final project(mfc-4th sem)

7/31/2019 Final Project(MFC-4th Sem)

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ARYA SCHOOL OF MANAGEMENT AND

INFORMATION TECHNOLOGY

BHUBANESWAR

A PROJECT REPORT

ON

PRICING OF AN IPO(A calculated trick; is it justifiedoften)

Submitted in partial fulfillment of the degree ofMasterof Finance and Control

2010-12

ByJYOTIRMAYA MISHRA

ROLL NO-13767U104013

Under the guidance of

INTERNAL GUIDE

EXTERNAL GUIDE

Mr. SANDHYADARSHAN DASH Mr. BIPIN BIHARI DUTTA

FACULTY IN FINANCE

Asst. Manager

ASMIT

Bhubaneswar Stock Exchange


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UTKAL UNIVERSITY, VANIVIHAR BHUBANESWAR

ACKNOWLEDGEMENT

Words are indeed inadequate to convey my deep sense of gratitude to all those who

have helped me in completing the final project to the best of my ability. Being a part of this

project has certainty been a unique and a very productive experience on my part. I sincerely

feel that the credit of the organization study and project work could not be narrowed down to

only one individual. As the whole, work is the outcome of whole hearted cooperation from

many persons with whose guidance and support. I was able to bring out this project report.

I am really thankful to Mr. BIPIN BIHARI DUTTA. (Asst. MANAGER),

BHUBANESWAR STOCK EXCHANGE(BhSE)for making all kinds of arrangements to

carry the project successfully and for priding and helping me to solve all kind of quarries

regarding the project work. His systematic way of working and incomparable guidance has

inspired the pace of project to a great extent.

I must acknowledge my deep sense of gratitude to Mr. SANDHYADARSHAN

DASH (Faculty of Finance) my internal guide of my college for his kind and invaluable

suggestions regarding the project work

Last but not on the least I would like to thank all the employees ofBhSE, who have

directly or indirectly helped me with their moral support for the completion of my project.

Most of all I owe everything to almighty, my parents & my friends for their skills and

creativity which made my project more appealing & attractive.

Jyotirmaya Mishra

ROLL NO: 13767U104013ASMIT


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DECLARATION

I do here by declare that this FINAL PROJECT REPORT entitled as PRICING OF AN

IPO(A calculated trick;is it justified often) at BhSE is done on true finding and my

own efforts. I submit this report for the partial fulfillment in the award of degree of Master

of Finance Control ( 2010- 2012) from the Arya School Of Management & information

technology (ASMIT), Bhubaneswar under the Utkal University, Orissa..

Further, I declare that the final project for the award ofMaster of Finance and Control,

Degree with above mentioned title has not been previously done by any person in the college

to the best of my knowledge.

Jyotirmaya Mishra

ROLL NO:

13767U104013

ASMIT


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CONTENTS

CHAPTER-1

INTRODUCTION

1.Executive summary2.OBJECTIVES OF THE STUDY3.scope of the study4.LIMITATIONS OF THE STUDY

CHAPTER-2ORGANISATION PROFILE

CHAPTER-3CONCEPTUAL PROFILE1. INTRODUCTION2. DIFFERENT KINDS OF ISSUE3. WHAT IS AN IPO4. ROLE OF INTERMEDIARIES5. ANALYSIS OF AN IPO INVESTMENT6. IPO INVESTMENT STRATEGIES7. PRICING OF AN IPO

8. UNDERPRICING & OVERPRICING OF IPOs9. PRINCIPAL STEPS IN IPO10. BOOK BUILDING IS THE PROCESS OF PRICE

DISCOVERY11. BOOK BUILDING PROCESS12. DOCUMENTS REQUIRED

CHAPTER-4

DATA ANALYSIS & INTERPRETATATION

1.ANALYSIS OF IPO OF 12 COMPANIES FOR LAST 3

YEARS

CHAPTER-5

1.CONCLUSION

2.RECOMMENDATION

CHAPTER-6Bibliography, website


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Chapter-1(introduction)

1.EXECUTIVE SUMMARY

As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the

current industry, mainly because of India being a developing country and lot of growth in various

sectors which leads a country to ultimate success. And when we talk about countrys growth which is

dependent on the kind of work and how much importance to which sector is given. And when we say

or talk about industries growth which leads the economy of country has to be balanced and given

proper finance so as to reach the levels to fulfill the needs of the society. And industries which have

massive outflow of work and a big portfolio then its very difficult for any company to work with

limited finance and this is where IPO plays an important role. This report talks about how IPO helps

in raising fund for the companies going public, what are its pros and cons, and also it gives us detailed

idea why companies go public.

How and what are the steps taken by the companies before going for any IPO and also the role of

(SEBI) Securities and Exchange Board of India the BSE and NSE , what are primary and secondary

markets and also the important terms related to IPO. It gives us idea of how IPO is driven in the

market and what are various factors taken into consideration before going for an IPO. And it also tells

us how we can more or less judge a good IPO. Then we all know that scams have always been a part

of any sector you go in for which are covered in it and also few recommendations are given for thesame. It also gives us some idea about what are the expenses that a company undertakes during an

IPO. IPO has been one of the most important generators of funds for the small companies making

them big and given a new vision in past and it is still continuing its work and also for many coming

years.

2.OBJECTIVE OF THE STUDY

The purpose of this study is to have a thorough knowledge of IPO. So we are

also learning the types of organisation and their functions. The reasoning such

as why and what helps us to clear the doubts about IPO. The knowledge of

markets helps us to know where the IPO is possible.

The various institutions involved are known so that organisations going for IPO

are able to have easier access to these institutions.

The advantages and disadvantages of going for IPO are analysed.

Knowledge about successful and failure IPO are studied.

To have a overall understanding of the stock market in India


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3.SCOPE OF THE STUDY The scope lies in determine the future prospectus for the investor in making

investmentdecision.

The study provides a comprehensive overview of performance of script in the

primarymarket.

The study aims to find out the profitable issues among the total issues passes out during

the period.

4.LIMITATIONS OF THE STUDY

The project report is prepared for the Post Graduate level course of the University. The study is

carried out according to that level only.

The study is to be completed within a period of 8 weeks. So the scope of the study is

determined in such a way that it will be completed successfully in such time limit.

The main limitation of the study is analysis of only 12 companies who have issued their IPOs.

