CHAPTER-1

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INTRODUCTION

INTRODUCTION

Every modern economy is based on a sound financial system .A financial system is a set of
institutional arrangements through which financial surpluses are mobilized from the units
generating surplus income and transferring them to the others in need of them. The activities
include production, distribution, exchange and holding of financial assets/instruments of
different kinds by financial institutions, banks and other intermediaries of the market.
The financial markets have two major components; they are money market and capital market.

Financial Markets

Capital Market

Securities Market

New issue (Primary)

Market

other forms of Lending

And Borrowing
Stock (Secondary)

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Money Market

MONEY MARKET:
The Money Market refers to the market where borrowers and lenders exchange shortterm funds to solve their liquidity needs.
CAPITAL MARKET:
The Capital Market is a market for financial investments that are direct or indirect claims
to capital .
SECURITIES MARKET:
It refers to the markets for those financial instruments/claims/obligations that are
commonly and readily transferable by sale. It has two inter-dependent and inseparable segments,
the new issues (primary) market and the stock (secondary) market.
SECONDARY MARKET:
The secondary market enables those who hold securities to adjust their holdings in response
to changes in their assessment of risk and return.
PRIMARY MARKET:

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The Primary Markets provides the channel of sale of new securities.

OBJECTIVES:

To know the awareness of people about IPO.

To know about how IPO helps in raising fund for the companies going public.
To understand the deep insights of the Pros & Cons of IPO.
How IPO is driven in the market and what are various factors taken into consideration

before going for an IPO.

To know how we can judge a good IPO.

SCOPE OF THE STUDY:

As the study concentrates on narrow concept of IPO. There are various kinds of issues

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(like IPO, Rights Issue and Preferential Issue) through which capital can be raised.
The study has been done on only 3 Company IPOs .
This study is only a humble attempt to analyze IPO.

METHODOLOGY OF STUDY:

Research methodology is a frame work or blue print for conducting the research project. Its specifies the
details of procedures necessary for obtaining the information needed.
Data Collection Method
More specific information from various sources is to be collected and the accuracy is of great significance
for drawing correct and valid conclusions. The nature of the source of the data depends upon the type of
the information required.
Primary Data
To trace the profile and effectiveness of the study in the company, the respective internal circulars and

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company website were utilized.

Secondary Data:
Secondary Data collected from various websites of the stock market.

The Sources of collecting Data:

II.

Reports and publication of Government department and international bodies.

Newspaper, magazines, trade journals.

III.

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

IV.

Data related by statistical organization.

V.

In this study the main sources of data collection is the primary data using the method of
structured questionnaire.

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I.

LIMITATIONS OF STUDY

The study is conducted in short period, due to which the study may not be detailed in all

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aspects.
Due to time constrain I wasnt able to cover all aspects of the issue of securities (IPO).
The study conducted which covers only Indian Stock Broking industries
The Study cant be said as totally perfect due to limited study on recent IPOs.

CHAPTER-2

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REVIEW OF LITERATURE

INITIAL PUBLIC OFFERING (IPO)

The first public offering of equity shares or convertible securities by a company, which is
followed by the listing of a companys shares on a stock exchange, is known as an Initial
Public Offering. In other words, it refers to the first sale of a companys common shares to
investors on a public stock exchange, with an intention to raise new capital.
The most important objective of an IPO is to raise capital for the company. It helps a company
to tap a wide range of investors who would provide large volumes of capital to the company for
future growth and development.

A company going for an IPO stands to make a lot of money

from the sale of its shares which it tries to anticipate how to use for further expansion and
development. The company is not required to repay the capital and the new shareholders get a
right to future profits distributed by the company.

Companies fall into two broad categories: Private and Public.

A privately held company has fewer shareholders and its owners don't have to disclose much
information about the company. When a privately held corporation needs additional capital, it
can borrow cash or sell stock to raise needed funds. Often "going public" is the best choice for a
growing business. Compared to the costs of borrowing large sums of money for ten years or
more, the costs of an initial public offering are small. The capital raised never has to be repaid.
When a company sells its stock publicly, there is also the possibility for appreciation of the share
price due to market factors not directly related to the company. Anybody can go out and
incorporate a company: just put in some money, file the right legal documents and follow the
reporting rules of jurisdiction such as Indian Companies Act 1956. It usually isn't possible to buy
shares in a private company. One can approach the owners about investing, but they're not
obligated to sell you anything. Public companies, on the other hand, have sold at least a portion
of themselves to the public and trade on a stock exchange. This is why doing an IPO is also

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referred to as "going public."

Why go public??
Before deciding whether one should complete an IPO, it is important to consider the
positive and negative effects that going public may have on their mind. Typically, companies go
public to raise and to provide liquidity for their shareholders. But there can be other benefits.
Going public raises cash and usually a lot of it. Being publicly traded also opens many financial
doors:
Because of the increased scrutiny, public companies can usually get better rates when
they issue debt.
As long as there is market demand, a public company can always issue more stock. Thus,
mergers and acquisitions are easier to do because stock can be issued as part of the deal.
Trading in the open markets means liquidity. This makes it possible to implement things
like employee stock ownership plans, which help to attract top talent.
Going public can also boost a companys reputation which in turn, can help the company
to expand in the marketplace.

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SIGNIFICANCE OF IPO

Investing in IPO has its own set of advantages and disadvantages. Where on one hand, high
element of risk is involved, if successful, it can even result in a higher rate of return. The rule is:
Higher the risk, higher the returns.
The company issues an IPO with its own set of management objectives and the investor looks for
investment keeping in mind his own objectives. Both have a lot of risk involved. But then
investment also comes with an advantage for both the company and the investors.
The significance of investing in IPO can be studied from 2 viewpoints for the company and for
the investors. This is discussed in detail as follows:

SIGNIFICANCE TO THE COMPANY:

When a privately held corporation needs additional capital, it can borrow cash or sell stock to
raise needed funds. Or else, it may decide to go public. "Going Public" is the best choice for a
growing business for the following reasons:

The costs of an initial public offering are small as compared to the costs of borrowing
large sums of money for ten years or more,

The capital raised never has to be repaid.

When a company sells its stock publicly, there is also the possibility for appreciation of
the share price due to market factors not directly related to the company.

It allows a company to tap a wide pool of investors to provide it with large volumes of
capital for future growth.

SIGNIFICANCE TO THE SHAREHOLDERS:

The investors often see IPO as an easy way to make money. One of the most attractive features
of an IPO is that the shares offered are usually priced very low and the companys stock prices
This is seen as a good

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can increase significantly during the day the shares are offered.

opportunity by speculative investors looking to notch out some short-term profit.

The

speculative investors are interested only in the short-term potential rather than long-term gains.

Primary Market And Secondary Market

When shares are bought in an IPO it is termed primary market. The primary market does
not involve the stock exchanges. A company that plans an IPO contacts an investment banker
who will in turn called on securities dealers to help sell the new stock issue.
This process of selling the new stock issues to prospective investors in the primary
market is called underwriting.
When an investor buys shares from another investor at an agreed prevailing market price,
it is called as buying from the secondary market.
The secondary market involves the stock exchanges and it is regulated by a regulatory
authority. In India, the secondary and primary markets are governed by the Security and
Exchange Board of India (SEBI).

Kinds of Public Offerings:

1. Primary offering: - New shares are sold to raise cash for the company.
2. Secondary offering: - Existing shares (owned by VCs or firm founders) are sold, no new
cash goes to company. A single offering may include both of these initial public offering.

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THE RISK FACTOR

Investing in IPO is often seen as an easy way of investing, but it is highly risky and many
investment advisers advise against it unless you are particularly experienced and knowledgeable.
The risk factor can be attributed to the following reasons:

UNPREDICTABLE:
The Unpredictable nature of the IPOs is one of the major reasons that investors advise
against investing in IPOs. Shares are initially offered at a low price, but they see
significant changes in their prices during the day. It might rise significantly during the
day, but then it may fall steeply the next day.

NO PAST TRACK RECORD OF THE COMPANY:

No past track record of the company adds further to the dilemma of the shareholders as to
whether to invest in the IPO or not. With no past track record, it becomes a difficult
choice for the investors to decide whether to invest in a particular IPO or not, as there is
basis to decide whether the investment will be profitable or not.

POTENTIAL OF STOCK MARKET:

Returns from investing in IPO are not guaranteed. The Stock Market is highly volatile.
Stock Market fluctuations widely affect not only the individuals and household, but the
economy as a whole. The volatility of the stock market makes it difficult to predict how
the shares will perform over a period of time as the profit and risk potential of the IPO
depends upon the state of the stock market at that particular time.

RISK ASSESSMENT:
The possibility of buying stock in a promising start-up company and finding the next

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success story has intrigued many investors. But before taking the big step, it is essential

to understand some of the challenges, basic risks and potential rewards associated with
investing in an IPO.
This has made Risk Assessment an important part of Investment Analysis. Higher the
desired returns, higher would be the risk involved. Therefore, a thorough analysis of risk
associated with the investment should be done before any consideration.
For investing in an IPO, it is essential not only to know about the working of an IPO, but
we also need to know about the company in which we are planning to invest. Hence, it is
imperative to know:

The fundamentals of the business

The policies and the objectives of the business
Their products and services
Their competitors
Their share in the current market
The scope of their issue being successful

It would be highly risky to invest without having this basic knowledge about the company.

There are 3 kinds of risks involved in investing in IPO:

BUSINESS RISK:
It is important to note whether the company has sound business and management
policies, which are consistent with the standard norms. Researching business risk
involves examining the business model of the company.

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FINANCIAL RISK:
Is this company solvent with sufficient capital to suffer short-term business setbacks? The
liquidity position of the company also needs to be considered. Researching financial risk
involves examining the corporation's financial statements, capital structure, and other
financial data.

MARKET RISK:
It would beneficial to check out the demand for the IPO in the market, i.e., the appeal of
the IPO to other investors in the market. Hence, researching market risk involves
examining the appeal of the corporation to current and future market conditions.

ANALYSING AN IPO INVESTMENT

POTENTIAL INVESTORS AND THEIR OBJECTIVES:

Initial Public Offering is a cheap way of raising capital, but all the same it is not considered

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as the best way of investing for the investor. Before investing, the investor must do a proper

analysis of the risks to be taken and the returns expected. He must be clear about the benefits
he hope to derive from the investment. The investor must be clear about the objective he has
for investing, whether it is long-term capital growth or short-term capital gains.

The potential investors and their objectives could be categorized as:

INCOME INVESTOR:
An income investor is the one who is looking for steadily rising profits that will be
distributed to shareholders regularly.

For this, he needs to examine the company's

potential for profits and its dividend policy.

GROWTH INVESTOR:
A growth investor is the one who is looking for potential steady increase in profits that
are reinvested for further expansion. For this he needs to evaluate the company's growth
plan, earnings and potential for retained earnings.

SPECULATOR:
A speculator looks for short-term capital gains. For this he needs to look for potential of
an early market breakthrough or discovery that will send the price up quickly with little
care about a rapid decline.

INVESTOR RESEARCH:
It is imperative to properly analyze the IPO the investor is planning to invest into. He needs to
do a thorough research at his end and try to figure out if the objective of the company match his
own personal objectives or not. The unpredictable nature of IPOs and volatility of the stock
market adds greatly to the risk factor. So, it is advisable that the investor does his homework,
before investing.

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The investor should know about the following:

BUSINESS OPERATIONS:
What are the objectives of the business?
What are its management policies?
What is the scope for growth?
What is the turnover of the labour force?
Would the company have long-term stability?

