum (102) in
2016-2017.
 The no of IPOs in 2015-2016 (till date) are just 38 as compared to 67 in the previous
year.
 2014-2015 was mostly affected with just 22 companies coming for IPOs because of
recession. Companies were not coming for IPOs due to lack of investor confidence.
 Of the 38 companies that have come for IPO this year, only 7 companies are now
trading at a profit while the rest of companies are now trading at a loss.
 JM Financial Consultants Private Limited and Almondz Global Securities Limited
stood on top in the list of Book Runners & Lead Managers in 2018.
 Close to 100 companies are in the pipe line to raise money through IPOs in the
coming months.

65
 SUGGESTIONS

 A thorough fundamental analysis should be done before investing in any IPOs.

 Investors should come out of the opinion that all the IPOs will be traded at a
premium.
 Looking at the previous trends, investors should be cautious while investing in
Initial Public Offerings.
 Investors in IPOs should study the company and the growth of industry in which it is
operating in thoroughly.
 Investors should also look at the economic conditions before investing in an IPO.
 The government in co-ordination with SEBI should be more proactive in checking
dubious companies coming for IPOs with the sole objective of raising money to
cheat the public.
 There should be more stringent rules imposed for companies to go public.

66
 CONCLUSIONS

Investors should be careful while investing in IPOs. The essential points to take care of to
see that IPOs are successful and investors benefit from investing in the IPOs include:

1. Investors should check that companies are appointing underwriters, book runners and
lead managers appointed have good expertise in the industry.
2. The market relies heavily on analyst projections and recommendations: Investors should
understand the company, customers, and competition; and also see that promoters have
sincere commitment in covering the company.
3. Previous trends play an important role. The underwriter must have the ability and
contacts to identify the right investor groups for the company and get them committed to
attend. References from previous IPO successes are essential.
4. There must be sufficient evidence of being able to build a quality "book" of potential
orders for your stock.
5. There should be a history regarding the ability to identify the right offer price and size.
6. Investors should go for those IPOs where companies provide significant aftermarket
support in terms of maintaining and supporting trading in the stock, providing subsequent
research reports on the company, and continuing institutional exposure to the company.

67
CHAPTER-VI

ANNEXURE

68
 Initial Public Offerings in 2018
Date of Grade
Name of the issue Issue Price ( Rs.) Listing assigned
IPO
TAKSHEEL SOLUTIONS LIMITED 150 19-Oct-18 GRADE 2
BHARATIYA GLOBAL INFOMEDIA IPO
LIMITED 82 28-Jul-18 GRADE 2
IPO
ACROPETAL TECHNOLOGIES LIMITED 90 10-Mar-18 GRADE 3
IPO
BROOKS LABORATORIES LIMITED 100 5-Sep-18 GRADE 2
SHILPI CABLE TECHNOLOGIES IPO
LIMITED 69 8-Apr-18 GRADE 1
IPO
INDO THAI SECURITIES LIMITED 74 2-Nov-18 GRADE 2
IPO
SERVALAKSHMI PAPER LIMITED 29 12-May-18 GRADE 2
PARAMOUNT PRINTPACKAGING IPO
LIMITED 35 * GRADE 2
IPO
VASWANI INDUSTRIES LIMITED 49 24-Oct-18 GRADE 2
SANGHVI FORGING AND IPO
ENGINEERING LTD 85 * GRADE 3
IPO
M AND B SWITCHGEARS LIMITED 186 20-Oct-18 GRADE 2
PTC INDIA FINANCIAL SERVICES IPO
LIMITED 28 30-Mar-18 GRADE 4
IPO
TIMBOR HOME LIMITED 63 22-Jun-18 GRADE 1
OMKAR SPECIALITY CHEMICALS IPO
LIMITED 98 10-Feb-18 GRADE 3
IPO
SRS Limited 58 16-Sep-18 GRADE 3
IPO
SUDAR GARMENTS LIMITED 77 18-Mar-18 GRADE 1
IPO
PG ELECTROPLAST LIMITED 210 26-Sep-18 GRADE 3
IPO
INNOVENTIVE INDUSTRIES LIMITED 187 13-May-18 GRADE 3
IPO
L&T FINANCE HOLDINGS LIMITED 52 12-Aug-18 GRADE 5
IPO
TD POWER SYSTEMS LIMITED 256 8-Sep-18 GRADE 4
IPO
MUTHOOT FINANCE LIMITED 175 6-May-18 GRADE 4
IPO
FUTURE VENTURES INDIA LIMITED 10 10-May-18 GRADE 3
TREE HOUSE EDUCATION & IPO
ACCESSORIES LIMITED 135 26-Aug-18 GRADE 3

IPO
LOVABLE LINGERIE LIMITED 205 24-Mar-18 GRADE 3
IPO
FLEXITUFF INTERNATIONAL LIMITED 155 19-Oct-18 GRADE 3
IPO
RUSHIL DECOR LIMITED 72 7-Jul-18 GRADE 2
Prakash Constrowell Ltd 138 * IPO

69
 GRADE 2
IPO
AANJANEYA LIFECARE LIMITED 234 27-May-18 GRADE 2
IPO
ONELIFE CAPITAL ADVISORS LIMITED 180 17-Oct-18 GRADE 1
IPO
SWAJAS AIR CHARTERS LIMITED * * GRADE 2
IPO
RDB Rasayans Limited 79 * GRADE 2
INVENTURE GROWTH AND IPO
SECURITIES LTD Rs 187 * GRADE 2
IPO
READYMADE STEEL INDIA LTD Rs 108 * GRADE 2
IPO
BIRLA PACIFIC MEDSPA LIMITED 10 * GRADE 2
IPO
VMS INDUSTRIES LIMITED 40 * GRADE 1
Issue withdrawn on 18 IPO
GALAXY SURFACTANTS LIMITED May 2018 * GRADE 4
POWER FINANCE CORPORATION
LIMITED 203 *
IPO
FINEOTEX CHEMICAL LIMITED 70 * GRADE 2
TATA STEEL LIMITED 610 *
MIDVALLEY ENTERTAINMENT IPO
LIMITED 70 * GRADE 1

70
BIBLIOGRAPHY

71
BIBLIOGRAPHY

BOOKS

1. Khan M. Y .and Jain. P.K (2009). Financial management. Pearson publications

WEBSITES
 www.moneycontrol.com
 www.capitalline.com
 www.nseindia.com
 www.sebi.gov.in
 www.capitalmarket.com
 www.wikipedia.com
 www.intimesepctrum.com
 www.thehindubusinessline.com
 www.financialexpress.com
 www.myiris.com
 www.icraratings.com

NEWSPAPERS

1. Economic Times

72