Chapter-2(organisation profile)

BHUBANESWAR STOCK EXCHANGE LIMITED

H I S T O R Y

Initial step was taken by the Department of Industry, Govt. of Orissa and Industrial

Promotion & Investment Corporation of Orissa Ltd. (IPICOL) in the early eighties to

set up a Stock Exchange in the State of Orissa. Subsequently, Bhubaneswar Stock Exchange

was incorporated on 17th April,1989 as a Public Company, limited by guarantee with an object

to facilitate, assist, regulate and control the business of dealing in stocks, shares and like

securities in the State of Orissa. Ministry of Finance, Govt. of India granted recognition to theStock Exchange on 5th June,1989 under the provisions of the Securities Contracts (Regulation)


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Act,1956 for an initial period of five years. Thereafter, the recognition of the Stock Exchange

is being renewed from time to time by Securities and Exchange Board of India (SEBI). On

being recognized during 1989, Bhubaneswar Stock Exchange admitted 161 memberbrokers in

the first phase and commenced its trading operation on 2nd January, 1991. To impart greater

liquidity in both shares and debentures and to increase the volume of business, the Exchange

has expanded its membership strength during the year 1995 by admitting 75 more member-brokers. However, the status of the Stock Exchange was converted from a Company limited by

guarantee, to a Company limited by shares during the year 2005 pursuant to The

Bhubaneswar Stock Exchange (Corporatisation and Demutualisation) Scheme, 2005 approved

by SEBI.

MANAGEMENT

The affairs of the Stock Exchange are managed by the Board of Directors. The Board of

Directors of the Stock Exchange comprises of 8 (Eight) Directors of which 2 are Trading

Member Directors, 2 are Public Interest Directors, 3 are Shareholder Directors and a Chief

Executive Director. However, the Board of Directors of the Stock Exchange is under

supersession by SEBI w.e.f. 3rd January,2003. Shri J.P. Verma, IPS (Retd.) was appointed by

SEBI as Administrator of the Stock Exchange to discharge the powers andduties of the Board of Directors. He continued to act as the Administrator of the Stock

Exchange upto 30th September,2006. Thereafter, SEBI, while extending the period of

supersession of Board of Directors of the Exchange, has designated Shri Vivekananda

Pattanayak, IAS (Retd.) as the Administrator of Bhubaneswar Stock Exchange to

discharge the powers and duties of its Board of Directors with effect from 1st October,

2006. Accordingly, Shri Pattanayak, IAS (Retd.) has taken over as the Administrator of

Bhubaneswar Stock Exchange w.e.f. 3rd October,2006 to discharge the powers and duties

of the Board of Directors of the Stock Exchange.

The Stock Exchange, while recording the valuable service rendered by Shri J.P. Verma,

IPS (Retd.) during his tenure as the Administrator, welcomes Shri Vivekananda

Pattanayak, IAS (Retd.) as its Administrator.

The Board of Directors/Administrator of the Stock Exchange is, at present, assisted by 11

qualified officials.

AUTOMATION

The entire trading and settlement operation was computerised since inception. However,

the Exchange switched over to Screen Based Trading with effect from 20th May,1997

through which the member-brokers conducted trading on line thereby bringing to an end

to the old tradition of open out-cry system of trading.

OPERATIONAL INFRASTRUCTURE

Upon automation of the trading activities, Trading Hall of the Stock Exchange has been

modernised with the latest capital market infrastructures.SETTLEMENT SYSTEM

The Settlement system of the Exchange is carried out on Daily Rolling Basis (T+1) as

per the SEBI Guidelines issued from time to time. Pay-in/pay-out, in terms of Settlement

Calender, are effected well in time through the Centralized Banking System of the Stock

Exchange. Canara Bank has established a Branch to facilitate the pay-in/pay-out

operation as well as the banking transactions of the Stock Exchange and its trading

members.

CLEARING HOUSE

Bhubaneswar Stock Exchange has its own Clearing House. The transactions entered

among the trading members of the Exchange are settled by delivery and payment

obligations through the Clearing House of the Stock Exchange in accordance with theprescribed settlement program under a Centralized Delivery and Payment System.


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INTER-CONNECTIVITY

Bhubaneswar Stock Exchange has played an instrumental role, among others, in mooting

the idea of establishing of an Inter-connected Market System (ICMS). This effort was

resulted in establishing Inter-connected Stock Exchange of India of Ltd. to provide a

nationwide equity market through the trading members of participating Stock Exchanges.

It has also facilitated the trading members of participating Stock Exchanges includingBhubaneswar Stock Exchange, to trade on the National Stock Exchange segment.

LISTED STOCKS

Despite introduction of SEBI Delisting Guidelines,2003, Bhubaneswar Stock Exchange

continued to have listing of securities of several companies having aggregate paid-up

capital of around Rs.2,200 crores.

PRIMARY MARKET

Bhubaneswar Stock Exchange has been playing an active role for the growth of primary

market activities with the support of its trading members. The Stock Exchange ensures

promotional steps for participation of investing public at a large scale, in the public offers

of several companies.

CUSTOMERS PROTECTION FUNDInvestors protection is the cornerstone of a vibrant market. Bhubaneswar Stock

Exchange has established a Statutory Fund namely, Bhubaneswar Stock Exchange

Customers Protection Fund with an object to protect the customers from the risk of

defaulting trading members. At present, as per the Rules of the said Fund, a customer is

entitled to be indemnified to a maximum of Rs.25,000/- towards his claim against a

defaulter trading member of the Stock Exchange.

INVESTORS SERVICE CELL

Bhubaneswar Stock Exchange has an Investors Service Cell which also ensures

protection of the investors. It promptly attends the complaints of various nature lodged by

the investors against companies as well as the trading members of the Stock Exchange

and plays an important role in a friendly approach to redress the investors grievances

The Investors Service Cell undertakes due care to build up confidence of the common

investors on the capital market.

LIBRARY

Bhubaneswar Stock Exchange has a good library. It has a list of several books and

guidelines relating to capital market. It also subscribes Periodicals and Financial News

Dailies for readers. In addition to this, prime magazines for new issues, annual reports of

several listed companies are available with it. The library of the Stock Exchange is, thus

playing a promotional role for enrichment of knowledge of the staff, trading members,

investors and research scholars at large. The Stock Exchange with the support of its

library, also helps the management students to prepare their project reports.EMPLOYMENT

Bhubaneswar Stock Exchange has also been instrumental in generating various nature of

employment, both directly and indirectly, in the State of Orissa. As a result, apart from

direct employment for its own purpose, it has created opportunity for generation of a

number of indirect appointments in various capacities such as sub-brokers, authorised

assistants, authorised representatives and other staff in the stock-broking firms.

FUTURE UNDERTAKINGS

Bhubaneswar Stock Exchange has undertaken a number of measures to activate business

in securities and to spread the message of goodwill among the investing public. Such

measures are

to provide Depository Service so that the trading in securities and supportingdepository operation connected to it shall be carried out under an umbrella.