FINANCIAL OPERATIONS:
What is the companys credit history?
What is the companys liquidity position?
Are there any defaults on debts?
Companys expenditure in comparison to competitors.
Companys ability to pay-off its debts.
What are the projected earnings of the company

MARKETING OPERATIONS:
Who are the potential investors?
What is the scope for success of the IPO?
What is the appeal of the IPO for the other investors?
What are the products and services offered by the company?
Who are the strongest competitors of the company?

IPO INVESTMENT STRATEGIES

Investing in IPOs is much different than investing in seasoned stocks. This is because there is
limited information and research on IPOs, prior to the offering. And immediately following the
offering, research opinions emanating from the underwriters are invariably positive.
There are some of the strategies that can be considered before investing in the IPO:

UNDERSTAND THE WORKING OF IPO:

The first and foremost step is to understand the working of an IPO and the basics of an
investment process. Other investment options could also be considered depending upon

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the objective of the investor.

 GATHER KNOWLEDGE:
It would be beneficial to gather as much knowledge as possible about the IPO market, the
company offering it, the demand for it and any offer being planned by a competitor.

INVESTIGATE BEFORE INVESTING:

The prospectus of the company can serve as a good option for finding all the details of
the company. It gives out the objectives and principles of the management and will also
cover the risks.
KNOW YOUR BROKER:
This is a crucial step as the broker would be the one who would majorly handle your
money. IPO allocations are controlled by underwriters. The first step to getting IPO
allocations is getting a broker who underwrites a lot of deals.

PRICING OF AN IPO

The pricing of an IPO is a very critical aspect and has a direct impact on the success or failure of
the IPO issue. There are many factors that need to be considered while pricing an IPO and an
attempt should be made to reach an IPO price that is low enough to generate interest in the
market and at the same time, it should be high enough to raise sufficient capital for the company.
The process for determining an optimal price for the IPO involves the underwriters arranging
share purchase commitments from leading institutional investors.
PROCESS:
Once the final prospectus is printed and distributed to investors, company management meets
with their investment bank to choose the final offering price and size. The investment bank tries
to fix an appropriate price for the IPO depending upon the demand expected and the capital

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requirements of the company.

The pricing of an IPO is a delicate balancing act as the investment firms try to strike a balance
between the company and the investors. The lead underwriter has the responsibility to ensure
smooth trading of the companys stock. The underwriter is legally allowed to support the price
of a newly issued stock by either buying them in the market or by selling them short.
IPO PRICING DIFFERENCES:
It is generally noted, that there is a large difference between the price at the time of issue of an
Initial Public Offering (IPO) and the price when they start trading in the secondary market.
These pricing disparities occur mostly when an IPO is considered hot, or in other words, when
it appeals to a large number of investors. An IPO is hot when the demand for it far exceeds the
supply.
This imbalance between demand and supply causes a dramatic rise in the price of each share in
the first day itself, during the early hours of trading.

UNDERPRICING AND OVERPRICING OF IPOs

UNDERPRICING:
The pricing of an IPO at less than its market value is referred to as Underpricing. In other words,
it is the difference between the offer price and the price of the first trade.
Historically, IPOs have always been underpriced. Underpriced IPO helps to generate
additional interest in the stock when it first becomes publicly traded. This might result in
significant gains for investors who have been allocated shares at the offering price. However,
underpricing also results in loss of significant amount of capital that could have been raised had
the shares been offered at the higher price.

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OVERPRICING:

The pricing of an IPO at more than its market value is referred to as Overpricing. Even
overpricing of shares is not as healthy option. If the stock is offered at a higher price than what
the market is willing to pay, then it is likely to become difficult for the underwriters to fulfill
their commitment to sell shares. Furthermore, even if the underwriters are successful in selling
all the issued shares and the stock falls in value on the first day itself of trading, then it is likely

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to lose its marketability and hence, even more of its value.

PRINCIPAL STEPS IN AN IPO

Approval of BOD: Approval of BOD is required for raising capital from the public.

Appointment of lead managers: the lead manager is the merchant banker who orchestrates the
issue in consultation of the company.

Appointment of other intermediaries:

Co-managers and advisors

Underwriters

Bankers

Brokers and principal brokers

Registrars

Filing the prospectus with SEBI: The prospectus or the offer document communicates
information about the company and the proposed security issue to the investing public. All the
companies seeking to make a public issue have to file their offer document with SEBI. If SEBI
or public does not communicate its observations within 21 days from the filing of the offer
document, the company can proceed with its public issue.

Filing of the prospectus with the registrar of the companies : once the prospectus have been
approved by the concerned stock exchanges and the consent obtained from the bankers, auditors,
registrar, underwriters and others, the prospectus signed by the directors, must be filed with the
registrar of companies, with the required documents as per the companies act 1956.

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Printing and dispatch of prospectus : After the prospectus is filed with the registrar of
companies, the company should print the prospectus. The quantity in which prospectus is printed
should be sufficient to meet requirements. They should be send to the stock exchanges and
brokers so they receive them atleast 21 days before the first announcement is made in the news
papers.

Filing of initial listing application: Within 10 days of filing the prospectus, the initial listing
application must be made to the concerned stock exchanges with the listing fees.

Promotion of the issue: The promotional campaign typically commences with the filing of the
prospectus with the registrar of the companies and ends with the release of the statutory
announcement of the issue.

Statutory announcement: The issue must be made after seeking approval of the stock
exchange. This must be published atleast 10 days before the opening of the subscription list.

Collections of applications: The Statutory announcement specifies when the subscription would
open, when it would close, and the banks where the applications can be made. During the period
the subscription is kept open, the bankers will collect the applications on behalf of the company.

Processing of applications: Scrutinizing of the applications is done.

Establishing the liability of the underwriters : If the issue is undersubscribed, the liability of
the underwriters has to be established.

Allotment of shares: Proportionate system of allotment is to be followed.

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Listing of the issue: The detail listing application should be submitted to the concerned stock
exchange along with the listing agreement and the listing fee. The allotment formalities should
be completed within 30 days.

Book building is the process of price discovery (Basic concept)

The company does not come out with a fixed price for its shares; instead, it indicates a price
band that mentions the lowest (referred to as the floor) and the highest (the cap) prices at which a
share can be sold.

Bids are then invited for the shares. Each investor states how many shares s/he wants and what
s/he is willing to pay for those shares (depending on the price band). The actual price is then
discovered based on these bids. As we continue with the series, we will explain the process in
detail.

According to the book building process, three classes of investors can bid for the shares:
1. Qualified Institutional Buyers: Mutual funds and Foreign Institutional Investors.
2. Retail investors: Anyone who bids for shares under Rs 50,000 is a retail investor.
3. High net worth individuals and employees of the company.

Allotment is the process whereby those who apply are given (allotted) shares. The bids are first
allotted to the different categories and the over-subscription (more shares applied for than shares
available) in each category is determined. Retail investors and high net worth individuals get
allotments on a proportional basis.

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Example 1:
Assuming you are a retail investor and have applied for 200 shares in the issue, and the
issue is over-subscribed five times in the retail category, you qualify to get 40 shares (200
shares/5). Sometimes, the over-subscription is huge or the issue is priced so high that you can't
really bid for too many shares before the Rs 50,000 limit is reached. In such cases, allotments are
made on the basis of a lottery.

Example 2:
Say, a retail investor has applied for five shares in an issue, and the retail category has
been over-subscribed 10 times. The investor is entitled to half a share. Since that isn't possible, it
may then be decided that every 1 in 2 retail investors will get allotment. The investors are then
selected by lottery and the issue allotted on a proportional basis. That is why there is no way you

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can be sure of getting an allotment.

BOOK BUILDING PROCESS

Book Building is basically a capital issuance process used in Initial Public Offer (IPO) which
aids price and demand discovery. It is a process used for marketing a public offer of equity
shares of a company. It is a mechanism where, during the period for which the book for the IPO
is open, bids are collected from investors at various prices, which are above or equal to the floor
price. The process aims at tapping both wholesale and retail investors. The offer/issue price is

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then determined after the bid closing date based on certain evaluation criteria.

The Process:
The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.
The Issuer specifies the number of securities to be issued and the price band for orders.
The Issuer also appoints syndicate members with whom orders can be placed by the
investors.
Investors place their order with a syndicate member who inputs the orders into the
'electronic book'. This process is called 'bidding' and is similar to open auction.
A Book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the 'book runner evaluates the bids on the basis
of the evaluation criteria which may include Price Aggression
Investor quality
Earliness of bids, etc.
The book runner the company concludes the final price at which it is willing to issue the
stock and allocation of securities.
Generally, the numbers of shares are fixed; the issue size gets frozen based on the price
per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
Book Building is a good concept and represents a capital market which is in the process
of maturing.
Book-building is all about letting the company know the price at which you are willing to buy
the stock and getting an allotment at a price that a majority of the investors are willing to pay.

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The price discovery is made depending on the demand for the stock.

The price that you can suggest is subject to a certain minimum price level, called the floor price.
For instance, the floor price fixed for the Maruti's initial public offering was Rs 115, which
means that the price you are willing to pay should be at or above Rs 115.
In some cases, as in Biocon, the price band (minimum and maximum price) at which you can
apply is specified. A price band of Rs 270 to Rs 315 means that you can apply at a floor price of
Rs 270 and a ceiling of Rs 315.
If you are not still very comfortable fixing a price, do not worry. You, as a retail investor, have
the option of applying at the cut-off price. That is, you can just agree to pick up the shares at the
final price fixed. This way, you do not run the risk of not getting an allotment because you have
bid at a lower price. If you bid at the cut-off price and the price is revised upwards, then the
managers to the offer may reduce the number of shares allotted to keep it within the payment
already made. You can get the application forms from the nearest offices of the lead managers to
the offer or from the corporate or the registered office of the company.

How is the price fixed?

All the applications received till the last date are analysed and a final offer price, known as the
cut-off price is arrived at. The final price is the equilibrium price or the highest price at which all
the shares on offer can be sold smoothly.
If your price is less than the final price, you will not get allotment. If your price is higher than the
final price, the amount in excess of the final price is refunded if you get allotment. If you do not
get allotment, you should get your full refund of your money in 15 days after the final allotment
is made. If you do not get your money or allotment in a month's time, you can demand interest at
15 per cent per annum on the money due.

How are shares allocated?

As per regulations, at least 25 per cent of the shares on offer should be set aside for retail
investors. Fifty per cent of the offer is for qualified institutional investors. Qualified

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Institutional Bidders (QIB) are specified under the regulation and allotment to this class is
made at the discretion of the company based on certain criteria.

QIBs can be mutual funds, foreign institutional investors, banks or insurance companies.
If any of these categories is under-subscribed, say, the retail portion is not adequately
subscribed, then that portion can be allocated among the other two categories at the
discretion of the management. For instance, in an offer for two lakh shares, around 50,000
shares (or generally 25 per cent of the offer) are reserved for retail investors. But if the bids
from this category are received are only for 40,000 shares, then 10,000 shares can be
allocated either to the QIBs or non-institutional investors.

The allotment of shares is made on a pro-rata basis. Consider this illustration: An offer is
made for two lakh shares and is oversubscribed by times times, that is, bids are received for
six lakh shares. The minimum allotment is 100 shares. 1,500 applicants have applied for 100
shares each; and 200 applicants have bid for 500 shares each. The shares would be allotted in
the following manner:

Shares are segregated into various categories depending on the number of shares applied
for. In the above illustration, all investors who applied for 100 shares will fall in category A
and those for 500 shares in category B and so on.

The total number of shares to be allotted in category A will be 50,000 (100*1500*1/3).

That is, the number of shares applied for (100)* number of applications received (1500)*
oversubscription ratio (1/3). Category B will be allotted 33,300 shares in a similar manner.

