ipo india infoline.doc

Executive Summary

IPO stands for Initial Public Offer. An IPO is the first sale of common stocks by a

corporation to the public.

I have undertaken the project at INDIA INFOLINE is a leading full service securities firm

providing the entire gamut of financial services. INDIA INFOLINE provides a breadth of

financial and advisory services including wealth management, investment banking, corporate

advisory, brokerage & distribution of equities, commodities, mutual funds and insurance,

structured products - all of which are supported by powerful research teams. INDIA

INFOLINE has opened its branch in Belgaum in 2005. Since 2005 it has delivered fair &

impressive services. At present INDIA INFOLINE’s customer database is more than 7000.

These customers are loyal & are availing regular services from INDIA INFOLINE. It has got

more than 700 DEMAT account holders.

The project deals with the “Awareness level of IPO among investors at INDIA

INFOLINE”.

1. INTRODUCTION

, This Project Work focuses on the select subject and a project report. As a part of

fulfillment of this requirement a project was taken up at INDIA INFOLINE on “Awareness

Level of IPO Investors at INDIA INFOLINE”. The project covers detailed data collection,

interaction with the subject experts, interpretation analysis in the light of present economic

and stock market scenario. The final details are as under:

1.1Statement of the Problem:

Initial Public Offer (IPO) is one of the financing means which is widely used by the

corporate world all over, for meeting the financing needs of the new as well as on going

companies. Therefore it is proposed to study the awareness level of IPO among Investors at

INDIA INFOLINE. Thus the statement of the problem is as under:

“To study the awareness level of IPO among investors at INDIA INFOLINE”

1.2 Objectives of the study:

MAIN OBJECTIVE:-

To study the awareness level of IPO among investors at INDIA INFOLINE.

Sub objectives:-

To study how INDIA INFOLINE guides the Investors to apply for IPO’s.

To study how INDIA INFOLINE is guiding their investors regarding the amount and

no of shares to apply for an IPO.

To study the factors considered by INDIA INFOLINE in knowing the company who

float IPO’s.

To identify the difficulties faced by Investors while applying for IPO.

To study the marketing methods adopted by the companies for creating awareness

about their IPO.

1.3Scope of the Study:

The scope of the study covers

Marketing methods adopted by the INITIAL PUBLIC OFFER (IPO’s).

Analysis based on the facts and figures at INDIA INFOLINE,

Interactions with the subject experts at INDIA INFOLINE,

Interactions with the IPO investors at INDIA INFOLINE etc.

1.4Research Methodology:

Primary Sources:

o Data comprising of Facts & Figures

o Statistical and Mathematical techniques

o Graphical analysis

o Analysis by the subject experts etc

o Online Trading on Major Stock Exchanges BSE and NSE

Secondary Sources:

o Data from print media and electronics media.

o Data Available in the websites, Company records etc.

1.5Limitations of the study:

Analysis is purely based on the historical data and its behavior in the past.

The future marketing behavior and the economic issues of national and global level

that might influence can not be envisaged at this point of time.

The findings are limited to the scope, survey records, selection of IPOs and the

limited analysis that could be arranged within the time available for completion of the

project.

2. RESEARCH DESIGN

The project has been carried out with the main focus on the subject of the project and

detailed research findings in the backdrop of Indian corporate, economic, stock market

scenario 2009-10. The research methodology adopted to arrive at the conclusion of the

project is underlined below:

Definition of the project theme.

Statement of the problem.

Collection of the Primary, Secondary and other data/information.

Source identification for data and information collection.

Use of identified sources for data and information collection which are Print media,

Outdoor publicity, Institutional marketing, Expert opinion, Sponsorship of Events,

Publicity events – Business fairs, exhibitions etc.

Live working on the stock market with reference to project theme and statement of the

problem.

Analysis and interpretation of the data collected from selected sources.

Practical survey through a well defined questionnaire of 50 investors of INDIA

INFOLINE.

Discussions with subject experts to arrive at findings.

Arriving at conclusion/ findings of the project study

PROFILE

3.1 Industry Profile:

Earliest records of securities trading in India are available from the end of eighteenth

century. Before 1850 there was business conducted in Mumbai in the share of bank and the

securities of east India Company, which were consider as securities for buying, selling and

exchange. The share of commercial bank, mercantile bank and bank of Bombay were some of

the prominent shares traded. The business was conducted under a sprawling banyan tree in

front of the town hall, which is known in the horniman circle park.