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to upgrade the infrastructural facilities to facilitate expansion of trading activities.

to host Training Program for trading member as well as employees of the Stock

Exchange.

to introduce, provide and conduct a Course for imparting education on Indian

Stock Market to the aspirants.

to construct a modern hi-tech building of the Stock Exchange.

Chapter-3(conceptual profile)

1.INTRODUCTION

IPO Stands ForInitial Public Offering And Means The New

Offer Of Shares From A Company Which Was Previously Unlisted. This IsDone By Offering Those Shares To The Public, Which Were Held By The

Promoters Or The Private Investors Prior To The Ipo. In The Case When

Other Investors Or Promoter Held The Shares The Stake Holding Comes

Down To The Extent Their Shares Are Offered To The Public. In Other Cases

New Shares Are Issued To The Public And The Shares, Which Are With The

Promoters Stay With Them. In Both Cases The Share Of The Promoters In

The Total Capital Comes Down.

For Example Say There Are 100 Shares In A Company And 50

Of These Are Offered To The Public In An Ipo Then In Such A Case The

Promoters Stake In The Company Comes Down From 100% To 50%. In

Another Case The Company Issues 50 Additional Shares To The Public

And The Stake Of The Promoter Comes Down From 100% To 67%.Normally In An Ipo The Shares Are Issued At A Discount To

What Is Considered Their Intrinsic Value And Thats Why Investors Keenly

Await Ipos And Make Money On Most Of Them. Ipo Are Generally Priced

At A Discount, Which Means That If The Intrinsic Value Of A Share Is

Perceived To Be Rs.100 The Shares Will Be Offered At A Price, Which Is

Lesser Than Rs.100 Say Rs.80 During The Ipo. When The Stock Actually

Lists In The Market It Will List Closer To Rs.100. The Difference Between

The Two Prices Is Known As Listing Gains, Which An Investor Makes

When Investing In Ipo And Making Money At The Listing Of The Ipo. A

Bullish Market Gives Ipo Investors A Clear Opportunity To Achieve Long

Term Targets In A Short Term Phase.

Companies fall into two broad categories: Private andPublic

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 GoOut And Incorporate A Company: Just Put In Some Money, File The Right Legal Documents And


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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 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.

2.DIFFERENT KINDS OF ISSUE


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3.WHAT IS AN IPO ?

An Ipo Is The First Sale Of Stock By A Company To The Public.

A Company Can Raise Money By Issuing Either Debt Or Equity. If The

Company Has Never Issued Equity To The Public, It's Known As An Ipo.

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. Anybody Can

Go Out And Incorporate A Company: Just Put In Some Money, File The

Right Legal Documents And Follow The Reporting Rules Of Your

Jurisdiction. Most Small Businesses Are Privately Held. But Large

Companies Can Be Private Too. Did You Know That Ikea, Domino's Pizza

And Hallmark Cards Are All Privately Held?

It Usually Isn't Possible To Buy Shares In A Private Company.You 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 Referred To As "Going

Public."

Public Companies Have Thousands Of Shareholders And Are

Subject To Strict Rules And Regulations. They Must Have A Board Of

Directors And They Must Report Financial Information Every Quarter. In

The United States, Public Companies Report To The Securities And

Exchange Commission (Sec). In Other Countries, Public Companies Are

Overseen By Governing Bodies Similar To The Sec. From An Investor's

Standpoint, The Most Exciting Thing About A Public Company Is That TheStock Is Traded In The Open Market, Like Any Other Commodity. If You


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Have The Cash, You Can Invest. The Ceo Could Hate Your Guts, But

There's Nothing He Or She Could Do To Stop You From Buying Stock.

The First Sale Of Stock By A Private Company To The Public,

Ipos Are Often Issued By Smaller, Younger Companies Seeking Capital

To Expand, But Can Also Be Done By Large Privately-Owned Companies

Looking To Become Publicly Traded. In An Ipo, The Issuer Obtains The

Assistance Of An Underwriting Firm, Which Helps It Determine What Type

Of Security To Issue (Common Or Preferred), Best Offering Price And Time

To Bring It To Market. Ipos Can Be A Risky Investment. For The Individual

Investor, It Is Tough To Predict What The Stock Will Do On Its Initial Day Of

Trading And In The Near Future Since There Is Often Little Historical Data

With Which To Analyze The Company. Also, Most Ipos Are Of

Companies Going Through A Transitory Growth Period, And They Are

Therefore Subject To Additional Uncertainty Regarding Their Future Value.

Primary And Secondary Markets

In The Primary Market Securities Are Issued To The Public

And The Proceeds Go To The Issuing Company. Secondary Market Is TermUsed For Stock Exchanges, Where Stocks Are Bought And Sold After They

Are Issued To The Public.

Primary Market

The First Time That A Companys Shares Are Issued To The

Public, It Is By A Process Called The Initial Public Offering (Ipo). In An Ipo

The Company Offloads A Certain Percentage Of Its Total Shares To The

Public At A Certain Price.

Most Ipos These Days Do Not Have A Fixed Offer Price.

Instead They Follow A Method Called Book Buildin Process, Where

The Offer Price Is Placed In A Band Or A Range With The Highest And The

Lowest Value (Refer To The Newspaper Clipping On The Page). The Public

Can Bid For The Shares At Any Price In The Band Specified. Once The BidsCome In, The Company Evaluates All The Bids And Decides On An Offer

Price In That Range. After The Offer Price Is Fixed, The Company Allots Its

Shares To The People Who Had Applied For Its Shares Or Returns Them

Their Money.

Secondry Market

Once The Offer Price Is Fixed And The Shares Are Issued To

The People, Stock Exchanges Facilitate The Trading Of Shares For The

General Public. Once A Stock Is Listed On An Exchange, People Can Start

Trading In Its Shares. In A Stock Exchange The Existing Shareholders Sell

Their Shares To Anyone Who Is Willing To Buy Them At A Price Agreeable

To Both Parties. Individuals Cannot Buy Or Sell Shares In A StockExchange Directly; They Have To Execute Their Transaction Through

Authorized Members Of The Stock Exchange Who Are Also Called Stock

Brokers.

4.ROLE OF INTERMEDIARIES

Who Are The Intermediaries In An Issue?

Merchant Bankers To The Issue Or Book Running Lead

Managers (Brlm), Syndicate Members, Registrars To The Issue, Bankers

To The Issue, Auditors Of The Company, Underwriters To The Issue,

Solicitors, Etc. Are The Intermediaries To An Issue. The Issuer Discloses

The Addresses, Telephone/Fax Numbers And Email Addresses Of These


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Intermediaries. In Addition To This, The Issuer Also Discloses The Details

Of The Compliance Officer Appointed By The Company For The Purpose Of

The Issue.

Who Is Eligible To Be A Brlm?