Shares allotted to each applicant in category A should be 33 shares (100*1/3). That is,
shares applied by each applicant in the category multiplied by the oversubscription ratio. As,
the minimum allotment lot is 100 shares, it is rounded off to the nearest minimum lot.
Therefore, 500 applicants will get 100 shares each in category A total shares allotted to the
category (50,000) divided by the minimum lot size (100).

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In category B, each applicant should be allotted 167 shares (500/3). But it is rounded off
to 200 shares each. Therefore, 167 applicants out of 200 (33300/200) would get an allotment
of 200 shares each in category B.

The final allotment is made by drawing a lot from each category. If you are lucky you
may get allotment in the final draw.

The shares are listed and trading commences within seven working days of finalisation of
the basis of allotment. You can check the daily status of the bids received, the price bid for
and the response form various categories in the Web sites of stock exchanges. This will give
you an idea of the demand for the stock and a chance to change your mind. After seeing the
response, if you feel you have bid at a higher or a lower price, you can always change the bid
price and submit a revision form.

The traditional method of doing IPOs is the fixed price offering. Here, the issuer and the
merchant banker agree on an "issue price" - e.g. Rs.100. Then one have the choice of filling
in an application form at this price and subscribing to the issue. Extensive research has
revealed that the fixed price offering is a poor way of doing IPOs. Fixed price offerings, all
over the world, suffer from `IPO underpricing'. In India, on average, the fixed-price seems to
be around 50% below the price at first listing; i.e. the issuer obtains 50% lower issue
proceeds as compared to what might have been the case. This average masks a steady stream
of dubious IPOs who get an issue price which is much higher than the price at first listing.
Hence fixed price offerings are weak in two directions: dubious issues get overpriced and
good issues get underpriced, with a prevalence of underpricing on average.

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What is needed is a way to engage in serious price discovery in setting the price at the IPO. No
issuer knows the true price of his shares; no merchant banker knows the true price of the shares;
it is only the market that knows this price. In that case, can we just ask the market to pick the
price at the IPO?

Imagine a process where an issuer only releases a prospectus, announces the number of shares
that are up for sale, with no price indicated. People from all over India would bid to buy shares in
prices and quantities that they think fit. This would yield a price. Such a procedure should
innately obtain an issue price which is very close to the price at first listing -- the hallmark of a
healthy IPO market.

Recently, in India, there had been issue from Hughes Software Solutions which was a milestone
in our growth from fixed price offerings to true price discovery IPOs. While the HSS issue has
many positive and fascinating features, the design adopted was still riddled with flaws, and we
can do much better.

Documents Required:

A company coming out with a public issue has to come out with an Offer Document/
Prospectus.

An offer document is the document that contains all the information you need about the
company. It will tell you why the company is coming is out with a public issue, its financials
and how the issue will be priced.
The Draft Offer Document is the offer document in the draft stage. Any company making a
public issue is required to file the draft offer document with the Securities and Exchange
Board of India, the market regulator.

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If SEBI demands any changes, they have to be made. Once the changes are made, it is filed
with the Registrar of Companies or the Stock Exchange. It must be filed with SEBI at least
21 days before the company files it with the RoC/ Stock Exchange. During this period, you
can check it out on the SEBI Web site.

Red Herring Prospectus is just like the above, except that it will have all the information as
a draft offer document; it will, however, not have the details of the price or the number of
shares being offered or the amount of issue. That is because the Red Herring Prospectus is
used in book building issues only, where the details of the final price are known only after
bidding is concluded.

Co-managers and advisors

Underwriters

Lead managers

Bankers

Brokers and principal brokers

Registrars

Stock exchanges.

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Players:

CHAPTER-3

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5

INDUSTRY PROFILE

INDUSTRY PROFILE
HISTORY OF THE STOCK EXCHANGE:
In 12 th century France the curators de change were concerned with managing and
regulating the debts of agricultural communities on behalf of the banks. As these men also traded
in debts. They could be called the first brokers.
Some stories suggest that the origins of the term bourse come from the Latin
bursa meaning a bag because, in 13e. Bruges, the sign of a purse hung on the front of the house
where mere chats met.
However, it is more likely that in the late 13 th century commodity traders in
Bruges gathered inside the house of a man called van deer Burse, and in 1309 they
institutionalized this until now informal meeting and became the Bruges Bourse. The idea
spread quickly around Flanders and neighboring counties and Bourse. Soon opened in Ghent
and Amsterdam.

In the middle of the 13 th century Venetian bankers began to trade in government

securities. In 1351, Ventetain Government outlawed spreading rumors intended intended to lower
the price of government funds. There were people in Pisa. Verona, Genoa and Florence who also
began trading in government securities during the 14th century. This was only possible because
these were independent city-states not ruled by a duke but a council of influential citizens.

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5

The Dutch later started joint stock companies, which let shareholders invest in
business ventures and get a share of their profits or losses. In 1602, the Dutch East India
Company issued the first shares on the Amstedam Stock Exchange. It was the first company to
issue stocks and bonds.

Stock exchange:
The market in which shares are issued and traded either through exchanges or over-the-counter
markets. Also known as the equity market, it is one of the most vital areas of a market economy
as it provides companies with access to capital and investors with a slice of ownership in the
company and the potential of gains based on the companys future performance.This market can
be split into two main sections : the primary and secondary market. The Primary market is where
new issues are first offered, with any subsequent trading going on in the secondary market.
Capital/securities market

I.

Primary Market
Secondary market

Primary Market : The new issue market represents the primary market where new
securities i.e., shares or bonds that have never been previously issued, are offered.
The main function of new issue market is to facilitate the transfer of resources from
savers to entrepreneurs. The securities issued by companies for the first time are
designated as initial issue or initial public offer (IPO). The new issue market activities
were regulated by controller of capital issue (CCI) under the Provisions of the capital
issues (control) act 1947. After the abolition of the office if the CCI in 1992 the
protection of the interest of the investors in securities market and promotion of the
development and regulation of the market/activity became the responsibility of SEBI.

Players in the primary market :

Merchant Banker / Book Building Lead Manager.
Register and transfer agent.
Collecting and coordinating bankers.
Advisor to the issue.
Underwriters / Broker to the issue.
Depository participant.

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Printers, Advertising Agencies, Mailing Agencies etc.

Initial public offerings (IPOs)

Corporate may raise capital in the primary market by way of an initial public offer, rights issue or
private placement. An initial public offer (IPO) is the selling of securities to the public in the
primary market. This initial public offering can be made through the fixed price method,
bookbuilding method or a combination of both. In case the issuer chooses to issue securities
through the book-building route then as per SEBI guidelines, an issuer company can issue
securities in the following manner:

a. 100% of the net offer to the public through the book-building route.
b. 75% of the net offers to the public through the book building process and 25%
through the fixed price portion.
c. Under the 90% scheme, this percentage would be 90 and 10 respectively.

Issue Mechanism : The following are the methods by which new issue/Initial Public Offering
(IPO) is made
1. Public issue through prospectus.
2. Offer for sale
3. Placement method
4. Right Issue and
5. Book Building
1. Public Issue through prospectus :
Under this method, the issuing companies themselves offer directly to the general public a fixed
number of shares at a stated price, which in the case of new companies is invariably the face
value of the securities, and in case of existing companies, it may include a premium amount if
any.
The contents of prospectus are as follows :
Name and registered office of the issuing company

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Board of Directors.

Authorized, subscribed and proposed issue of capital to public

Dates of opening and closing of subscription list.
Name of Broker, Underwriters, and others from whom application forms along withcopies of
prospectus can be obtained etc.
2. Offer for sale :
Another method by which securities can be issued is by means of an offer for sale. Under this
method, instead of the issuing company itself offering its shares directly to the public, it offers
through the intermediary of Issue houses/Merchant Banks/Investment Banks (or) firms of Stock
Brokers. The advantage of this method is that the issuing company is saved from the cost and
trouble of selling the share to the public.

3. Placement Method :
Sale by an issue house or brokers to their own clients of securities, which have been previously
purchased or subscribed. Under this method securities are acquired by the issue houses, as in
offer for sale method, but instead of being subsequently offered to the public, they are placed
with the clients of the issue houses, each issue house has a list of large private and institutional
investors who are always prepared to subscribe to any securities which are issued in this manner.

4. Rights Issue :
In this case if companies whose shares are already listed and widely held, shares can be offered
by the existing shareholders. This is called Rights Issue. Under this method, the existing
shareholders are offered the right to subscribe to shares in proportion to the number of shares
they already hold.

5. Book Building :

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Book Building is basically a capital issuance process used in Initial Public Offer (IPO), which
aids price and demand discovery. It is a process used for marketing a public offer of equity
shares of a company. It is a mechanism where, during the period for which the book for the IPO
is open, bids are collected from investors at various prices, which are above or equal to the floor
price. The process aims at tapping both wholesale and retail investors. The offer/issue price is
then determined after the bid closing date based on certain evaluation criteria.

The Process :
The issuer who is planning an IPO nominates a lead merchant banker as a book runner
The issuer specifier the number of securities to be issued and the price band for orders.
The issuer also appoints syndicate numbers with whom orders can be placed by the
investors.
Investors place their order with a syndicate member who inputs the orders into the
electronic book. This process is called bidding and is similar to open auction.
A book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
On the close of the book building period the book runner evaluates the bids on the basis of the
evaluation criteria which may include1. Price aggression
2. Investor quality
3. Earliness of bids, etc.
The book runner and the company conclude the final price at which it is willing to issue the
stock and allocation of securities.
Generally, the numbers of shares are fixed; the issue size gets frozen based on the price per
share discovered through the book building process.
Allocation of securities is made to the successful bidders.

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Book building is a good concept and represents a capital market, which is in the process of
maturing.

SEBI Guidelines

Securities and Exchange Board of India (SEBI) was initially established as a non-statutory body
in April 1998. For
a. Dealing with all matters relating to the development and regulation
b. Providing Investors Protection
SEBI was authorized to
1. To regulate all merchant banks on issue activity.
2. To lay guidelines, and supervise and regulate the working of mutual funds and
3. To oversee the working of stock exchange in India

Responsibilities of SEBI :

Regulating the business in stock exchange and other securities markets.

Registering and regulating the working of stockbrokers, sub-brokers, share transfer agents,
bankers to an issue, trustee of trust deals, underwriters, merchant bankers, portfolio managers,
and other intermediaries associated with the securities markets.
Registering and regulating of collective investment schemes including mutual funds.
Promoting and regulating the working of self-regulatory organizations.
Prohibiting fraudulent and unfair trade practices relating to securities markets.
Promoting investors education and training of intermediaries of securities market.
Prohibiting insiders trading in securities, and

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Regulating substantial acquisition of shares and takeover of companies.

II.

Secondary market :

In secondary market the securities (shares and debentures) already issued or existing are traded.
It is a market in which previously issued credit instrument are bought and sold.
Stock exchange :
Stock exchange is a market where stocks, shares and other securities are bought and sold. It is
market where the owners of securities can dispose them of as and when they desire. Stock
exchange has both primary and secondary functions. There are present 23 stock exchanges in the
country, which are recognized by the government under the securities contract (regulation) Act,
1956. 21 of them are regional ones. Two other exchanges
are set up in the reforms era they are
1. National Stock Exchange (NSE)
2. Over the counter Exchange of India (OTCET)

Bombay Stock Exchange (BSE) is the countrys leading exchange. All stock exchanges are
managed by governing body, which consists of elected broker director, public representatives,
and government/SEBI.
Role and functions of stock exchange :

A well-organized stock exchange performs a number of useful functions they are as follows :
An organized stock exchange operating under the well-defined rules and regulations
minimizes the dangers of speculative dealings and price manipulations.
Stock exchange provides a ready; market for trading securities and this helps in
mobilization of capital
Stock exchange helps in determining the price of securities.
Stock exchange facilitates the mobilization of savings of the surplus units.