In 1850, the companies act was passed and that heralded the commencement of join

stock companies in India.

It was the American civil war that helped Indians to established broking business. The

leading broker, Shri Premchand Roichand designed and developed a procedure to be

followed while dealing in shares.

In 1874 the dalal street became the prominent place for meeting of the brokers to

conduct there business. The broker organized an association on 9th July 1875 known as native

share and stock broker association to protect the character, status and internet of the native

brokers. That was the foundation of the stock exchange, Mumbai. The exchange was

established with 318 members. The stock exchange, Mumbai did not have to look back as it

started raiding high ladder of growth.

The stock exchange is a market place, like any other centralize market where buyers

and sellers can transacted business in securities at given point of a time in a convenient and

competitive manner at the fairest possible prizes.

In Jan 1899, Mr. James M MacLen, MP inaugurated the brokers hall. After the first

world war the stock exchange was housed properly at an old building near the Town hall

in1928, the present premises where acquired surrounded by Dalal street, Mumbai samachar

marg and hamam street. A new building a present location was constructed and was occupied

on 1st Dec 1930.

In 1950 the regulation of business in securities and stock exchange became an

exclusively central Government sub following adaptation of constitution of India. In 1956,

the security contract act was passed by the parliament of India. To regulate the securities

market, SEBI was initial established on Oct 12 1988 as an interim board under control of

ministry of finance, Government of India. In 1992, SEBI act was passed through which the

SEBI came into existence. Hence SEBI acquired statutory status on 30th Jan 1992 by passing

an ordinance, which was subsequently converted into an act passed by the parliament on

April 4th 1992. The main objective of SEBI is to protect the interest of investor, regulate and

promote the capital market by creating an environment, which would facilitate mobilization

of resources through epiciant allocation and to generate confidents among the investor. As

such SEBI is responsible for regulating stock exchanges and other intermediaries who may be

associated with capital market and the process of the public companies rising capital by

issuing instrument that will be traded on capital market. SEBI has been empowered by the

central government to develop and regulate capital markets in India and there by protect the

interest of investors.

In 1992, OTCI (Over the counter exchange of India) came in to existent where

equities of small companies are listed.

In 1994, NSE(national stock exchange) came in to existent which brought an and to

the open but cry system of trading securities which was in vogue for 150 years, and

introduced screen based trading system.

BSE (Bombay stock exchange) online trading system was launched on March 14th

1995. Know the trading in securities is down using screen based trading method through only

authorized members of the exchange.

In screen based trading, investor place there buy and sale orders with brokers whose

enter the orders in the automated trading system. When buy and sale order matches, a trade is

generated and trade details or given to respective brokers. After a trade has taken place, the

buyer has to pay money and seller has to deliver the securities

On the stock exchange hundred & thousands of trades take place every day. Buyers

and sellers are spread over a large geographical area. Due to these problems completing a

trade by paying cash to the seller & securities to buyer immediately on execution of trades on

an individually basis is virtually impossible. So the exchange allows trading to take place for

a specified period which is called trading cycle. A unique settlement number identifies each

trading cycle. Once the trading period is over, buyer broker pays money and seller broker

delivers securities to the CC/CH on a predefined day. This process is called as pay in. after

pay in securities are given to the buyer brokers and money is given to seller brokers by the

CC/CH. This process is called as pay out. This process pay in & pay out is called settlement.

Initially the trading cycle was of one fortnight, which was reduced to one week. The

transactions entered during this period, of a fortnight or one week, were used to be settled

either by payment for purchase or by delivery of shares certificates sold on notified days one

fortnight or one week of expiry of the trading. The settlement schedules are made known to

the members of the exchange in advance.

The weekly settlement period was reduced by daily settlement popularly known as

rolling settlement, in which each day is separate trading day. With effect from December

2001, t+% rolling settlement cycle was introduced for all equities where T is the trading day

and pay in & pay out for the settlement was done on the 5th business day after the trade day.

For e.g. If T was Monday, the pay-in & pay-out were done on next Monday as Saturday &

Sunday are not counted as business days. T+5 cycles were further shortened to T+3

settlement cycle.