A Merchant Banker Possessing A Valid Sebi Registration In

Accordance With The Sebi (Merchant Bankers) Regulations, 1992 Is

Eligible To Act As A Book Running Lead Manager To An Issue.

What Is The Role Of A Lead Manager? (Pre And Post Issue)

In The Pre-Issue Process, The Lead Manager (Lm) Takes Up

The Due Diligence Of Companys Operations/ Management/ Business

Plans/ Legal Etc. Other Activities Of The Lm Include Drafting And Design

Of Offer Documents, Prospectus, Statutory Advertisements And

Memorandum Containing Salient Features Of The Prospectus. The Brlms

Shall Ensure Compliance With Stipulated Requirements And Completion

Of Prescribed Formalities With The Stock Exchanges, Roc And Sebi

Including Finalization Of Prospectus And Roc Filing. Appointment Of

Other Intermediaries Viz., Registrar(S), Printers, Advertising Agency And

Bankers To The Offer Is Also Included In The Pre-Issue Processes. The LmAlso Draws Up The Various Marketing Strategies For The Issue.

The Post Issue Activities Including Management Of Escrow

Accounts, Co-Ordinate Non-Institutional Allocation, Intimation Of

Allocation And Dispatch Of Refunds To Bidders Etc Are Performed By The

Lm. The Post Offer Activities For The Offer Will Involve Essential Followup

Steps, Which Include The Finalization Of Trading And Dealing Of

Instruments And Dispatch Of Certificates And Demat Of Delivery Of

Shares, With The Various Agencies Connected With The Work Such As The

Registrar(S) To The Offer And Bankers To The Offer And The Bank

Handling Refund Business. The Merchant Banker Shall Be Responsible For

Ensuring That These Agencies Fulfill Their Functions And Enable It To

Discharge This Responsibility Through Suitable Agreements With TheCompany.

What Is The Role Of A Registrar?

The Registrar Finalizes The List Of Eligible Allottees After

Deleting The Invalid Applications And Ensures That The Corporate Action

For Crediting Of Shares To The Demat Accounts Of The Applicants Is Done

And The Dispatch Of Refund Orders To Those Applicable Are Sent. The

Lead Manager Co-Ordinates With The Registrar To Ensure Follow Up So

That That The Flow Of Applications From Collecting Bank Branches,

Processing Of The Applications And Other Matters Till The Basis Of

Allotment Is Finalized, Dispatch Security Certificates And Refund Orders

Completed And Securities Listed.

What Is The Role Of Bankers To The Issue?Bankers To The Issue, As The Name Suggests, Carries Out All

The Activities Of Ensuring That The Funds Are Collected And Transferred To

The Escrow Accounts. The Lead Merchant Banker Shall Ensure That

Bankers To The Issue Are Appointed In All The Mandatory Collection

Centers As Specified In Dip Guidelines. The Lm Also Ensures Follow-Up

With Bankers To The Issue To Get Quick Estimates Of Collection And

Advising The Issuer About Closure Of The Issue, Based On The Correct

Figures.

Question On Due Diligence

The Lead Managers State That They Have Examined Various

Documents Including Those Relating To Litigation Like CommercialDisputes, Patent Disputes, Disputes With Collaborators Etc. And Other

Materials In Connection With The Finalization Of The Offer Document


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Pertaining To The Said Issue; And On The Basis Of Such Examination And

The Discussions With The Company, Its Directors And Other Officers,

Other Agencies, Independent Verification Of The Statements Concerning

The Objects Of The Issue, Projected Profitability, Price Justification, Etc.,

They State That They Have Ensured That They Are In Compliance With

Sebi, The Government And Any Other Competent Authority In This

Behalf.

5.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

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 MatchHis 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.

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?


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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?

6.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 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.

Measure The Risk Involved:

Ipo Investments Have A High Degree Of Risk Involved. It Is Therefore, Essential To Measure

The Risks And Take The Decision Accordingly.

Invest At Your Own Risk:

Finally, After The Homework Is Done, And The Big Step Needs To Be Taken. All That Can BeSuggested Is To Invest At Your Own Risk. Do Not Take A Risk Greater Than Your Capacity.

7.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


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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 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 TheInvestors. 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 ExceedsThe

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.

8.UNDERPRICING AND OVERPRICING OF

IPOSUnderpricing:

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.

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 To Lose Its Marketability And Hence, Even More Of Its Value.

9.PRINCIPAL STEPS IN AN IPO

Approval Of Bod : Approval Of Bod Is Required For Raising Capital From The Public.


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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 AndOthers, The Prospectus Signed By The Directors, Must Be Filed With The

Registrar Of Companies, With The Required Documents As Per The Companies

Act 1956.

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.

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.

10.BOOK BUILDING IS THE PROCESS OF

PRICE DISCOVERY (BASIC CONCEPT)


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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.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 Can Be Sure Of Getting An Allotment.

11.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 ThenDetermined After The Bid Closing Date Based On Certain Evaluation Criteria

The Process:


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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. 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


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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 AfterThe Final Allotment Is Made. If You Do Not Get Your Money Or

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 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 BidsFrom 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).

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


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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.

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 HasMany Positive And Fascinating Features, The Design Adopted Was Still Riddled With Flaws, And

We

Can Do Much Better.

12.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 CompanyMaking A Public Issue Is Required To File The Draft Offer Document With The Securities And

Exchange Board Of India, The Market Regulator.

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.

Players:


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Co-Managers And Advisors

Underwriters

Lead Managers

Bankers

Brokers And Principal Brokers

Registrars

Stock Exchanges.

Chapter-4(data analysis $

interpretation)

ANALYSIS OF THE IPO OF 12 COMPANIES OF

LAST 3 YEARS

OVERVALUED IPOS

1. Oil India :(September 2009)

About the Company -

The Company was incorporated on February 18, 1959 under the Companies Act, 1956 ("Companies

Act") as a private limited company. The name of the Company was changed from Oil India Private

Limited to Oil India Limited with effect from May 4, 1961.

About the Issue -

(September 2009)

Public issue of 26,449,982 equity shares of Rs. 10 each ("equity shares") for cash at a price of Rs.

1,050 per equity share of oil india limited aggregating Rs. 27,772.48 million ("issue"). The issue

comprises a net issue to the public of 24,045,438 equity shares ("net issue") and a reservation of

2,404,544 equity shares for subscription by eligible employees, at the issue price. The issue shall

constitute 11% of the fully diluted post-issue capital of the company.

Issue price:Rs. 1,050 per equity share

The face value of equity shares: Rs. 10 and the issue price is 105 times the face value

This Issue has been graded by CRISIL Limited and has been assigned a grade of 4/5 indicating goodfundamentals.