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Stock exchange increases the credit worthiness of the business enterprises.

Other types of exchange:

In the 19 th century, exchanges were opened to trade forward contracts on
commodities. Exchange traded forward contracts are called futures contracts. These commodity
exchanges later started offering future contracts on other products on other products. Such as
interest rates and shares as well as options contracts. They are now generally known as futures
exchanges.
This is a list of stock exchanges. Those futures exchanges that also offer trading
in securities besides trading in futures contracts are listed both here and the List of futures
exchanges.

LIST OF STOCK EXCHANGES IN WORLD

CONTENTS:
1.
2.
3.
4.
5.
6.
USA:

North America
Europe
Asia
South America
Oceania
Africa

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1. Archipelago Exchange, merged with NYSE

2. Arizona Stock Exchange, closed down
3. American Stock Exchange (AMEX)
4. Boston Stock Exchange
5. Chicago Stock Exchange
6. Hedge Steel
7. NASDAQ
8. National Stock Exchange
9. New York Stock Exchange
10. Pacific Exchange (PCX)
11. Philadelphia Stock Exchange (PHLX)

INDIA:
1. Ahmedabad Stock Exchange
2. Bangalore Stock Exchange
3. Bhubaneswar Stock Exchange Association
4. Bombay Stock Exchange (BSE)
5. Calcutta Stock Exchange
6. Coimbatore Stock Exchange
7. Delhi Stock Exchange Association
8. Gauhati Stock Exchange
9. Hyderabad Stock Exchange
10. Inter-connected Stock Exchange of India
11. Jaipur Stock Exchange
12. Ludhiana Stock Exchange Association
13. Madhya Pradesh Stock Exchange
14. Mangalore Stock Exchange
15. Mumbai Stock Exchange
16. National Stock Exchange of India (NSE)
17. OTC Exchange of India
18. Pune Stock Exchange
19. Saurashtra-Kutch Stock Exchange

INDIAN EXCHANGES: NSE and BSE (Article from Capital Market)

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The NSE and BSE are among the largest exchanges in the country handling very large daily
trading volumes, support large amounts of data traffic, and have a very large nationwide
network. The trading volume in year 2000 was huge with the average daily turnover in the
capital markets segment at NSE is around Rs 2300 crores and in the derivatives segment, around
Rs 1300 crores. The average daily traffic volume was around one million trades per day in the
capital markets segment and around 50,000 trades per day in the derivatives segment and there
were around 13,000 registered users in both segments and an average of around 9500 users is
logged in at a time. At BSE the average daily turnover in 2001-2002 (April-March) was Rs
1244.10 crores and the number of average daily trades was Rs 5.17 lakh.

HISTORY OF BSE:
Indian has a long history of securities markets, which is largely driven by BSE, the Stock
Exchange, and Mumbai. An indigenous enterprise set up about 130 year ago amidst the backdrop
of British supremacy in international finance: BSE has been the hallmark of Indias initiative into
high street finance more than a century ago.
As chequered and exciting its more than a century of existence has been, equally swift and
smooth was the transformation of BSE into one of the most modern stock exchanges in the Asian
region. It has several firsts to its credit even in the intensely competitive environment.
BSE was first to introduce concepts such as free float indexing, obtain ISO certification for
surveillance, establish huge infrastructure to enhance knowledge and know-how, put in place a
trading platform that works on a sub second response time and capacity of 4 million trades a day,
export of trading platform technology to other stock exchange in Middle east, report highest
delivery ratio among the major exchanges, lowest transaction costs, a record of lowest defaults,
offer highest compensation for investor in cases of valid and approved claims.
The origin of the Bombay (Mumbai) Stock Exchange dated back to 1875. it was organized under
the name of the Native Stock and Share Brokers Association as a voluntary and non- profit
making association. It as recognized on a permanent basis in 1957. This premier stock exchange
is the oldest stock exchange in Asia.
NSE-50 INDEX ( NIFTY )
This Index is built by India Services Product Ltd (IISL) and Credit Rating Information Services
of India Ltd (CRISIL). NSE-50 Index was introduced on April 22, 1996 to serve as an
appropriate index for the new segment of futures and options.
Nifty means National Index for Fifty Stocks.
The selection criteria are the market capitalization and liquidity. The market capitalization of the
companies should be Rs. 5 billion or more. The company scrip should be traded for 85% of the
trading days at an impact cost less than 1.5%.
The base period for the Nifty index is the closing prices on November 3, 1995.
The base period is selected to commensurate the completion of one year operation of NSE in
the stock market. The base value of index at 1000 with the base capital of Rs.2.06 of trillion.

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The NSE Madcap Index or the Junior Nifty comprises 50 stocks that represents 21 board
industry groups and will provide proper representation of the madcap segment of greater than
Rs.200 crores and should have traded 85% of trading days at an impact cost of less than 2.5%.

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CHAPTER-4

About Us
The Zen securities is listed on both the leading stock exchanges in India, viz. We are a one-stop
financial services shop, most respected for quality of its advice, personalised service and cuttingedge technology.
Vision
Our vision is to be the most respected company in the financial services space.
Zen securities group:
The Zen securities group, g the holding comprising company, and its wholly-owned subsidiaries,
straddle the entire financial services space with offerings ranging from Equity research, Equities
and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds,
Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan products
and Investment banking the Stock Exchange, Mumbai (BSE) and the National Stock Exchange
(NSE) and is also a member of both the exchanges. It is engaged in the businesses of Equities
broking, Wealth Advisory Services and Portfolio Management Services. It offers broking
services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the
BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a onestop solution for clients trading in the equities market. It has recently launched its Investment

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banking and Institutional Broking business.

ZENS MUTUAL FUND SERVICES - HIGHLIGHTS

One stop shop for a range of Mutual fund products from top Mutual funds such as HDFC,
ICICI Prudential, Birla sun life, Franklin Templeton, Reliance , HSBC, Sundaram BNP
Paribas, Fidelity and many more

Cost-effective, prompt and trustworthy service

Facility to view your account information online 24 X 7, Updates every day.

You can view your latest Holding statement

You can view your latest transaction statement

You can view value of all your mutual funds in one consolidated statement

Easy and convenient application process

Good Advice keeping your financial goals in mind

Offline presence in various locations convenient to you for better service

Zen is a depository participant offering flexible, cost effective and transparent depository
services to its clients .Zen is a depository participant with the National Securities Depository
Limited and Central Depository Services (India) Limited for trading and settlement of
dematerialised shares.
Zen Depository Services is a part of our value added services for our clients that creates multiple

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interfaces with the client and provides for a solution that takes care of all your needs.

BOARD OF DIRECTORS

Mr. Pratap Kantheti, Managing Director

Mr. Satish Kantheti, jt. Managing Director

Mr. Sambasiva Rao, Executive Director

Rate of Return
As per SEBI regulations, returns cannot be guaranteed. Our endeavor will be not only to beat
benchmark indices like the Nifty but also perform better than our peers in the industry.

Reports
All portfolio clients will receive a Portfolio Performance Report on a monthly basis and a
Transaction Statement along with a statement comparing the performance of the portfolio to the
benchmark indices on a quarterly basis.

Market watch

Streaming market quotes.

Multiple market watch.

Integrated market watch for viewing NSE / BSE / NSE FAO on one screen.

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Access to trade in NSE / BSE and NSE FAO Segments

CHAPTER-5

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DATA ANALYSIS & INTERPRETATION

JP INFRA

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IPO VALUATION

ABOUT JP INFRA:
Incorporated in 2007, Jaypee Infratech Limited (JIL) is an Indian infrastructure development company
engaged in the development of the Yamuna Expressway and related real estate projects.
Jaypee Infratech Limited (JIL) is a part of the Jaypee Group and incorporated as a special purpose
company to develop, operate and maintain the Yamuna Expressway in the state of Uttar Pradesh,
connecting Noida and Agra. The Yamuna Expressway is a 165-kilometre access-controlled six-lane
concrete pavement expressway along the Yamuna river, with the potential to be widened to an eight-lane
expressway. The expressway is planned to begin at the existing Noida-Greater Noida Expressway, pass
through various proposed SDZs and the proposed Taj International Hub Airport and end at District Agra.
The company also has the right to develop 25 million square metres (approximately 6,175 acres) of land
along the Yamuna Expressway at five locations for residential, commercial, amusement, industrial and
institutional purposes.
The Company commenced development of Noida land parcel and are presently developing an aggregate
13.09 million square feet of saleable area across three residential projects, which were approximately
88% sold on a square foot basis as of October 31, 2009. These three projects were launched between
November
2008 and July 2009 and are expected to be completed by 2012. Through October 31, 2009, their average
selling price for property under development was approximately Rs. 3,057 per square foot (including
Extra Charges).
Company Promoters:
Companys promoter, since its inception, is Jaiprakash Associates Limited (JAL). JAL is engaged
primarily in the business of (a) engineering and construction, (b) manufacture and marketing of cement,

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(c) real estate development, and (d) hospitality.

Company Financials:
Particulars

For the year/period ended (Rs. in million)

30-Sep-12

31-Mar-12

31-Mar-13

Total Income

276.45

5,562.57

7.66

Profit After Tax (PAT)

103.20

2,667.31

(113.69)

Objects of the Issue:

The object of the issue are:
1. To partially finance the Yamuna Expressway Project; and
2. General corporate purposes.
Issue Detail:
Issue Open: Apr 29, 2014 - May 04, 2014
Issue Type: 100% Book Built Issue IPO
Issue Size: 161,764,706 Equity Shares of Rs. 10
Issue Size: Rs. 1,650.00 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 102 - Rs. 117 Per Equity Share
Market Lot: 50 Shares
Minimum Order Quantity: 50 Shares
Listing At: BSE, NSE
Jaypee Infratech Ltd IPO Grading / Rating
ICRA and CARE has assigned an IPO Grade 3 to Jaypee Infratech Ltd IPO. This means as per ICRA and
CARE company has 'Average Fundamentals'. ICRA and CARE assigns IPO grading on a scale of 5 to 1,
with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals. Click here to

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download the ICRA and CARE IPO Grading Document for Jaypee Infratech Ltd.

Bidding Status (IPO subscription detail):

Number of Times Issue is Subscribed (BSE + NSE)

As on Date & Time

Qualified
Non
Institutional
Institutional
Buyers
Investors
(QIBs)

Retail
Individual
Investors
(RIIs)

Others

Total

Shares Offered / Reserved

119,752,941

19,958,824

59,876,470

22,176,470

221,764,705

Day 1 - Apr 29, 2014 17:00 IST 1.5264

0.1027

0.0156

0.0027

0.8400

Day 2 - Apr 30, 2014 17:00 IST 1.5342

0.3103

0.0480

0.0326

0.8700

Day 3 - May 03, 2014 17:00

1.6273
IST

0.3490

0.1208

0.0444

0.9500

Day 4 - May 04, 2014 18:15

1.7710
IST

1.1544

0.6113

0.1006

1.2400

IPO Listing Detail

Listing Date:

Friday, May 21, 2014

BSE
Scrip 533207
Code:

Listing In:

'B' Group of Securities

Sector:

Infrastructure

ISIN:

INE099J01015

Issue Price:

Rs. 102.00 Per Equity Share

Face Value:

Rs. 10.00 Per Equity Share

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NSE Symbol: JPINFRATEC

Listing Day Trading Information

NSE
BSE

Rs. 102.00

Issue Price:

Rs. 102.00

Open:

Rs. 93.00

Low:

Rs. 90.00

High:

Rs. 98.50

Last Trade:

Rs. 91.30

Volume:

16,051,602

Rs. 98.00
Rs. 90.00
Rs. 98.80
Rs. 91.45
36,263,455

Registrar of the Issue

Karvy Computershare Private Limited
Book Running Lead Manager(s)
1. Axis Bank Limited
2. DSP Merrill Lynch Limited
3. Enam Securities Private Limited
4. ICICI Securities Limited
5. Morgan Stanley India Company Pvt Ltd

JP Associates Group Company Jaypee Infratech is open for subscription in $500 mn IPO. JP
Associates is the ~100% Promoter of Jaypee Infratech. The company holds the concession from
the Yamuna Expressway Industrial Development Authority (YEA) to develop, operate and
maintain the Yamuna Expressway in Uttar Pradesh, connecting Noida and Agra (165km). The
concession also provides for the right to develop 25 million square metre (approximately 6,175
acres) of land along the Yamuna Expressway at five locations for residential, commercial,

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amusement, industrial and institutional purposes.