3.2Company Profile:

India Infoline was Launched on 11 May 1999 with SEBI REGN. NO. : INB

231097537 & CODE NO. : 10975, Regd. & Dealing Office : Building No. 24, 1st

Floor, Nirlon Limited Compound, Western Express Highway, Goregaon (E),

Mumbai - 400 063.www.indiainfoline.com is India’s leading and most

comprehensive business and financial information website. The site made

available quality information and analysis - earlier restricted to a few people -

to the common man absolutely free. The site met with an overwhelming

response and has been reviewed as the most comprehensive financial content

website in India by BBC World - Money Watch, Business World, Business Line

and others. The company also won the Golden Mouse Award in India Internet

World 2000 for the Best Finance site. In May 2001, our website was included

in the Top 200 Best of the Web list by Forbes Global under the Asia Investing

category. We were the only website from India to be featured in any category.

Since then it has been nominated twice to this list. In its last review, Forbes

editors have said, "www.indiainfoline.com is a must read for the investors in

South Asia..."Our research is also disseminated electronically through

Bloomberg, Investext, First Call/Thomson Financial and Internet Securities. On

First Call/Thomson Financial, we have been one of the largest read research

houses from Asia, which is a testimony to the quality and timeliness of our

reports.

The offerings on the site include a combination of information and

transaction services. Transaction services include mutual funds, personal loans

and online broking through www.5paisa.com. India Infoline was the first

company to offer many of these services in the country. In online broking, we

have emerged as a leading player offering online trading facilities with

significant market share. As on date, the Group employs 4000 plus employees,

most of them are placed at its various branches across India. About INDIA

http://www.indiainfoline.com/

http://www.5paisa.com/

http://www.indiainfoline.com/index_1024_main.shtml

INFOLINEIt is a one-stop financial services shop, most respected for quality of

its advice, personalized service and cutting-edge technology

Vision

Its vision is to be the most respected company in the financial services space

India Infoline Ltd. India Infoline Ltd is listed on both the leading stock exchanges

in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange

(NSE). The India Infoline group, comprising the holding company, India Infoline

Ltd and its subsidiaries, straddles 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. India Infoline also owns and manages

the websites, www.indiainfoline.com and www.5paisa.com .

http://www.5paisa.com/

India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and Exchange Board of India). It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and '…a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where it is amongst the most read Indian brokers.

Its various subsidiaries are in different lines of business and hence are governed by different regulators. The subsidiaries of India Infoline Ltd are India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of Equities broking and Portfolio Management Services. It holds memberships of both the leading stock exchanges of India viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE.A SEBI authorized Portfolio Manager, it offers Portfolio Management Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of client

India Infoline Commodities Pvt Ltd

India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline

Ltd, which is engaged in the business of commodities broking. Our experience

in securities broking empowered us with the requisite skills and technologies

to allow us offer commodities broking as a contra-cyclical alternative to

equities broking. We enjoy memberships with the MCX and NCDEX, two

leading Indian commodities exchanges, and recently acquired membership of

DGCX. We have a multi-channel delivery model, making it among the select

few to online as well as offline trading facilities.

India Infoline Distribution Co Ltd (IILD)

India Infoline.com Distribution Co Ltd is a 100% subsidiary of India

Infoline Ltd and is engaged in the business of distribution of Mutual Funds,

IPOs, Fixed Deposits and other small savings products. It is one of the largest

'vendor-independent' distribution houses and has a wide pan-India footprint

of over 232 branches coupled with a huge number of 'feet-on-street', which

help source and service customers across the length and breadth of India. Its

unique value proposition of free doorstep expert advice coupled with free

pick-up and delivery of cheques has been met with an enthusiastic response

from customers and fund houses alike. Our business has expanded to include

the online distribution of mutual funds, wherein users can view and compare

different product offerings and download application forms which they can

later submit to the product provider

Mortgages & Loans IILD has also entered the business ot distribution of

mortgages and loan products during the year 2005-2006. The business is still

in the investing phase and We plan to roll the business out across its pan-

Indian network to provide it with a truly national scale in operations.

India Infoline Insurance Services Ltd

India Infoline Insurance Services Ltd is also a 100% subsidiary of India

Infoline Ltd and is a registered Corporate Agent with the Insurance Regulatory

and Development Authority (IRDA). It is the largest Corporate Agent for ICICI

Prudential Life Insurance Co Ltd, which is India's largest private Life Insurance

Company

India Infoline Investment Services Ltd

India Infoline Investment Service Ltd is also a 100% subsidiary of India

Infoline Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and

offers margin-funding facility to the broking customers

India Infoline Insurance Brokers Ltd

India Infoline Insurance Brokers Ltd is a 100% subsidiary of India Infoline Ltd

and is a newly formed subsidiary which will carry out the business of

Insurance broking. We have applied to IRDA for the insurance broking licence

and the clearance for the same is awaited.