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Risk Factors

1- Fluctuations in crude oil prices may adversely affect our revenues and profits and a

substantial or extended decline in international prices for crude oil would have a material adverse

effect on our business.

2- Oil India has limited global presence in the field of oil exploration, development and

production and may be unable to match the international oil majors in the quantity and rate of reserve

accretion and discovery of commercially viable hydrocarbon reserves.

3- Hydrocarbons exploration is capital-intensive and involves numerous risks, including the risk

that, after substantial expenditures, they will encounter oil or natural gas reservoirs that may not be

commercially viable for production.

4- The company do not have any registered patents or trademarks, and failure to protect their

intellectual property rights may adversely affect their business.

5- Some of the countries in which Oil India operate, such as Iran and Sudan, are subject to

certain international sanctions.

Shareholding Pattern of Oil India Ltd.:

Name of

Shareholder

Pre Issue but prior to

transfer

Post transfer but Prior to

the Issue

Post Transfer Post Issue

Number of

Equity

Shares

Percentag

e of

Holding

(%)

Number of

Equity

Shares

Percentag

e of

Holding

(%)

Number of

Equity

Shares

Percentage

of Holding

(%)

1 President Of

India

210,000,000 98.13 188,599,56

0

88.13 188,599,56

0

78.43

2 Public(Including

Employees)

4,004,400 1.87 4,004,400 1.87 30,454,382 12.66

3 IOCL - - 10,700,220 5.00 10,700,220 4.45

4 HPCL - - 5,350,110 2.50 5,350,110 2.23

5 BPCL - - 5,350,110 2.50 5,350,110 2.23

Total 214,004,40

0

100 214,004,40

0

100 240,454,38

2

100

Fundamentals:


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Pre issue( Rs million) Post Issue(Rs million)

Paid up capital 2140.04 2404.5Reserves 98567.07 155259.0Networth 100707.11 157663.5

PAT 22308.50 28877.3EPS 91.84 148.25P/E 11.43 8.34PEGEV/EBIDTADividend - 160%, 195%Market Price 1050 124452 week Lw/Hg - 1101/1424Book Value per share 418.88 655.99

Technical :


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Analysis:

If we look at the Fundamentals of the company it looks pretty strong which is also evident from the

fact that CRISIL has also graded Oil India Ltd as 4 out of 5. From the above table it is clear that the

fundamental parameters has increased when pre and post issue figures are compared.Net worth of the

company has increased 1.56 times which shows the company is flourishing and profit is increasing

year on year. If we look at the P/E ratio it is at par with the Industry average of 12.6 at the time of the

issue but post issue it decreased because of the increase in EPS. Company has also paid good

dividend (160% in 2010 & 195% in 2011).


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If we see the technical chart of Oil India Ltd we can make out that the stock has been traded at the

price above the issue price since its launch and its been hovering on an average just above the issue

price which is evident from its 52 weeks low/high price.

Thus we can say that since its been traded above the issue price that means its well accepted by the

investors and is supported by them because of strong fundamentals and good future prospects.

2. Godrej Properties:

(Jan 2010)

Sector- Real state

About the Company:

Our Company was originally incorporated as Sea Breeze Constructions and Investments Private

Limited on February 8, 1985 by Mr. Mohan Khubchand Thakur and Mrs. Desiree Mohan Thakur. In

the year 1987, we became a part of the Godrej group and in the year 1989 we became a subsidiary of

Godrej Industries Limited (erstwhile Godrej Soaps Limited).

The name of our Company was changed to Godrej Properties and Investments Private Limited

pursuant to a special resolution of the shareholders dated July 2, 1990. In the year 1991, the status of

our Company was changed to a deemed public company by deletion of the word Private from the

name of the Company. Subsequently the status was changed to a public limited company pursuant

To a special resolution of the members passed at the extraordinary general meeting on August 1,

2001. Our name was further changed to Godrej Properties Limited pursuant to a special resolution of

the members passed at the extraordinary general meeting on November 23, 2004.

We are a real estate development company based in Mumbai, Maharashtra and have a presence in 10

cities in India. Currently, our business focuses on residential, commercial and township

developments. We are a fully integrated real estate development company undertaking our projects

through our in-house team of professionals and by partnering with companies with domestic and

international operations.

About the Issue :

Public issue of 9,429,750 equity shares of Rs. 10 each of Godrej Properties Limited where

16,97,345 equity shares were issued for cash at a price of Rs. 530 per equity share (including a share

premium of Rs.520 per equity share) and 77,32,405 equity shares were issued for cash at a price ofRs. 490 per equity share (including a share premium of Rs.480 per equity share) collectively

aggregating to Rs. 468.85 crores (the issue). The issue will constitute 13.5% of the post issue

Paid-up capital of the company. The face value of each equity share is Rs. 10. The floor price is Rs

490 and the cap price was Rs. 530. The issue price is 49 times the face value at the lower end of the

price band and 53 times the face value at the higher end of the price band. The minimum bid lot is 13

equity shares. This Issue has been graded by ICRA Limited and has been assigned the IPO Grade 4,

indicating above average fundamentals.

Risk Factors :

1- A majority of our Land Reserves is not registered in the name of the Company.


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2- Increase in prices of, shortages of, or delays or disruptions in the supply of buildingmaterials could harm our results of operations and financial condition.3- Restrictions on foreign direct investment in the real estate sector may hamper ourability to raise additional capital.4- The cyclical nature of the Indian real estate market could cause us to experiencefluctuations in property values over time.


Category of

shareholder

Pre Issue Post Issue

Total no.

Of shares

No of

Shares

Held in

Demateria

Lized form

Total

Shareholding

as a

% of total no

of

Shares

Number of

Equity

Shares

Percenta

Ge of

Equity

Share

Capital

(%)(A) Promoter

and

Promoter

group

Individual

/HUF

86,51,250 0 14.32 8651250 12.38

Bodies

Corporate

4,98,76,364 17,29,354 82.55 4,98,76,364 71.40

Total A 5,85,27,614 17,29,354 96.87 5,85,27,614 83.78

(B) Non

Institutions

18,92,645 70,950 3.13 18,92,645 2.712

Total (A+B) 6,04,20,259 18,00,304 100.00 6,04,20,259 86.50

(C) Public 9,429,750 13.5

Total Post-

Issue Share

Capital

(A+B+C)

69,850,009 100.00

Fundamentals:


Paid up capital 604.2 698.5Reserves 2853.6 8151.9Networth 3457.8 8850.4PAT 476.3 1062.4EPS 11.28 12.73P/E 39.64 51.89PEGEV/EBIDTA

Dividend 135.946* 40%, 45%Market Price 490 633.9


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52 week Lw/Hg - 603/845Book Value per share 108.83 126.7

Technical :


29/65

10th-Mar-2011 15:11 Source: BSE

Godrej Proper - Acquisition of Company

Godrej Properties Ltd has informed BSE that pursuant to approval of the Members in the

Annual General Meeting of the Company held on July 17, 2010, the Company has nowacquired the entire paid up share capital of Udhay GK-Realty Pvt. Ltd from HDFC Ventures

Trustee Company Ltd (in its Capacity as trustee of HDFC Property Fund organized as an

irrevocable contributory trust under the Indian Trust Act, 1882, pursuant to an Indenture of

trust dated November 6, 2004 investing through the scheme ''HDFC India Real Estate Fund).