Key Strengths:

The Management under its founder Shri. Jaiprakash Gaur is extremely Strong and this is evident
from the fact that they subscribed to the Preferential Allotment of JP Associates at a whopping Rs
397 while the market price was mere Rs 87.

JP Groups expertise in executing Large Infrastructure projects is a big plus

Unique Business Model Tool Revenues + Real Estate Revenues

Single State Location for Entire Expressway

With Regional Growth Prospects of NCR rising year after year, JP Group will benefit the most
unveiling a whole new living experience in modern infrastructure

Key Concerns

Long Gestation Period

Government of Uttar Pradesh Policies

Traffic Lower than forecast and competition by other nearby roads

BASIS OF ALLOTMENT
PUBLIC ISSUE OF 222,933,497 EQUITY SHARES OF FACE VALUE OF RS. 10 EACH ("EQUITY
SHARES") OF JAYPEE INFRATECH LIMITED (THE "COMPANY" OR THE "ISSUER") FOR CASH
AT A PRICE OF RS. 102* PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS. 92 PER
EQUITY SHARE) AGGREGATING RS. 22,576 MILLION (THE "ISSUE") CONSISTING OF A
FRESH ISSUE OF 162,933,497 EQUITY SHARES BY THE COMPANY AT THE ISSUE PRICE
AGGREGATING RS. 16,500 MILLION ("FRESH ISSUE") AND AN OFFER FOR SALE OF
60,000,000 EQUITY SHARES ("OFFER FOR SALE") BY JAIPRAKASH ASSOCIATES LIMITED
(THE "SELLING SHAREHOLDER"). THE ISSUE INCLUDES A RESERVATION OF 2,349,600
EQUITY

SHARES

FOR

THE

ELIGIBLE

SHAREHOLDERS

(THE

"SHAREHOLDERS

RESERVATION PORTION"). THE ISSUE LESS THE SHAREHOLDERS RESERVATION PORTION

IS REFERRED TO AS THE "NET ISSUE". THE ISSUE WILL CONSTITUTE 16.05% OF THE FULLY
DILUTED POST-ISSUE PAID-UP CAPITAL OF THE COMPANY AND THE NET ISSUE WILL
CONSTITUTE 15.88% OF THE FULLY DILUTED POST-ISSUE PAID-UP CAPITAL OF THE

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COMPANY.

ISSUE PRICE: RS 102* PER EQUITY SHARE*

a discount of 5% to the Issue Price determined pursuant to completion of the Book Building
Process has been offered to Retail Individual Bidders whose Bid amount does not exceed Rs.
100,000/- (the "Retail Discount")
THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 AND THE ISSUE PRICE IS 10.2
TIMES THE FACE VALUE
Pursuant to Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR")
read with Regulation 41(1) of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009, as amended (the "SEBI Regulations"), this being an Issue
for less than 25% of the post-Issue share capital, is being made through the 100% Book Building Process
wherein at least 60% of the net Issue was to be allocated on a proportionate basis to Qualified
Institutional Buyers ("QIBs") (including 5% of the QIB portion that was to be specifically allotted to
mutual funds), further, not less than 10% of the net Issue shall be available for allocation on a
proportionate basis to Non-Institutional Bidders and not less than 30% of the net Issue shall be available
for allocation on a proportionate basis to Retail Bidders, subject to valid bids being received at or above
the Issue Price.
The Issue received 128,212 applications for 268,725,383 Equity Shares resulting in 1.20@ times
subscription. The details of the applications received in the Issue, through the various escrow collection
banks, from QIBs, Non-Institutional Bidders, Retail Individual Bidders and Eligible Shareholder
categories are as under: (Before technical rejections)
No.
Applications

of No.
of
Shares

Equity No.
of
subscription@

A Retail Individual Bidders

121,412

32,465,083

0.53

Non Institutional Bidders

432

21,498,550

1.06

Qualified
Bidders

55

212,081,000

1.75

6,313

2,680,750

0.12

128,212

268,725,383

1.20

Institutional

D Eligible Shareholders
Total

times

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Category

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@ For the purposes of deciding the allotment, the total numbers of Equity Shares to be issued as
per Prospectus and consequently the size of the Retail Individual Bidders, Non Institutional
Bidders & Qualified Institutional Bidders category were recomputed to give effect, inter alia, to
the under subscription in the Eligible Shareholders Portion and the 5% discount to the Retail
Individual Bidders. For the purpose of calculating the subscription details, the sizes of the
category as per the Prospectus have been used.

Summary Final Allocation:

Gross Collections

Less: Rejections

Valid
Applications

Total Allotment

Total
Issue
Amount
Rs.

Applica Shares
tion

Applica Share
tion
s

Applica Shares
tion

Applica Shares
tion

Retail
Individu
al
Bidders

121,412

32,465,
083

1,831

481,1
33

119,581

31,983,
950

119,581

31,983,
950

3,099,244
,755

Non
Instituti
onal
Bidders

432

21,498,
550

32

392,8
50

400

21,105,
700

400

21,105,
700

2,152,781
,400

Qualifie
d
Instituti
onal
Bidders

55

212,081
,000

55

212,081
,000

55

167,494
,247

17,084,41
3,194

Eligible
Shareho
lders

6,313

2,680,7
50

368

331,1
50

5,945

2,349,6
00

5,945

2,349,6
00

239,659,2
00

Total

128,212

268,725
,383

2,231

1,205,
133

125,981

267,520
,250

125,981

222,933
,497

22,576,09
8,549

8
5

Categor
y

Final Demand
A summary of the final valid demand at different bid prices is as under:
No.
of
Shares

102

37,327,400

13.65%

273,482,700

100.00%

103

91,360,100

33.41%

238,080,550

87.06%

104

1,178,000

0.43%

147,821,550

54.05%

105

85,957,750

31.43%

147,734,450

54.02%

106

22,150

0.01%

62,081,750

22.70%

107

603,450

0.22%

62,074,850

22.70%

108

430,600

0.16%

61,494,650

22.49%

109

11,350

0.00%

61,081,450

22.33%

110

3,234,650

1.18%

61,078,450

22.33%

111

111,550

0.04%

60,470,900

22.11%

112

47,650

0.02%

60,454,600

22.11%

113

10,150

0.00%

60,427,550

22.10%

114

56,500

0.02%

60,424,600

22.09%

115

66,800

0.02%

60,420,600

22.09%

116

12,100

0.00%

60,371,700

22.08%

22.52%

60,366,300

22.07%

117 (including cut- 61,588,200

off)

Equity %
total

to Cumulative
Total

Cumulative
Total

of

8
5

Bid Price

The Basis of Allocation was finalized in consultation with the Designated Stock Exchange, being the
National Stock Exchange of India Limited ("NSE") on May 14, 2014.
A. Eligible Shareholders
The Basis of Allocation to the Eligible Shareholders of Jaypee Infratech Ltd, who have bid at the Issue
Price of Rs.102/- per Equity Share, was finalized in consultation with NSE. The total number of Equity
Shares allotted in this category is 2,349,600. The un-subscribed portion of Equity Shares in the
Shareholders Reservation Portion has been added to the net offer and made available to Qualified
Institutional Bidders, Non Institutional Bidders and Retail Individual Bidders in the ratio of 60:10:30.
B. Allocation to Retail Individual Bidders (Including ASBA Applications) (After Technical
Rejections)
The Basis of Allocation to the Retail Individual Bidders, who have bid at the Issue Price of (net of retail
discount of 5% per Equity Share) Rs.96.90/- per Equity Share or above, was finalized in consultation with
NSE. This category has been subscribed to the extent of 0.53 times and hence allotment was done on full
and firm basis to all valid applicants. Overall 119,581 applications for 31,983,950 Equity Shares were
found valid and they were considered for allotment. The above includes 26,324 valid applications for
7,011,750 Equity Shares made under the ASBA process. The total number of Equity Shares allotted in
Retail Individual Bidders category is 31,983,950 Equity Shares to 119,581 applicants. The retail discount
portion was taken up by the Issuer and the Selling Shareholder in the proportion of the gross amounts
raised under the Issue. The un-subscribed Equity Shares in the retail category pertaining to the Issuer
were converted at Rs. 102/- per Equity Share and added to Qualified Institutional Bidders and Non
Institutional Bidders category in the ratio of 6:1.
C. Allocation to Non Institutional Bidders (After Technical Rejections)
The Basis of Allocation to the Non-Institutional Bidders, who have bid at the Issue Price of Rs.102/- per
Equity Share, was finalized in consultation with NSE. Post adjustment for the under subscription in
Eligible Shareholders Category and Retail Individual Bidders Category, this category was subscribed less
than 1.00 times and hence allotment was done on full and firm basis to all valid applicants. Overall 400
applications for 21,105,700 Equity Shares were found valid and they were considered for allotment. The
total number of Equity Shares allotted in this category is 21,105,700 to 400 applicants. The Un-subscribed

8
5

portion in this category was added to Qualified Institutional Bidders category.

D. Allocation to Qualified Institutional Bidders

The Basis of Allocation to the Qualified Institutional Bidders, who have bid on or above the Issue price of
Rs.102/- per Equity Share was finalized on proportionate basis. Overall 55 applications for 212,081,000
Equity Shares were found valid. After adjustment for Retail Discount and under subscription in other
categories, 167,494,247 Equity Shares were available for allocation to this category and were allotted
proportionate basis after allotment of 5% of total allotment in this category on proportionate basis to
Mutual Funds.
Category

Fls/Banks

Flls

MFs

ICs

PFs

Others

Total QIBs

No. of Equity Shares

81,292,030

9,854,953

10,323,795

66,023,469

Nil

Nil

167,494,247

The IPO committee of the Company; at its meeting held at NOIDA (UP) on May 14, 2010 has approved
the basis of allocation of Equity Shares of the Issue and has allotted the Equity Shares to various
successful applicants. The electronic upload of Equity Shares has been completed on May 15, 2010. The
dispatch of CAN-cum-Refund Orders and Refund credit advice to the address of the investors as
registered with the depositories and uploading of ECS/NEFT/RTGS/Direct Credits have been completed
on May 17, 2010. In case the same is not received within ten days, investors may contact at the address
given below. The Refund Orders have been over-printed with the Bank Account details as registered, if
any, with the depositories. The Equity Shares allocated to successful applicants have been credited to their
beneficiary accounts subject to validation of the account details with the depositories concerned.
The Company has obtained the listing and trading permission from the Bombay Stock Exchange Limited
and the National Stock Exchange of India Limited and the Equity Shares allotted are tradable on these

8
5

stock exchanges w.e.f., May 21, 2014.