Services Offered By India Infoline.

Here’s a look at the rocketing list of what’s on offer from The India Infoline Group:

Equity Trading and Stock Broking :-

Cash and Derivatives segments. Member - BSE and NSE, DP with NSDL.

Portfolio Management :-

SEBI-registered, backed by a pool of analysts with over 200 man-years in managing portfolios.

Research & Analysis :-

Exhaustive information and data mining, covering the spectrum of Indian business, industry and financial markets.

Mutual Funds :-

Primary agent for the entire phalanx of leading funds. Something to suit every risk profile.

Life Insurance :-

Leading corporate agent of ICICI Prudential Life Insurance Company, miles ahead of the runner-up!

Commodities Broking :-

Member of the Multi- Commodities Exchange (MCX). Again, rock-bottom brokerage and quality research support. Fixed Income Instruments: From Fixed Deposits, Post Office Saving schemes to RBI Tax Saving and Infrastructure Bonds.

3.3 SERVICE PROFILE: IPO & ITS MARKETING SCENARIO IN BRIEF

INDIA INFOLINE is one of the leading companies providing services to subscribe to

the IPO’s along with regular stock broking services. The company provides very vital

information about all the forthcoming IPO’s which is very helpful for the investors to decide

about the investing in the IPO’s. It also provides for margin money for IPO’s based on the

investment of the investor.

Theoretical Background

Since beginning IPO is one of the major and low cost financing to meet the financial

needs of the corporate world. IPO is the means of financing for setting up a new company as

well as expansion, diversification of the existing companies. Some of the key aspects of IPOs

are as under:

What is an IPO?

• An Initial Public Offering of the shares of a company’s stock

• A way for companies that need capital for growth to sell ownership stakes to

Investors who believe in a company’s future prospects. The first offering of the

companies shares to the public. The shares offered may be the existing one held privately, or

the company may issue new shares to the public. A formal public offer consist of an

invitation to the public for subscription of the equity shares, preference shares or debentures

has to be made by a company highlighting the details such as future prospectus, financial

viability and analyze the risk factor so that an investor can take an informed decision to make

an investment for this purpose, the company issue a prospectus in case of public issue and a

letter of offer in case of right issue which is essentially made to its existing share holders this

document generally known as offer document. It has information about business of the

company, promoters and business collaboration, management the board of directors, cost of

the project and the means of finance, status of the project, business prospectus and

profitability, the size of the issue, listing, tax benefits if any and the names of underwriters

and the managers to the issue etc.

Identify Issues

• Composition of working group

• Structure of offering

• Time schedule and assignment of tasks

• Legal considerations

• Publicity

• Financial and accounting matters

Composition of Working Group

Hire the Team

• Co-managers

• Issuer’s counsel

• Underwriters’ counsel

• Accountants

Organize the Internal Team to Address the Following• Structure

• Strategy

• Due diligence

• Disclosure

Structure of Offering

• Size of offering

• Primary and secondary components

• Number of shares authorized

• Existing shareholder list

• Lock-up agreements with company, principal shareholders, officers, directors

• Selection of listing exchange

• Selection of stock symbol

• Use of proceeds

Publicity and Promotion of IPO

Quiet period

Industry presentations

Press releases/other corporate announcements

Interviews or articles on company to be published

Extensive use of electronic media such as TV, Website, Mobile Phones etc.

Publicity on hoardings and other public place advertisements.

Road Shows and exhibitions.

Use of Call Center services

Pricing Overview

Once the intended pricing date has been determined, investors are informed of the day

and time on which the book will be closed (i.e., the deadline for submitting

indications of interest)

Once the book has been closed, the lead manager, in consultation with the co-

managers, reviews the book of demand in order to assess:

Strength of demand

Price sensitivity

Investors’ allocation expectations

Likelihood of aftermarket buying/selling

At the time of pricing, the lead manager reviews the book with the Issuer and

recommends an offering price which, in his judgment, will maximize the offering

proceeds to the Issuer consistent with a favorable after market performance.