New project in Gurgaon and Nagpur in sept

Bengaluru oct

The market may have cheeredJet Airways ' deal with Godrej Properties to jointly

develop its (Jet's) land at Bandra Kurla Complex, but it could be a while beforeprofits from the venture start rolling in.

Godrej Properties , the real estate development arm of Godrej Group, today launched its

youtube Channel with an aim to offer viewers an easy access to videos of its upcoming and

ongoing projects pan-India.

Walkthroughs of projects including apartments will be posted to highlight various amenities

and facilities that the project would provide thus giving viewers a chance to get an actual feel

of the property
http://www.moneycontrol.com/india/stockpricequote/transport/jet-airways/JA01http://www.moneycontrol.com/india/stockpricequote/constructioncontracting-real-estate/godrej-properties/GP11http://www.moneycontrol.com/india/stockpricequote/constructioncontracting-real-estate/godrej-properties/GP11http://www.moneycontrol.com/india/stockpricequote/transport/jet-airways/JA01http://www.moneycontrol.com/india/stockpricequote/constructioncontracting-real-estate/godrej-properties/GP11http://www.moneycontrol.com/india/stockpricequote/constructioncontracting-real-estate/godrej-properties/GP11


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Analysis:

If we look at the Fundamentals of the company it looks very strong which is also evident from the

fact that the ICRA Limited has graded Godrej Properties with 4 out of 5. From the above table it is

clear that the fundamental parameters has increased when pre and post issue figures are compared.Net

worth of the company has increased 2.56 times which shows the company is flourishing and profit is

increasing year on year. If we look at the current P/E ratio it is much higher (about 4 times) than the

Industry average of 13.97. Very high P/E may be attributed to the increase in price of the stock.

Company has also paid fair dividend (40% in 2010 & 45% in 2011).

If we see the technical chart of Godrej Prop. We can make out that the stock has always been traded

at a price higher than its issue price since its launch which is also evident from the 52 weeks low/high

price. Another thing to be noticed is that although the realty sector was on a downturn in 2011 butstill Godrej Prop stock maintained its consistency in terms of pricing and trading which shows that

although the investors have negative sentiment for the realty sector but has some hope with this stock.

The investors are optimistic with the stock as there were certain positive news too about the company

starting few new projects and acquisition too.

One more thing to be noticed is that as the book value of the firm increased about

25% the market price of the stock also increased 25% thus reflecting that the

overpricing of this stock is justified by the investors and the fundamentals of the

company.

3. Bajaj Corp:

(August 2010)

Sector: Personal care

About the Company:

Bajaj Corp was originally incorporated as Bhaumik Agro Products Private Limited on April 25,2006 under the Companies Act with the roc, Maharashtra. The name of the Company was

changed to Bajaj Corp Private Limited pursuant to a special resolution of the shareholders ofthe Company dated July 18, 2007. Pursuant to a special resolution of the shareholders of theCompany on September 14, 2007, the Company was converted into a public company, and thename of our Company was further changed to Bajaj Corp Limited. We commencedmanufacturing and sale of our products in April 2008. Our products have been in existencesince 1953 and were sold by different Bajaj group companies. BSL an erstwhile Bajaj groupcompany manufactured and sold our products until December 2000. In January 2001, pursuantto a scheme of demerger, BSL transferred its operating business and assigned the trademarksfor all the brands to its subsidiary Deccan Ayurvedashram Pharmacy Limited whichsubsequently changed its name to BCCL. Subsequently, pursuant to the execution of the

Trademark License Agreement between BCCLAnd Bajaj Corp, BCCL assigned the trademarks for the products in favour of Bajaj Corp.

About the Issue :


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Public issue of up to 4,500,000 equity shares of Rs. 5/- each of Bajaj Corp Limited

For cash at a price of Rs. 660/- per equity share (including a share premium of Rs. 655/- per equity

share) aggregating to Rs. 2,970 million. The issue will constitute 15.3 % of the post-issue paid-up

equity capital of our company. The face value of the equity share is Rs. 5/- each and the issue price is

132 times the face value.This Issue has been graded by CRISIL Limited as IPO Grade 4/5, indicating

that the fundamentals of the IPO of our Company are above average relative to other listed equity

securities in India.

Risk Factors :

1. Approximately Rs. 2,200 million, which is approximately 74% of our Issue size, will be

utilized for promotion of future products and will not result in the creation of any tangible assets.

2. We have not yet identified targets for acquisition or brand building campaigns for using the

proceeds from the Issue.

3. We depend heavily on Almond Drops and any factor adversely affecting this product or this

brand will negatively impact our profitability.

4. Our major brands command a pricing premium in the market and our inability to maintain

such a premium may adversely affect our profitability.


Cate

Gory

Code

Category of

Shareholder

Pre Issue Post Issue

Total

Number of

EquityShares

As a

Percent

Age of(A+B+C)

Total

Number of

EquityShares

As a

Percent

Age of(A+B+C)

Shareholding of

Promoter and

Promoter Group

A Promoter

Bajaj Consumer Care

Limited24,999,965 100.00 24,999,965 84.75

B Promoter Group 0 0 0

C

Total

Shareholding of

Promoter and

Promoter Group(C= A+B)

24,999,965 100.00 24,999,965 84.75

DPublic

Shareholding35 0 35

EPUBLIC IN THE

ISSUE- - 4,500,000 15.25

GRAND TOTAL

(C)+(D) + (E)25,000,000 100.00 29,500,000 100.00


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Fundamentals:


Paid up capital 125 147.5Reserves 154.12 3615.9Networth 256.10 3763.4PAT 839.13 841.0EPS 23.05 7.66*P/E 28.6 15PEGEV/EBIDTADividend 35.25% 190%Market Price 660 117.0552 week Lw/Hg - 89.66/132.3Book Value per share 109.36 25.51*

*Split 5:1

Technical :


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Analysis:

If we look at the fundamentals of the company it looks average which is also evident from the fact

that CRISIL has graded Bajaj Corp as 4 out of 5. From the above table it is clear that the fundamental

parameters has increased when pre and post issue figures are compared.Net worth of the company has

increased 146.95 times which shows that profit is increasing year on year. But if we look at the P/E

ratio it is low if compared with the Industry average of 37.43 which may be because of low price than

its peers. P/E post issue has decreased because of 1:5 Split of the stock.