8
5

DQ Entertainment Limited

DQ Entertainment (International) Limited

(Our company was incorporated on April 13, 2007 as "Animation and Multimedia Private Limited" in
Hyderabad, Andhra Pradesh. The name of our Company was change to "DQ Entertainment (International)
Private Limited" by a special resolution passed at the EGM held on January 10, 2008. The status of our
Company was changed to a public limited company by a special resolution of the members passed at an
EGM held on July 25, 2009. The fresh certificate of incorporation consequent on change of status from
private to public was granted to our Company on September 10,2009 by the RoC, Andhra Pradesh located
at Hyderabad.)
Incorporated in 2007, DQ Entertainment (International) Limited is one of the leading producers of
animation, visual effects, game art and entertainment content for the Indian as well as global media and
entertainment industry. They are a producer, co-producer and global distributor of TV series, direct-tohome videos and feature films. DQ Entertainment is also creators of game art for online, mobile and nextgeneration consoles. They have forayed into production and distribution of live action television and
feature films.
DQ Entertainment with its Production, Sales, Licensing and Distribution centers in Hyderabad, Chennai,
Mumbai, Kolkata, Manila, Ireland, Paris, Los Angeles and Japan with work force of 3500+(2788
permanent employees and 712 freelancers and trainees).

Company Promoters:

The individual promoters of the Company are:

1. Mr. Tapaas Chakravarti is the Chairman, Managing Director and Chief Executive Officer.
2. Ms. Rashmi Chakravarti is the Executive and Non-Independent Director.
3. Mr. Kunchithapadam Balasubramanian is the Non-executive and Independent Director.

8
5

4. Mr. Girish Kulkarni is the Non-Executive and Non-Independent Director.

Company Financials:
Particulars

For the year/period ended (Rs.in Millions)

31-Mar-14

31-Mar-13

Total Income

1,509.08

945.73

Profit After Tax (PAT)

161.50

70.09

Objects of the Issue:

The object of the issue are to:
1. Investment in co-production agreements, focusing on IP content creation;
2. Development of office premises and production facilities; development of infrastructure and additional
facilities at the SEZ Unit, Kokapet Village, Rangareddy District, Andhra Pradesh;
3. Investment in subsidiary, DQ Entertainment(Ireland) Limited; and
4. General corporate purposes.
Issue Detail:
Issue Type: 100% Book Built Issue IPO
Issue Size: 16,048,011 Equity Shares of Rs. 10
Issue Size: Rs. 128.38 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 75 - Rs. 80 Per Equity Share
Market Issue Open: Mar 08, 2014 - Mar 10, 2014
Lot: 80 Shares
Minimum Order Quantity: 80 Shares
Listing At: BSE
DQ Entertainment (International) Ltd IPO Grading / Rating
Fitch has assigned an IPO Grade 3 to DQ Entertainment (International) Ltd IPO. This means as per Fitch,
company has 'Average Fundamentals'. Fitch assigns IPO gradings on a scale of 5 to 1, with Grade 5

8
5

indicating strong fundamentals and Grade 1 indicating poor fundamentals

Bidding Status (IPO subscription detail):

Number of Times Issue is Subscribed (BSE + NSE)
As on Date & Time

Qualified
Non
Institutional Institutional
Buyers
Investors
(QIBs)

Retail
Individual
Investors
(RIIs)

Employee
Total
Reservations

Shares Offered / Reserved

6,605,340

1,572,700

4,718,100

321,011

13,217,151

Day 1 - Mar 08, 2010 17:00

IST

1.2003

0.0013

0.2431

0.0037

0.6900

Day 2 - Mar 09, 2010 17:00

IST

6.4708

0.0519

0.9348

0.0125

3.5700

Day 3 - Mar 10, 2010 18:30

IST

93.8605

272.8808

19.4468

0.3636

86.3279

IPO Listing Detail

Listing Date:

Monday, March 29, 2014

BSE
Scrip 533176
Code:
NSE Symbol:
Listing In:

B Group

ISIN:

INE656K01010

Issue Price:

Rs. 80.00 Per Equity Share

Face Value:

Rs. 10.00 Per Equity Share

8
5

Sector:

Listing Day Trading Information

BSE
Issue Price:

Rs. 80.00

Open:

Rs. 135.00

Low:

Rs. 106.55

High:

Rs. 140.00

Last Trade:

Rs. 108.55

Volume:

39,945,184

BASIS OF ALLOTMENT
PUBLIC ISSUE OF 16,048,011 EQUITY SHARES OF RS.10 EACH OF DQ ENTERTAINMENT
(INTERNATIONAL) LIMITED (OUR "COMPANY" OR THE "ISSUER") FOR CASH AT A PRICE
OF RS.80/- PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS.70/- PER EQUITY
SHARE), AGGREGATING RS.1281.59 (THE "ISSUE") MILLION. THE ISSUE INCLUDES A
RESERVATION OF UP TO 321,011 EQUITY SHARES OF RS.10/-EACH FOR ELIGIBLE
EMPLOYEES (THE "EMPLOYEE RESERVATION PORTION") FOR CASH AT A PRICE OF RS.73/PER EQUITY SHARE (INCLUDING ASHARE PREMIUM OF RS. 63/- PER EQUITY SHARE). THE
ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS REFERRED TO AS THE "NET ISSUE".
THE ISSUE WOULD CONSTITUTE 20.24% OF THE POST ISSUE PAID-UP CAPITALOF OUR
COMPANY AND THE NET ISSUE WILL CONSTITUTE 19.84% OF THE POST ISSUE PAID UP

8
5

CAPITAL OF OUR COMPANY

THE FACE VALUE PER EQUITY SHARE IS RS. 10 EACH. THE ISSUE PRICE PER EQUITY
SHARE IS RS. 80/- OR 8 TIMES THE FACE VALUE.
The Issue has been made through the 100% Book Building Process wherein atleast 60% of the Net Issue
shall be allocated to QIBs, of which 30% shall be available for allocation on a discretionary basis to
Anchor Investors at the Anchor Investor Issue Price. Out of the net QIB Portion (QIB Portion less
allocation to Anchor Investors), atleast 5% shall be availablefor allocation to Mutual Funds only and the
remainder shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds,
subject to valid bids being received at or above the Issue Price. Further, upto 10% of the Net Issue shall
be available for allocation on a proportionate basis to Non Institutional Bidders and upto 30% of the Net
Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to
valid bids being received at or above the Issue Price.
The Issue received 118,634 applications for 1,120,267,715 Equity Shares resulting in 69.80 times
subscription. The details of the applications received in the Issue from Qualified Institutional Buyers,
Non-Institutional, Retail Individual Investors categories and Employees are as under: (Before technical
rejections)
No.
of No.
Applications
Shares

of Amount Rs.

No. of times
subscription

A Public
(including
Retail 118261
Individual Bidders and NonInstitutional Bidders)

491211475

39298133225 78.08

137

619726160

5037308160

93.82

C Employees

229

187520

15001600

0.58

D Anchor Investors

9142560

264046400

3.23

118634

1120267715

44614489385 69.80

Qualified Institutional Bidders

(Excluding Anchor Investors)

Total

8
5

Category

Final Demand
A summary of the final demand as per the BSE and the NSE as on the Bid/ Issue Closing Date at different
bids is as detailed hereunder:
Bid Price

No. of Shares

% to total

Cumulative Total

Cumulative % of Total

75

223440

0.02

1140978240

100.00

76

7040

0.00

1140754800

99.98

77

6720

0.00

1140747760

99.98

78

95440

0.01

1140741040

99.98

79

2800

0.00

1140645600

99.97

80

1140642800

99.97

1140642800

99.97

The Basis of Allocation was finalized in consultation with the Designated Stock Exchange, being the
Bombay Stock Exchange Limited ("BSE") on March 22,2010.

A.Employees
The Basis of A llocation to the employees of the DQ Entertainment (International) Ltd, who have bid at
cut-off or at the Issue Price of Rs.80/- per Equity Share, was finalized in consultation with BSE. The total
number of shares allotted in this category is 172,960 at a price of Rs. 73/- per Equity Share in terms of the
Prospecuts. The unsubscribed portion of 148,051 equity shares has been added back to the Net Issue.
B. Allocation to Retail Individual Investors (After Technical Rejections)

The Basis of Allocation to the Retail Individual Bidders, who have bid at cut-off or at the Issue Price of
Rs.80/- per Equity Share, was finalized in consultation with BSE. This category has been over-subscribed
to the extent of 18.86 times. Of the total applications received in the category, 116,692 applications for
89,874,195 Equity Shares were found valid and they were considered for allotment. The total number of
Equity Shares allotted in Retail Individual Bidders category is 4,762,560 (including 44,460 Equity Shares
being 30% of the unsubscribed portion of the Employee Reservation Portion) to 59,532 applicants. The

8
5

category-wise details of the Basis of Allocation are as under:

Category No.
Of % to Total No. of % of No.
Applications
total
Equity Shares total
Equity
applied
Shares
allocated

of Ratio Total No. of

Equity Shares
allocated

80

19046

16.32

1523680

1.70

80

3:56

81600

160

9489

8.13

1518240

1.69

80

5:47

80720

240

5726

4.91

1374240

1.53

80

4:25

73280

320

3805

3.26

1217600

1.35

80

3:14

65200

400

3929

3.37

1571600

1.75

80

4:15

83840

480

1673

1.43

803040

0.89

80

5:16

41840

560

4372

3.75

2448320

2.72

80

15:41

128000

640

2675

2.29

1712000

1.91

80

17:40

90960

720

709

0.61

510480

0.57

80

19:40

26960

800

1825

1.56

1460000

1.62

80

8:15

77840

880

442

0.38

388960

0.43

80

23:40

20320

960

630

0.54

604800

0.67

80

5:8

31520

1040

433

0.37

450320

0.50

80

11:16

23840

1120

524

0.45

586880

0.65

80

3:4

31440

1200

61414

52.63

73696800

82.01

80

31:39

3905200

C. Allocation to Non Institutional Investors (After Technical Rejections)

The Basis of Allocation to the Non-Institutional Investors, who have bid at the Issue Price of Rs.80/- per
Equity Share, was finalized in consultation with BSE. This category has been over-subscribed to the
extent of 250.80 times. 204 applications for 400,658,240 Equity Shares were found valid and they were
considered for allotment. The total number of Equity Shares allotted in this category is 1,587,460
(including 14,760 Equity Shares being 10% of the unsubscribed portion of the Employee Reservation
Portion) to 169 successful applicants. The category-wise details of the Basis of Allocation (sample) are as

8
5

under:

Category

No.
of % to Total No. of % of No. of Equity Ratio
Applications
total Equity Shares total
Shares
applied
allocated

Total No. of
Equity Shares
allocated

1280

12

5.88

15360

0.00

80

1 :12

80

2560

1.47

7680

0.00

80

1:3

80

4800

0.98

9600

0.00

80

1 :2

80

25040

0.49

25040

0.01

100

FIRM 100

50000

0.49

50000

0.01

199

FIRM 199

125040

0.98

250080

0.06

499

FIRM 998

300000

0.49

300000

0.08

1196

FIRM 1196

2500000

1.47

7500000

1.88

9968

FIRM 29904

12896080 5

2.45

64480400

16.20

51382

FIRM 256910

13217120 1

0.49

13217120

3.32

52657

FIRM 52657

D. Allocation to QIBs (excluding Anchor Investor Portion)

A total of 6,694,171 Equity Shares were allocated to QIBs has been done on a proportionate basis in
consultation with BSE (including 88,831 equity shares being 60% of the unsubscribed portion of the
Employee Reservation Portion were added to the QIB category). In accordance with the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 Mutual
Funds were initially allotted 5% of the QIB Portion (excluding Anchor Investor Portion) i.e. 334,709
Equity Shares. The balance QIB portion, being 6,359,462 Equity Shares, was allocated on a proportionate

Category

Fls/Banks

Flls

MFs

ICs

VCs/FVCIs

Total

No. of Equity Shares allocated

1188085

3875251

1260397

44919

325519

6694171

8
5

basis to all QIBs including Mutual Funds.