Once the Issuer and the managers have agreed on an offering price, the underwriting

agreement and the inter syndicate agreements are signed.

Factors Deciding IPO Price:

Promoters and their background.

Current National and Global economic scenario.

Sector specific issues in which company will be operating.

Tie up with financial institutions.

Investors’ outlook for the company.

Merits of IPO:

Low cost financing

No commitment of fixed returns.

No restrictions attached to financing.

No issues such as mortgaging, hypothecation etc.

Entire money received in one stroke without linking to any milestones.

No issues with returning of finance.

Demerits:

Success of IPO has an element of risk.

IPO can only finance part of the project

IPO performance post listing has also bearing.

For new promoters and new company it is difficult to market their IPOs

3.4 Marketing of INITIAL PUBLIC OFFER’s Introduction:

As stated earlier in the study IPO is one of the low cost financing of new companies

as well as existing companies.

The success of IPOs depends upon many factors such as:

Project Feasibility

Promoters background and past experience

Economic factors

Sector growth

Others

However, the most vital factor influencing success of IPO is marketing of IPO’s which

aims at presenting the right kind of information about the above factors in the most

appropriate and impressive way to the target investors so that investors are convinced to

invest in the IPOs

Channels of Marketing:

A detailed study made under this project reveals that most of the good IPOs are using

the following marketing channels widely to have a focused and far reaching impact on the

investors and their decision of investment.

1. Print media

2. Outdoor publicity

3. Institutional marketing

4. Expert opinion

5. Sponsorship of Events

6. Publicity events – Business fairs, exhibitions etc

Marketing Mix:

Most of the companies have different marketing (channel) mix to promote their IPOs,

though one can use exhaustively all channels for better marketing of IPOs, but the cost of

IPOs will proportionally increase accordingly.

The company will have to select the marketing mix based on the budgeted cost of the

IPOs. The marketing challenge lies in selecting the right channels wherein the cost is

minimum and the marketing impact on the investors is maximum.

Cost of Marketing:

The cost of marketing of an IPO is the most important factor and every company

wants to keep it at minimum. For each IPO, the cost is fixed well in advance (budget) and the

companies will be operating the marketing of IPOs within this budgeted cost. From the

current study conducted. It is seen that the organization spend heavily on the marketing of

IPOs, as most of them use e-media which is the costliest channel of marketing.

The cost of IPOs varies 5% to 15%. Following are some of the IPO cost which went

into public during 2009-2010

4. Analysis and Interpretation

4.1 PART A: Analysis and Interpretation:

Marketing of IPO’s and Channels of Marketing Used:

For the purpose of this study a select list of 10 companies has been used which went

into IPO issue during 2009-10 which used different channels of marketing for their IPO’s.

This select list of IPO comprises of Small, Medium and Big IPO issues of 2009-10.

The findings are as under:

Name of the Company:

Godrej Properties Limited

Sector

Real Estate

Size

Rs. 94 Lakhs

Price Band

Rs. 490-530

IPO amount (Rs lakhs)

Rs 584 Lakhs

Channels of Marketing used

Print

Television

Websites

Hoarding

Publicity/ Expert Opinion

Brokers/ Agents


Cox & Kings India Limited

Sector

Travel

Size

Rs. 185 Lakhs

Price Band

Rs. 316-330


Rs 61039 Lakhs


Print

Television

Websites

Mobile

Hoarding


Brokers/ Agents


India Bulls Power Limited

Sector

Power

Size

Rs. 3398 Lakhs

Price Band

Rs. 40-45


Rs 152970 Lakhs


Print

Television

Websites

Mobile

Hoarding


Brokers/ Agents


Pipava Shipyard Limited

Sector

Shipping

Size

Rs. 855 Lakhs

Price Band

Rs. 55-60


Rs 49561 Lakhs


Print

Television

Websites

Mobile

Hoardings


Brokers/ Agents


Oil India Limited

Sector

Oil

Size

Rs. 264 Lakhs

Price Band

Rs. 950-1050


Rs 277725 Lakhs


Print

Websites

Mobile

Hoarding


Brokers/ Agents


National Hydro Power Corporation (NHPC) Limited

Sector

Power (Public Sector Unit)

Size

Rs. 16774 Lakhs

Price Band

Rs. 30-36


Rs 603855 Lakhs


Print

Television

Websites

Hoarding


Brokers/ Agents


Mahindra Holidays & Resorts India Limited.