If we see the technical chart of Bajaj Corp. We can make out that the stock has been traded at a price

lower than the issue price since its launch which is also evident from the prices of last 52 weeks.

Thus we see that although the company is paying good dividend but still it could not gain the

investors confidence may be because there is hardly any increase in PAT of the company. And

therefore investors did not accepted the overvaluation of the IPO.

4. Oberoi Realty:

(Oct 2010)

About the Company:

The Company was incorporated in Mumbai as Kingston Properties Private Limited on May 8, 1998

under the Companies Act. Pursuant to a circular resolution passed by the Directors dated October 12,

2009, ratified by the Directors on December 4, 2009 and resolution passed by the shareholders of theCompany at the EGM held on October 22, 2009, the name of the Company was changed to Oberoi


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Realty Private Limited for availing the benefits of the brand equity of Oberoi and with a view to

convey the right nature of activities of the Company. Consequent to the change in name, the

Company received a fresh certificate of incorporation dated October 23, 2009 from the roc,

Maharashtra. Thereafter, the Company was converted into a public limited company and pursuant to a

Board resolution dated December 4, 2009 and shareholders resolution passed at the EGM dated

December 4, 2009, the name of the Company was changed to Oberoi Realty Limited. Consequent to

its change of name, the Company received a fresh certificate of incorporation dated December 14,

2009 from the roc. The Company is involved in real estate development and has a diverse portfolio of

projects covering the residential, office space, retail, hospitality and social infrastructure segments of

the real estate market. Currently, we have projects in Mumbai and Pune.

About the Issue :

Public issue of 39,562,000 equity shares with a face value of Rs. 10 each (equity shares) of Oberoi

Realty Limited for cash at a price of Rs. 260 per equity share (including a share premium of Rs. 250

per equity share) aggregating to Rs. 10,286.12 million. The issue will constitute 12.00% of the fully

diluted post issue paid up equity share capital of the company.This Issue has been graded by CRISILLimited as 4/5 indicating that the fundamentals of the Issue are above average.

Risk Factors :

1- Certain of our Group Companies have incurred losses or have had negative net worth in the

three fiscal years ended March 31, 2010.

2- The funds proposed to be utilised for general corporate purposes may constitute more than25% of the proceeds of the Issue.

3- The development rights in respect of our Planned project at Sangam City, Sangamwadi are

subject to conditions, certain of which have not been or may not be satisfied; if these conditions are

not satisfied, this land may not be available for development by us.

4- We may not be able to fully develop our Planned project at Worli, Mumbai as presently

contemplated.

5- We have not obtained a written title opinion or search report in respect of our development

sites in Juhu, Mumbai and Sangamwadi, Pune.


Category of

Shareholders

Pre Issue Post issue

Promoter (A) 224,313,573 77.71 224,313,573 68.04

Promoter Group

(B)

33,302,442 11.54 33,302,442 10.10

Total Holding of

Promoter and

Promoter Group

(C=A + B)

257,616,015 89.24 257,616,015 78.14

Others (D) 31,055,247 10.76 32,498,603 9.86

Public (pursuant

To the Issue) (E)

39,562,000 12.00

Total 288,671,262 100.00 329,676,618 100.00


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Fundamentals:


Paid up capital 23.00 3641.3Reserves 554.02 16969.7Networth 577.02 20611.0PAT 350.80 1705.7EPS 1.25 7.36P/E 442.11 38.09PEG -EV/EBIDTA -Dividend 13.4% 10%, 20%Market Price 260 26652 week Lw/Hg - 201.55/325Book Value per share 58.39 61.7

Technical :


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Analysis:

If we look at the fundamentals of the company it looks very strong which is also evident from the fact

that CRISIL has graded Oberoi Realty as 4 out of 5. From the above table it is clear that the

fundamental parameters has increased when pre and post issue figures are compared.Net worth of the

company has increased 35.7 times which shows that profit is increasing year on year. But if we look

at the P/E ratio it is much lower than at the time of the issue which is because higher EPS but P/E is

still high as compared to industry may be because of lower EPS as compared to Industry.

If we see the technical chart the stock was trading at a price lower than the Issue price but in 2012 it

was trading at a price near to the issue price. This upward lift in the stock price may be because of the

uptrend of the market during the period and also if seen carefully the whole realty sector has an

uptrend during this period.

Thus we see that although the IPO was overvalued at the time of issue but still it was traded at a price

near to issue price depicting the confidence of the investors on the stock. This is also evident if we

look at the comparative chart of the realty sector and the Oberoi Realty where the sector has surgedmore than the Oberoi Realty during the period.


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5. Coal India :

(Nov 2010)

About the Company:

In order to provide for a higher growth in coal sector to meet the growing energy needs of the

country, the Government in 1973, nationalized the coal mines by enacting the Coal Nationalization

Act. Pursuant to the nationalization of coal mines, the company was incorporated as a private limited

company with the name of Coal Mines Authority Limited, under the Companies Act on June 14,

1973. Thereafter in 1975, Department of Coal, Ministry of Energy, goi, with a view to integrate and

streamline the structural set up in a manner which could be conducive to a more efficient

administration, issued letter, providing for the re-organisation of Coal Mines Authority Limited as

Coal India Limited, which was to be responsible for the entire coal mining sector owned and

controlled by the Central Government.

In compliance with the direction from the Ministry of Energy, Department of Coal, and pursuant to a

resolution of the shareholders dated October 15, 1975 and approval of the Ministry of Law, Justice

and Company Affairs, the name of the Company was changed to Coal India Limited .

About the Issue :

Public offer of 631,636,440 equity shares of face value of Rs. 10 each of Coal India limited through

an offer for sale by the President of India, acting through the Ministry of Coal, Government of India

for cash at a price of Rs. 245 per equity share aggregating up to Rs. 154,750.93 million. The offer

comprises a net offer to public of 568,472,796 equity shares (the net offer) and a reservation of

63,163,644 equity shares for subscription by eligible employees (the employee reservation portion).

The offer shall constitute 10.00% of the post offer paid-up equity share capital of our company and

the net offer shall constitute 9.00% of the post offer paid-up equity share capital of our company.This

Offer has been graded by CRISIL Limited, ICRA Limited and Credit Analysis & Research

Limited, and has been assigned the CRISIL IPO Grade 5/5, IPO Grade 5/5 and CARE

IPO Grade 5/5, respectively, indicating that the fundamentals of the Offer are strong relative

to the other listed equity securities in India.

Risk Factors :

1- If we are unable to acquire land and associated surface rights to access our coal reserves, we

may be unable to mine coal from our reserves which could materially and adversely affect ourbusiness, results of operations and financial condition.

