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Akrati Swati Shivani Mansi Agarwal Vishal Mittal Anand Mishra Chetan Gupta Saurabh Sharma Himanshu Chauhan
ROLE OF UNDERWRITERS
Merchant banker can work as lead manager co lead manager investment banker underwriter etc. lead managers are fully responsible for the content and correctness of the prospectus. They must ensure the commencement to the completion of the IPO. Certain guidelines are laid down in section 30 of the SEBI act 1992 on the maximum limits of the intermediaries associated with the issue.
RIGHT ISSUE
* A rights issue is an issue of additional shares by a company to
raise capital under a seasoned equity offering. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm at a specified price within a specified time.[1] A rights issue is in contrast to an initial public offering, where shares are issued to the general public through market exchanges. Closed-end companies cannot retain earnings, because they distribute essentially all of their realized income, and capital gains each year. [2] They raise additional capital by rights offerings. Companies usually opt for a rights issue either when having problems raising capital through traditional means or to avoid interest charges on loans.
Private placement
* The sale of securities to a relatively small number of
select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market.
Preferential issue
* The sale of securities to a relatively small number of select
investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market.
speedy method of private placement whereby a listed company can issue shares or convertible securities to a select group of persons. QIP scores over other methods because the issuing firm does not have to undergo elaborate procedural requirements to raise this capital.
QUESTION-1
Year
Total Issue s
Mem o Item
April 1, 2013
2004-05
NO.
23
11
34
34
26
60
Amount
12382(R)
1225 8 43.3 8
24640
24640
3616
28256
3200
43.82
87.20
87.20
12.80
100
11.32
Year
Total Issue s
Mem o Item
April 1, 2013
2005-06
NO.
79
24
103
103
36
139
Amount
10936
12358
23294
23294
4088
27382
296
39.94
45.13
85.07
85.07
14.93
100
1.08
-11.67
+0.81
-5.46
-5.46
+13.05
-3.09
-90.75
Year
Total Issue s
Mem o Item
April 1, 2013
2006-07
NO.
77
85
85
39
124
Amount
28504(R ) 85.07
1293
29797
29797
3711
33508
587
3.86
88.93
11.07
100
1.75
+130.20
89.45
+20.92
+20.92
+2.62
+18.58
-81.65
Year
Total 2 Total Memo Offer (i)+(ii Right Issues Item for ) Issues sale
April 1, 2013
2007-08
NO.
85
07
92
92
32
124
7*
Amount
42595
11916
54511
0.00
54511
32518
87029
2152
48.94
13.69
62.63
0.00
62.63
37.37
100.00
2.47
+244.00
-2.79
+121.22
+121.22
+799.28
+208.00
-32.75
QUESTION-2 WHAT MAY BE THE POSSIBLE REASONS OF OVER-SUBSCRIPTION IN IPOs SPECIALLY IN RECENT TIMES?
ANSWER-2
*Over subscription of an IPOs occurs when the market
demand for shares is more the supply or the actual number of shares. *Firms go public in hot markets, which in turn creates the appearance of overpricing in the long run as market levels taper off. *Investing in an IPOs can be an easy way to make a good return in a short period of time. It is a standard practice for underwriters to price the IPOs below fair market value so the stock prices in value immediately upon issue, making a nice profit for the initial share holders.
QUESTION-3
ANSWER-3
* The main reason behind the downfall of the primary market
specially in IPOs segment was the aggressive IPOs pricing and poor post listing performances that have made retail investors highly cautious in 2009.the retail investors have taken out over rupees 14000cr from the secondary market in the second part of 2008-09 and have left the half, the initial public offerings undersubscribed. These investors have also accorded a tepid response to equity schemes of mutual funds.
corporate earnings worries, retail investors played it safe by depositing their money in banks and post offices.
CONCLUSION
* THE PRIMARY MARKET WAS IN A
DEPRESSED STATE IN A LONG TIME .IT WAS DUE TO SUBDUED DUE TO LACK OF INVESTORS CONFIDENCE .MANY FRADULENT PROMOTERS TOOK ADVANTAGE OF THE FREE PRICING REGIME AND DUPED INVESTORS.THE PRIMARY MARKET RIVIVED DURING 2004-05 AS MANY GOOD QUALITY SCRIPTS FROM PRIVATE SECTOR COMPANIES WERE SUBSCRIBED TO ENTHUSIATICLLY BY THE INVESTORS. WILL GO A LONG WAY IN SUSTAINING THE RIVIVAL OF THE PRIMARY MARKET.IT IS THE GOOD FAITH OF THE SMALL INVESTORS ,REGULATOR,AND PROMOTER WHICH CAN HELP THESE ISSUES TO BECOME A SUCCESS.