Sector

Tourism

Size

Rs. 93 Lakhs

Price Band

Rs. 275-325


Rs 27796 Lakhs


Print

Websites

Hoarding


Brokers/ Agents


Hathway Cable & Datacom Limited.

Sector

Telecom

Size

Rs. 228 Lakhs

Price Band

Rs. 240-265


Rs 54612 Lakhs


Print

Websites

Brokers/ Agents


Vascon Engineers Limited

Sector

Engineering

Size

Rs. 108 Lakhs

Price Band

Rs. 160-185


Rs 17820 Lakhs


Print

Websites

Brokers/ Agents


Infinite Computer Solutions (India)

Sector

Information Technology

Size

Rs. 115 Lakhs

Price Band

Rs. 155-165


Rs 18980 Lakhs


Print

Websites

Brokers/ Agents

PERFORMANCE OF IPO’s BASED ON MARKETING

For the purpose of this study a select list of 10 companies has been used which went

into IPO issue during 2009-10. This select list of IPO comprises of Small, Medium and Big

IPO issues of 2009-10. The performance is analyzed based on IPO issue price band vis-à-vis

52 weeks high low and the current market price (closing market price of 10.5.2010)

The findings are as under:


Godrej Properties Limited

Sector

Real Estate

Size

Rs. 94 Lakhs

Price Band

Rs. 490-530


Rs 584 Lakhs

Date of IPO

Open: 12-9-2009

Close: 14-9-2009

Listing Date: 5-1-2010

52 Weeks

High: Rs 586.70

Low: Rs 446.90

Current Price: Rs. 486.45

Performance Rating: Average

Grade: 4


Cox & Kings India Limited

Sector

Travel

Size

Rs. 185 Lakhs

Price Band

Rs. 316-330


Rs 61039 Lakhs

Date of IPO

Open: 18-11-2009

Close: 20-11-2009


52 Weeks

High: Rs. 586.80

Low: Rs. 304.10


Performance Rating: Good

Grade: 4


India Bulls Power Limited

Sector

Power

Size

Rs. 3398 Lakhs

Price Band

Rs. 40-45


Rs 152970 Lakhs

Date of IPO

Open: 10-10-2009

Close: 15-10-2009


52 Weeks

High: Rs. 45.50

Low: Rs 26.00


Performance Rating: Bad

Grade: 3


Pipava Shipyard Limited

Sector

Shipping

Size

Rs. 855 Lakhs

Price Band

Rs. 55-60


Rs 49561 Lakhs

Date of IPO

Open: 16-9-2009

Close: 18-9-2009


52 Weeks

High: Rs. 89.50

Low: Rs. 47.65


Performance Rating: Very Good

Grade: 3


Oil India Limited

Sector

Oil

Size

Rs. 264 Lakhs

Price Band

Rs. 950-1050


Rs 277725 Lakhs

Date of IPO

Open: 9-9-2009

Close: 12-9-2009


52 Weeks

High: Rs. 1374.80

Low: Rs. 1019.00


Performance Rating: Good

Grade: 4


National Hydro Power Corporation (NHPC) Limited

Sector

Power (Public Sector Unit)

Size

Rs. 16774 Lakhs

Price Band

Rs. 30-36


Rs 603855 Lakhs

Date of IPO

Open: 17-08-2009

Close: 11-08-2009


52 Weeks

High: Rs. 39.75

Low: Rs. 29.5



Grade: 3


Mahindra Holidays & Resorts India Limited.

Sector

Tourism

Size

Rs. 93 Lakhs

Price Band

Rs. 275-325


Rs 27796 Lakhs

Date of IPO

Open: 23-6-2009

Close: 26-6-2009


52 Weeks

High: Rs. 574.00

Low: Rs. 306.64


Performance Rating: Very Good

Grade: 4


Hathway Cable & Datacom Limited.