2- Our coal mining operations have been adversely affected by illegal mining and pilferage of

coal from our mines.

3- The goi will continue to control us post listing of our Equity Shares.4- The interests of the goi as our controlling shareholder may conflict with your interests as ashareholder.

5- We are subject to risks arising from exchange rate fluctuations.

6- Any increase in transportation costs that we are unable to pass on to our customers could

have an adverse effect on our business and results of operations.


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Shareholding Pattern of Coal India Ltd.:

Shareholders Pre Issue Post Issue

No. Of Equity

Shares

Percentage of

Shareholding

No. Of Equity

Shares

Percentage of

Shareholding

Promoter (A) 6,316,363,800 99.99 5,684,727,360 89.99

Others (B) 600 600

Public

shareholding (C)

6,316,364,400 100.00 631,636,440 10.00

Total (A+B+C) 6,316,364,400 100.00 6,316,364,400 100.00

Fundamentals:


Paid up capital 63163.4 63163.6Reserves 124362.28 131210.2

Networth 187525.92 194373.8PAT 31692.95 47235.6EPS 5.43 13.03P/E 42.1 25.83PEG - -EV/EBIDTA - -Dividend 30% 39%Market Price 245 327.552 week Lw/Hg - 293.6/422.35Book Value per share 29.69 30.77

Technical :


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Analysis:

If we look at the fundamentals of the company it looks to be very strong which is also evident

from the fact that CRISIL, ICRA and CARE, all the three rating agencies has graded the

company as 5 out of 5. From the above table it is clear fundamental parameters such as

networth has increased when pre and post issue figures are compared.PAT is showing a growth

of about 50% in just one year wich is a substantial growth rate. If we look at the P/E ratio it is


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lower than at the time of the issue and it may be because of increase in EPS but P/E is still high

as compared to industry average may be because of high price as compared to its peers.

If we see the technical chart the stock was trading at a price which on an average was near to

its issue price. Thus although being an overvalued stock it was able to gain the confidence of

investors and has traded at a high price even though the market was showing a slight downturn.

If we see the last 52 weeks low/high price then we observe that it has traded above the issue

price and that the investors has well accepted thid overvalued stock as it has strong

fundamentals, goi as promoters and the company is paying handsome dividends too.

6. Muthoot Finance:

(May 2011)About the Company:

The Company was originally incorporated as a private limited company on March 14, 1997 under the

provisions of the Companies Act, 1956, with the name The Muthoot Finance Private Limited.

Subsequently, by a fresh certificate of incorporation dated May 16, 2007, the name was changed to

Muthoot Finance Private Limited. Our Company was converted into a public limited company on

November 18, 2008 with the name Muthoot Finance Limited and received a fresh certificate of

incorporation consequent to change in status on December 02, 2008 from the Registrar of Companies,

Kerala and Lakshadweep.

About the Issue :

Public issue of 51,500,000 equity shares of face value Rs10 each (the equity share) for cash at a

price of Rs175 per equity share including a share premium of Rs165 per equity share, aggregating

upto Rs9,012.50 million (the issue) by Muthoot Finance Limited. The issue will constitute 13.85%

of the fully diluted post issue paid-up equity share capital of our company.

This Issue has been graded by CRISIL Limited and ICRA Limited and has been assigned the IPO

Grade 4/5 by both grading agencies, in their letters dated March 09, 2011 and March 07, 2011

respectively, indicating that the fundamentals of the Issue are above average relative to other listed

equity shares in India.

Risk Factors :

1- Our customer base comprises mostly individual borrowers, who generally are more likely to

be affected by declining economic conditions than large corporate borrowers.

2- Because we handle high volume of cash and gold jewellery in a dispersed network of

branches, we are exposed to operational risks, including employee negligence, fraud, petty theft,

burglary and embezzlement, which could harm our results of operations and financial position.


Category of Pre Issue Post Issue


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Shareholder

No. Of shares

% No. Of shares

%

(A)

Shareholding

Of Promoter

AndPromoter

Group

Individuals/HUF

297,797,872 93.00 297,797,872 80.12

(B)Public

Shareholding

Bodies Corporate 22,414,896 7.00 73,914,896 19.88Total (A)+(B)

320,212,768 100.00 371,712,768 100.00

Fundamentals:


Paid up capital 3202.13 3717.1Reserves 8112.42 24916.9

Networth 11314.55 28633.0PAT 2914.84 4941.8EPS 5.39 21.42P/E 32.47 6.08PEGEV/EBIDTADividend Nil NilMarket Price 175 16452 week Lw/Hg - 120.8/218.4Book Value per share 54.68 77.03

Technical :


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Analysis:

If we look at the fundamentals of the company it looks above average which is also evident from the

fact that both CRISIL and ICRA have graded Muthoot Finance as 4 out of 5. From the above table it

is clear that the fundamental parameters has increased when pre and post issue figures are

compared.Net worth of the company has increased 2.53 times which shows that profit is increasing

year on year. But if we look at the P/E ratio it is very low if compared with the Industry average of

17. 1 and it has also decreased than the P/E at the time of the Issue. Company has not paid any

dividend in the last two years.


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If we see the technical chart of Muthoot Finance we see that the stock has been traded at the price

which was hovering near the issue price. Thus being a high priced IPO the stock was well accepted by

the investors. In the end of the chart the sharp drop in the price is seen which may be because of the

news that the loan of the company has increased by 16-20%. Other than that the price is flowing with

the market sentiment which is seen in the comparison of the stock price with the Sensex .

UNDERVALUED IPOS

7. Aqua Logistics Ltd:

(Feb 2010)

About the Company:

The Company was originally incorporated as Aqua Logistics Private Limited on September 20, 1999

under the Companies Act, 1956 vide Certificate of

Incorporation issued by the Registrar of Companies, Mumbai. The Company was converted into a

public limited company vide fresh Certificate of Incorporation dated March 05, 2009 and

subsequently the name of the Company was changed to Aqua Logistics Limited.

About the Issue :

Public issue of 68,72,852 equity shares of Rs.10/- each for cash at a price of Rs. 220 per equity share

(including a premium of Rs. 210 per equity share) for non institutional and QIB bidders and Rs. 215

per equity share (including a premium of Rs. 205 per equity share) for

Retail Individual bidders aggregating upto Rs. 15,000 lacs (the issue), by aqua logistics limited.The

Issue will constitute 33.53% of the fully diluted post issue paid-up capital of our company. The net

issue to public will constitute 33.53% of the fully diluted post issue paid-up capital of our company.

The Issue has been graded by Brickwork Ratings India Private Limited and has beenassigned a grade of 3/5 indicating average