E. Anchor Investors

The Company allocated 2,830,860 Equity Shares to 7 Anchor Investors on a discretionary basis in
consultation with the Book Running Lead Manager. The IPO Committee of the Board of Directors of the
Company at its Meeting held at Hyderabad on March 23, 2014 has approved the basis of allocation of
Equity Shares of the Issue and has accordingly allotted the Equity Shares to all the successful Bidders.
The CAN-cum-Refund Orders and allotment advice and/ or notices have been dispatched to the address
of the Bidders as registered with the depositories on or prior to March 25, 2014. Further, the instructions
to Self Certified Syndicate Banks for unblocking of ASBA accounts have been dispatched on March 23,
2014. In case the same is not received within 10 days, investors may contact at the address given below.
The Refund Orders have been over-printed with the Bank Account details as registered, if any, with the
depositories. The Equity Shares allocated to successful applicants are being credited to their
beneficiary accounts subject to validation of the account details with the depositories concerned.
The Company has filed an application for listing with Bombay
Book Running Lead Manager
1. SBI Capital Markets LimiteD
Registrar of the Issue:

8
5

Karvy Computershare Private Limited

8
5

UBI

Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 on July

MUMBAI, INDIA (GaeaTimes.com)- UBI or United Bank of India is betting high on the success
of its IPO. It has plans to raise almost 3.3 billion INR from it. The bank, based in Kolkata,
planned to sell around 50 million shares between 60 to 66 INR a piece. This was communicated
to the reporters by its Chairman Satish Gupta. The revenue will help this bank to cater to the
demand for loans which is only going up with time. The Chairman of the bank also said a few
days back that UBI would be able to retain the success rate it has been getting for the last few
years in the days to come. The bank has over 20 million account holders in the 28 states of the
nation. From the response to its IPO it seems that the plans of the bank will be fulfilled.
The NSE has made it clear that the United Bank of India IPO has received bids for all its shares
put on sale. It is evident from the NSE data. The issue of 50 million shares has got bids for over
58 million shares, as per the data. The issue will be closed on Thursday. After the issue, the stake
of the government in UBI will go down from 100 percent to 84.2 per cent, as it is being
estimated.
While the initial response to the United Bank of India IPO has been pretty encouraging, the
outcome will be clear on Thursday. The financial analysts are monitoring the reactions to the IPO
closely.
United Bank of India is a public sector banking institution with branches in 28 States and in 4 Union
Territories in India. The Bank is currently wholly-owned by the Government of India. As of December
18, 2009, they had 1,484 branches, 265 ATMs, 28 regional offices and 11 extension counters. United
Bank is in the process of opening a representative office in Dhaka, Bangladesh. As of December 18, 2009,
company had a workforce of 15,813 employees (including part-time employees). United Bank of India is
one of the 14 banks which were nationalised on July 19, 1969.
United's business is principally divided into retail banking, corporate / wholesale banking, priority sector
banking, treasury operations and other banking services such as agency functions for insurance and
mutual fund distribution, pension and tax collection services. Their retail banking business provides
financial products and services to retail customers. United Bank provide loans and advances for housing,
trade, automobiles, consumer durables, education, personal loans and other retail products. Also they

8
5

provide commercial banking products and services to corporate customers, including mid-sized and small

businesses and government entities. They offer direct financing to farmers for production and investment,
as well as indirect financing for infrastructure development and credit to suppliers of agricultural inputs.
In Fiscal 2009, company made a net profit of Rs. 358.55 crore and had net assets of Rs. 61,500.78 crore
and net worth of Rs. 2,537.83 crore. As of September 30, 2009, they made a net profit of Rs. 231.10 crore
and had net assets of Rs. 71,952.25 crore and net worth of Rs. 2,769.87 crore. They have experienced
growth in deposits and advances, with deposits growing at a compounded annual rate of 21.1% during the
last five fiscal years and net advances growing at a compounded annual rate of 32.8% during the same
period.
Company Financials:
Particulars

For the year/period ended (Rs.in Crore)

30-Sep-14

31-Mar-14

31-Mar-13

31-Mar-12

31-Mar-11

Total Income

2,775.63

4,802.73

4,022.80

3,172.77

2,796.99

Profit After Tax (PAT)

231.10

358.55

145.11

267.28

204.56

Objects of the Issue:

The objects of the Issue are:
1. To augment capital base to meet the future capital requirements arising out of the growth in their assets
due to the growth of the Indian economy; and
2. For meeting the expenses of the Issue.
Issue Detail:

Issue Open: Feb 23, 2010 - Feb 25, 2010

Issue Type: 100% Book Built Issue IPO
Issue Size: 50,000,000 Equity Shares of Rs. 10
Issue Size: Rs. 324.98 Crore
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 60 - Rs. 66 Per Equity Share
Market Lot: 100 Shares
Minimum Order Quantity: 100 Shares
Listing At: BSE, NSE

United Bank of India IPO Grading / Rating

8
5

ICRA has assigned an IPO Grade 3 to United Bank of India IPO. This means as per ICRA, company has
average fundamentals. ICRA assigns IPO gradings on a scale of 5 to 1, with Grade 5 indicating strong

Bidding Status (IPO subscription detail):

Number of Times Issue is Subscribed (BSE + NSE)

As on Date & Time

Qualified
Non
Institutional
Institutional
Buyers
Investors
(QIBs)

Retail
Individual
Investors
(RIIs)

Shares Offered / Reserved

28,500,000 4,750,000

14,250,000 2,500,000

50,000,000

Employee
Total
Reservations

Day 1 - Feb 23, 2010 17:00

3.2403
IST

0.0041

0.1219

0.0135

1.8800

Day 2 - Feb 24, 2010 17:00

4.1297
IST

1.0050

0.7001

0.1161

2.6500

Day 3 - Feb 25, 2010 19:00

47.0824
IST

39.1525

9.8038

0.5301

33.3770

IPO Listing Detail

Listing Date:
BSE
Code:

Thursday, March 18, 2014

Scrip 533171

NSE Symbol: UNITEDBNK

Listing In:

'B' Group

ISIN:

INE695A01019

Issue Price:

Rs. 66.00 Per Equity Share

Face Value:

Rs. 10.00 Per Equity Share

8
5

Sector:

Listing Day Trading Information

BSE

NSE

Issue Price:

Rs. 66.00

Rs. 66.00

Open:

Rs. 77.00

Rs. 74.90

Low:

Rs. 68.10

Rs. 68.00

High:

Rs. 77.00

Rs. 77.00

Last Trade:

Rs. 68.80

Rs. 68.65

Volume:

28,299,084

55,114,360

BASIS OF ALLOTMENT
Public Issue of 5,00,00,000 Equity Shares of Face Value of Rs.10 each of United Bank of India ("The
Bank" or "The Issuer") for Cash at a Price of Rs. 66/- per Equity Share (including a Share Premium of
Rs.56/- per Equity Share) aggregating Rs. 324.98* Crores (the "issue"). The Issue comprised of Net Issue
of 4,75,00,000 Equity Shares of face Value of Rs. 10 each to the Public ("Net issue") and a Reservation
of 25,00,000 Equity Shares for subscription by Eligible Employees (the "Employee Reservation
Portion"). The Issue constituted 15.80% of the Post Issue Pald-Up Capital of the Bank and the Net Issue
constituted 15.01% of the Post Issue Paid Up Capital of the Bank.
# A discount of Rs.3/- to the issue Price was offered to retail individual bidders and eligible employees
(the "Retail Discount"). * Pursuant to the finalisation of basis of allotment, the actual issue size amounted
to Rs. 325.15 cr due to spill over from the employees category which was distributed equally between
QIB, HNI and Retail category (i.e.60:10:30)
BID/ISSUE OPENED ON FEBRUARY 23, 2014, CLOSED ON FEBRUARY 25, 2014.
The Equity Shares of the Bank are proposed to be listed on Bombay Stock Exchange Limited ("BSE")
and the National Stock Exchange of India Limited ("NSE")
THE FACE VALUE PER EQUITY SHARE IS RS.10/-. THE ISSUE PRICE PER EQUITY SHARE IS

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RS. 66/- AND IT IS 6.6 TIMES THE FACE VALUE.

In terms of Rule 19(2)(b)of the Securities Contracts Regulations Rules, 1957 {"SCRR"). this being an
Issue for less than 25% of the post-Issue capital, the Issue was made through the 100% Book Building
Process wherein at least 60% of the Net Issue was allocated on a proportionate basis to QIB Bidders
("QIB Portion"). Further 5% of the QIB Portion was made available for allocation on a proportionate
basis to Mutual Funds only and the remainder of the QIB Portion was made available for allocation on a
proportionate basis to all QIB Bidders, Including Mutual Funds, subject to valid Bids being received at or
above the Issue Price. However, If the aggregate demand from Mutual Funds would be less than 5 % in
the QIB Portion, The balance Equity Shares available for allocation In the Mutual Fund Portion would be
added to the QIB Portion and allocated proportionately to the QIBs in proportion to their Bids. If at least
60% of the Net Issue could not be allocated to QIBs, then the entire application money would be refunded
forthwith. Further, not less than 10% of the Net Issue would be available for allocation on a proportionate
basis to Non-Institutional Bidders and not less than 30% of the Net Issue would be available for allocation
on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the
Issue Price. Further, up to 25,00,000 Equity Shares was made available for allocation on a proportionate
basis to Eligible Employees, subject to valid Bids being received at or above the Issue Price.
The Issue received 1,63,451 applications for 1,66,18,06,500 equity shares resulting in 33.24 times
subscription. The details of the applications received In the Issue from Qualified Institutional Buyers,
Non-Institutional. Retail Individual Investor and Employee categories are as under: (Before technical

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rejections)

Category

No. of Applications

No. of Shares

No. of times Subscription

Qualified Institutional Buyers

162

1.358,343,400

47.6612

Non Institutional Bidders

363

165,840,200

34.9137

Retail Individual Bidders

158.736

135,898.300

9.5367

Eligible Employees

4.1B8

1,724,600

0.6898

Final Demand
A summary of the finaldemand as per BSE and NSE as on the Bid/Issue Closing date at different bid

Bid Price

No. of Shares

% to Total

Cumulative Total

Cumulative % to total

60

3867700

0.2296

1684664700

100.0000

61

55900

0.0033

1680797000

99.7704

62

387700

0.0230

1680741100

99.7671

63

2741200

0.1627

1680353400

99.7441

64

5512800

0.3272

1677612200

99.5814

65

5427300

0.3222

1672099400

99.2541

66

1539375800

91.3758

1666672100

98.9320

CUTOFF

127296300

7.5562

127296300

7.5562

TOTAL

1684664700

100.0000

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prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being the
Bombay Stock Exchange Limited ("BSE") on March 9,2010.
A. Allotment to Employee Investors (After Technical Rejections) Including ASBA applications
The Basis of Allotment to the Employee Investors, who have bid at cut-off or at the Issue Price of Rs. 66/per Equity Share was finalized in consultation with BSE and the shares were alloted at a discount of Rs
3/- per equity share to the issue Price of Rs 66 per equity share. The category was subscribed 0.66 times.
As per the Prospectus, the unsubscribed portion of Employee Category is added back to Retail Category
(2,52,330 Equity Shares), Non Institutional Investor Category (84,110 Equity Shares), QIB Category
(5,04,660 Equity Shares). The total number of shares allotted in this category is 16,58,900 Equity Shares

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to 4,029 successful applicants. The category-wise details of the Basis of Allotment are as under:

Applns.

of %
total

to Total
of

No. %

Shares total

applied

to No.

of

Ratio

of Total

Shares

Allottees

to of

allotted

Applicants

allotted

No.