Sector

Telecom

Size

Rs. 228 Lakhs

Price Band

Rs. 240-265


Rs 54612 Lakhs

Date of IPO

Open: 2-09-2010

Close: 2-11-2010


52 Weeks

High: Rs. 246.00

Low: Rs. 189.10



Grade: 3


Vascon Engineers Limited

Sector

Engineering

Size

Rs. 108 Lakhs

Price Band

Rs. 160-185


Rs 17820 Lakhs

Date of IPO

Open: 27-01-2010

Close: 29-01-2010


52 Weeks

High: Rs. 173.45

Low: Rs. 119.00



Grade: 3


Infinite Computer Solutions (India)

Sector

Information Technology

Size

Rs. 115 Lakhs

Price Band

Rs. 155-165


Rs 18980 Lakhs

Date of IPO

Open: 11-01-2010

Close: 13-01-2010


52 Weeks

High: Rs. 222.90

Low: Rs. 152.75

Current Price: Rs 155.50

Performance Rating: Average

Grade: 2

4.2 PART B: Analysis and Interpretation:

Keeping in mind with the theme of the project and statement of the problem, in order

to facilitate analysis and interpretation of the data and information collected a well defined

questionnaire containing selected 18 questions was framed and given to the various invertors

of INDIA INFOLINE comprising of big, medium and small investors in order to arrive at the

most realistic and correct findings

QUESTIONNAIRES

1. Are you aware of IPOs?

Are you aware about IPO

45 90.0 90.0 90.05 10.0 10.0 100.0

50 100.0 100.0

YesNoTotal

ValidFrequency Percent Valid Percent

CumulativePercent

Interpretation: 90% investors are well aware of IPOs

2. Do you invest in IPOs?

Interpretation: 82% of the investors, invest in IPOs

3. How much do you invest in IPO’s?

How much do you invest in IPO's?

2 4.0 4.0 4.022 44.0 44.0 48.019 38.0 38.0 86.07 14.0 14.0 100.0

50 100.0 100.0

1000-1000010000-5000050000-500000500000 and aboveTotal


CumulativePercent

Interpretation: 44% of the investors, invest around 10,000 to 50,000

and 38% of investors, invest around 50,000 to 5, 00,000

4. What is your expectation on IPO returns on listing?

What is your expectation on IPO returns?

3 6.0 6.0 6.017 34.0 34.0 40.023 46.0 46.0 86.07 14.0 14.0 100.0

50 100.0 100.0

upto 10%10%-50%50%-100%100% and aboveTotal


CumulativePercent

Interpretation: 46% of investors expect about 50% to 100% and 34% investors expect the returns upto 10% - 50%

5. What are your assessments of IPOs that have hit the market in 2010-11?

What are your assessments of IPO that have hit the market for the year2010-11

3 6.0 6.0 6.017 34.0 34.0 40.023 46.0 46.0 86.07 14.0 14.0 100.0

50 100.0 100.0

very goodgoodaveragebadTotal


CumulativePercent

Intrepretation: 36% of the investors feel the IPOs of the 2009-10

mraket were average and 24 % of investors feel both good and bad.

6. Is it better to invest in IPO or pick the same stocks on listing?

Is it better to invest in IPO or pick the same stock on listing

3 6.0 6.0 6.0

17 34.0 34.0 40.0

23 46.0 46.0 86.0

7 14.0 14.0 100.0

50 100.0 100.0

invest in IPOPick the same stock onlistingpartely invest in IPO andpick the stock on listingwait sometime afterlistingTotal


CumulativePercent

Intrepretation: 32% of the investors feel that its better to pick the

same stock on the listing. 28% investors feel they would partly invest

in IPO and pick the stock on listing.

7. What do you see before investing in IPOs?

Frequency Percent Valid Percent Cumulative Percent

Valid Promoters background 9 18.0 18.0 18.0

sector performance 18 36.0 36.0 54.0

performance of existing

companies16 32.0 32.0 86.0

premium amount 7 14.0 14.0 100.0

Total 50 100.0 100.0

Intrepretation: 36% of the investors say they go by sector performance and 32% of them say they go by the performance of the

existing companies.

8. What is the source of information you use?


Valid print 15 30.0 30.0 30.0

Electronic media 8 16.0 16.0 46.0

experts opinion 14 28.0 28.0 74.0

friends advice 13 26.0 26.0 100.0

Total 50 100.0 100.0

Intrpretation: 30% of investor say the source of information is print media, 16% say electronic media, 28% go with expert opinion and

26% agree to their friends advice.