Shares

100

978

24.27

97800

5.9

100

1:1

97,800

200

992

24.62

198400

11.96

200

1:1

198,400

300

460

11.42

138000

8.32

300

1:1

138,000

400

142

3.52

56800

3.42

400

1:1

56,800

500

740

18.37

370000

22.3

500

1:1

370,000

600

50

1.24

30000

1.81

600

1:1

30,000

700

53

1.32

37100

2.24

700

1:1

37,100

800

50

1.24

40000

2.41

800

1:1

40,000

900

0.05

1800

0.11

900

1:1

1,800

1000

290

7.2

290000

17.48

1000

1:1

290,000

1100

0.2

8800

0.53

1100

1:1

8,800

1200

16

0.4

19200

1.16

1200

1:1

19,200

1300

0.07

3900

0.24

1300

1:1

3,900

1400

0.1

5600

0.34

1400

1:1

5,600

1500

241

5.98

361500

21.79

1500

1:1

361,500

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Category No.

B. Allotment to Ratail Individual Investors (After Technical Rejections) Including ASBA applications
The Basis of Allotment to the Retail Individual Investors, who have Bid at cut-off or at the issue Price of
Rs. 66/- per Equity was finalized in consultation with BSE and the sharas were allotted at a discount of Rs
3/- per equity share to the issue Price of Rs 66/- equity share. The category was over subscribed 9.27
times. The total number of shares allotted in this category is 1,45,02,330 Equity Shares to 1,02,485
successful applicants. The category-wise details of the Basis of Allotment are as under:
Category No.

of %

Applns.

to Total No. of %

total

Shares

to No.

total

applied

of Ratio

Shares

Allottees

allotted

Applicants

of Total No. of
to Shares allotted

100

24542

15.78

2454200

1.83

100

4:37

265300

200

17329

11.14

3465800

2.58

100

8:37

374,700

300

10403

6.69

3120900

2.32

100

12:37

337,400

400

5403

3.47

2161200

1.61

100

16:37

233,600

500

10035

6.45

5017500

3.73

100

20:37

542,400

600

2887

1.86

1732200

1.29

100

24:37

187,300

700

5992

3.85

4194400

3.12

100

28:37

453,400

800

2874

1.85

2299200

1.71

100

32:37

248,600

900

1066

0.69

959400

0.71

100

36:37

103,700

1000

5345

3.44

5345000

3.98

108

1:1

577,260

1100

779

0.5

856900

0.64

119

1:1

92,701

1200

829

0.53

994800

0.74

130

1:1

107,770

1300

1050

0.68

1365000

1.02

140

1:1

147,000

1400

1184

0.76

1657600

1.23

151

1:1

178,784

1500

65834

42.32

98751000

73.49

161

1:1

10,599,274

C. Allotment toNon lnstitutional lnvestors (After Technical Rejections) Including ASBA applications
The Basis of Allotment to the Non Institutional Investors, who have bid at the Issue Price of Rs. 66/- per

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Equity Share, was finalized in consultation with BSE. The category was over subscribed 34.23 times. The

total number of shares allotted in this category is 48,34,110 Equity Shares to 303 successful
applicants.The category-wise details of the Basis of Allotment are (Sample)as under:
Category

no.

of %

to Total No. of %

Applns. Total

Shares applied

to No.

Total

of Ratio

of Total No. of

Shares

Allottees

to Shares

allotted

Applicants

allotted

1600

1.89

9600

0.01

100

1700

0.63

3400

0.00

100

1800

0.63

3600

0.00

100

2000

13

4.10

26000

0.02

100

13

2300

0.63

4600

0.00

100

2400

0.32

2400

0.00

100

2500

1.26

10000

0.01

100

2800

0.32

2800

0.00

100

2900

0.32

2900

0.00

100

3000

18

5.68

54000

0.03

100

3100

0.32

3100

0.00

100

12100

0.32

12100

0.01

353

228000

0.32

228000

0.14

6661

279600

0.32

279600

0.17

8168

900000

0.32

900000

0.54

26293

1000000

0.95

3000000

1.81

29215

3030400

0.32

3030400

1.83

88532

10000000 2

0.63

20000000

12.09

292146

11363600

0.63

22727200

13.74

331943

11680000

0.32

11680000

7.06

341177

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D. Allotment to QIBs

Allotment to QIBs has been done on a proportionate basis in consultation with BSE. As per the SEBI
(Issue of Capital and Disclosure Requirements) Regulations, 2009, Mutual Funds were initially allotted
5% of the quantum of shares available (14,50,233 Equity Shares), including Spill over from Employee
Category to the extent of 25,233 Equity Shares and other QIBs were allotted the remaining available
shares (2,75,54,427 Equity Shares) on proportionate basis, including Spill over from Employee Category
to the extent of 4,79,427 Equity Shares, was allotted to other QIBs on proportionate basis.
Flls

FIs/Banks

MFs

INC/VCFs

Total

1,44,15,662

60,27,642

47,17,401

38,43,955

2,90,04,660

The Board of Directors of the Bank has approved by circulation the basis of allotment of shares of the
Issue vide the Resolution dated March fO,2Q10andhasaifottedthe shares to various successful applicants.
The CAN-cum-Refund Orders and allotment advice and notices have been dispatched to the address of
the Investors as registered with the depositories. In case the same is not received within ten days,
investors may contact the Registrar to the Issue at the address given below. The Refund Orders have been
over-printed with the Bank Mandate details as registered, if any, with the depositories. The shares allotted
to successful applicants are being credited to their beneficiary accounts subject to validation of the
account details with the depositories concerned. The Bank is taking steps to get the equity shares admitted
for trading on Bombay Stock Exchange Limited and the National Stock Exchange of India Limited within
seven wording days from the date of approval of the basis of allocation.
Note: All capitalized terms used and not defined herein shall have the respective meaning assigned to
them in the prospectus dated March 5,2010 ("Prospectus")

Book Running Lead Manager(s):

1. Edelweiss Capital Limited
2. Enam Securities Private Limited
3. SBI Capital Markets Limited

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Registrar of the Issue:

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Link Intime India Private Ltd

CHAPTER-6
FINDINGS,
SUGGETION,
CONCLUTION.

FINDINGS :
JP Infra
Jaypee infra is one of the subsidiary of JP Associates one stock which is best stock to buy for long
term.
The stock went down more than 10 per cent to Rs 91, below its issue price of Rs 102.

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Though CEO and management of Jaypee Infra is confident about the growth of the stock. Experts
thinks that the stock is now on fair value to collect on every fall for long term investment.

 Jaypee Infra will be the buzzing stock in near future what experts expects.

DQ
DQ currently follows an outsourcing service model. Its a pioneer in 2D and 3D animation movies
and gaming products and has association with global leaders such as Walt Disney.
As of March 2009, Company has generated revenue of 53 crore from co-productions, in which it
has invested around Rs 47 crore. 33 more productions are currently under development.
DQ is proposing to deploy 45% of IPO proceeds towards IP content creation businesses and coproduction
About 60% of the total revenue is currently coming from 3D animation projects. These provide
good margins to the company.

UBI : All Banking are going up, both from private and public sector.
But United Bank of India, is the only stock that is falling.
It's looks like fundamentally something is wrong with this bank. Every analyst is telling it is
undervalued, but no any big investor is ready to buy even at these levels.
This tells that analyst are wrong in evaluating the stock P/E's. It seems to be fully priced in and
stock is likely to settle around 60.
This is likely to underperform for few months before it can take off

SUGGETION:

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Choosing the Perfect Time

 Choosing the Right Team

Definite Goals and Purposes
Choosing the Right Merchant Bankers
Capital Restructuring
Creating Investor Interest
Media Campaigns

CONCLUTION:

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Don't forget that market belongs to no one.

 You are competing with the best resources of world in terms of mind power and money
power.

Stoplosses may be too near the support/resistance or may be the support/resistance itself.
Hence, stop-loss will trigger.

In sideways markets securities tend to test the support and resistance before deciding to
change direction..

The analyst is a human being - he too will make mistakes - bear with him - don't press
him for a stock of your choice, he may not have tracked that.

Stay clam - have patience - have some tool available to yourself as well so you can see
where the stock is question is going.

Stop hopping from one analyst to another analyst - everyone has 50% hit rate.

Develop automated trading style (good tools / software). Don't use your brain but you
need good nervous system

BIBLIOGRAPHY:
www.nseindia.com

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www.bseindia.com

 www.chittogarh.com
www.investopedia.com
www.monycontrol.com

NEWS PAPERS:
ECONOMIC TIMES
BUSINESS LINE

BOOKS REFERED:

Security analysis and portfolio management

Financial management

IPO GLOSSARY
A

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Allocation

This is the amount of stock in an initial public offering (IPO) granted by the underwriter
to an investor.
Aftermarket
Trading in the IPO subsequent to its offering is called the aftermarket.

B
Board of Directors
The composition of the Board of Directors is particularly critical for an IPO. Typically, a
board is composed of inside and outside directors.
Broken IPOs
If an IPO trades below its IPO price in the aftermarket, it is said to be a broken IPO.

C
Calendar
This refers to upcoming IPOs and secondary offerings. Brokerage houses have equity
calendars, bond calendars and municipal calendars.
Clearing Price
The price at which all shares of an IPO can be sold to investors in a Dutch Auction.
Sometimes referred to as the market clearing price.

F
First Day Close
The closing price at the end of the first day of trading reflects not only how well the lead
manager priced and placed the deal, but what the near-term trading is likely to be.

Float
When a company is publicly traded, a distinction is made between the total number of
shares outstanding and the number of shares in circulation, referred to as the float. The
float consists of the company's shares held by the general public.

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Green Shoe

A typical underwriting agreement allows the underwriters to buy up to an additional 15%

of shares at the offering price for a period of several weeks after the offering. This option
is also called the overallotment and is exercised when the IPO is oversubscribed and
trading above its offer price. The term comes from the Green Shoe Company, which was
the first to have this option.

H
Hot Issue
When there is significantly more demand than supply for an IPO it is said to be a hot
issue.

I
Initial Public Offering
This is the event of a company first selling its shares to the public.

Insiders
Management, directors and significant stockholders are regarded as insiders because they
are privy to information about the operations of a company not known to the general
public.
IPO Price
Individual investors often ask why the price at which an IPO starts trading is different
from its offer price. This occurs because the offer price is set by the underwriters before
the stock starts trading. Once the stock starts trading, the price is determined by actual
supply and demand and can be higher or lower.
IPO Research
Prior to the offering, the underwriters involved in the IPO are prohibited from issuing
research or recommendations for forty days. Following the IPO, the underwriter is
allowed to issue a research report

M-N

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Market Capitalization
The total market value of a firm. It is defined as the product of the company's stock price
per share and the total number of shares outstanding

Market Value
The market value of a company is determined by multiplying the number of shares
outstanding by the current price of the stock.

O
Offering Price
This is the price at which the IPO is first sold to the public. It is set by the lead manager,
usually after the close of stock market trading the night before the shares are distributed
to IPO buyers. In the case of some foreign IPOs, the pricing occurs over the weekend.
Oversubscribed
When a deal has more orders than there are shares available it is said to be
oversubscribed.

P
Preliminary Prospectus
This is the offering document printed by the company containing a description of the
business, discussion of strategy, presentation of historical financial statements,
explanation of recent financial results, management and their backgrounds and
ownership.
Proceeds
Companies go public to raise money. The money raised is referred to as proceeds.

R
Red Herring
This is the term of art for the preliminary prospectus. It gets its name from the printed red
disclaimer on the left side of the prospectus.

U-V

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Underwriter
This is a brokerage firm that raises money for companies using public equity and debt
markets. Underwriters are financial intermediaries that buy stock or bonds from an issuer
and then sell these securities to the public.