9. How long are you trading in stock market and IPOs?


Valid 1year-2years 6 12.0 12.0 12.0

2years-5years 24 48.0 48.0 60.0

5years-10years 14 28.0 28.0 88.0

10years and above 6 12.0 12.0 100.0

Total 50 100.0 100.0

Intrepretation: 48% investors are trading for 2 years to 5 years

10. What is your advice to new investors in IPO?


Valid Go by only promoters 7 14.0 14.0 14.0

go by only premium 15 30.0 30.0 44.0

go by sector performance 21 42.0 42.0 86.0

go by all of the above 7 14.0 14.0 100.0

Total 50 100.0 100.0

Intrepreatation: 42% investors advice the new investors to go by only sector performance.

11. Do you go by the grading before investing?


Valid yes 24 47.1 47.1 47.1

no 27 52.9 52.9 100.0

Total51 100.0 100.0

Intrepretation: 52% investors does not go by the grading before investing.

12. How much percentage have you gained on IPO listing?


Valid below 10% 10 19.6 19.6 19.6

up to 10% 17 33.3 33.3 52.9

10%-15% 17 33.3 33.3 86.3

15% and above 7 13.7 13.7 100.0

Total 51 100.0 100.0

Intrepretation: 34% of investors say they have gained upto 10% and

10% to 15%

13. How do you come to know about the new IPO listings?

Frequency Percent Valid Percent

Cumulative

Percent

Valid through brokers 10 19.6 20.0 20.0

through television 10 19.6 20.0 40.0

through friends 19 37.3 38.0 78.0

through newspaper 11 21.6 22.0 100.0

Total 50 98.0 100.0

Intrepretation: 38% of the investors come to know about the new IPO listings through their friends

14. How do you feel about the procedure for applying for IPO’s?


Cumulative

Percent

Valid Easy 16 30.8 32.0 32.0

difficult 4 7.7 8.0 40.0

complicated 8 15.4 16.0 56.0

lengthy 22 42.3 44.0 100.0

Total 50 96.2 100.0

Intrepretation: 44% of the investors feel the proceedure for applying for an IPO is lengthy, 32% feel easy and simple.

15. Are you aware of the procedures before applying for the IPO’s?


Valid yes 31 62.0 62.0 62.0

no 19 38.0 38.0 100.0

Total 50 100.0 100.0

Intrepretation: 62 % of investors say yes and 38% says No about the awareness of the procedures before apllying for IPOs

16. Are you aware of the documents needed to apply for the IPOs?


Cumulative

Percent

Valid yes 40 80.0 80.0 80.0

no 10 20.0 20.0 100.0

Total 50 100.0 100.0

Intrepretation: 80 % of the investors are aware of the documents needed to apply for the IPOs. 20 % feel that they dont know.

17. What difficulties did you face after applying IPOs?


Cumulative

Percent

Valid Refund problems 8 16.0 16.0 16.0

No clarity in allotments 14 28.0 28.0 44.0

delay in crediting allotted

shares to your demat

account

15 30.0 30.0 74.0

none of the above 13 26.0 26.0 100.0

Total 50 100.0 100.0

Intrepretation: 30% of the investors say the delay in crediting allotted shares to the demat account. 28% say no clarity in allotment

and 26% say they never faced difficuties.

18. Do you read Disclaimer clause/ Red hearing prospectus before investing?


Cumulative

Percent

Valid yes 16 32.0 32.0 32.0

no 34 68.0 68.0 100.0

Total 50 100.0 100.0

Intrepretation: 32% investors read about the diclaimer clause and 68% investors does not read the disclaimer clause before investing.

Testing of Hypothesis

Q No. 1Hypothesis

(H0): less than or equal to 70% of the investors are aware about IPO.

(H1): More than 70% of the investors are aware about IPO.

Sample size (n) = 50

Method: Z test

H0=P<=70%

H1>P>70%

Standard error of proportion (for population)

p (bar) = p/ n

p(bar)=45/50=0.9

p^=√p(p-1)/n-1

p^=√0.9(0.9-1)/50-1

p^=√0.9(0.1)/49

p^=√0.09/49

p^=√0.0018

p^=0.042

Critical value = p + 2*p^

=0.7+1.96*0.042

=0.7+0.08232

=0.783

Test Statistic value

P= no. of favourable responses/ Sample size

= 45 / 50

= 0.9

Interpretation

H0 is rejected

H1 is accepted

Therefore More than 70% of the investers are aware about IPO.

Q No. 2Hypothesis

H0: less than or equal to 75% of the investors are interested to invest in IPO.

H1: More than 75% of the investors are interested to invest in IPO.


Method: Z test

H0=P<=75%

H1>P>75%


p (bar) = p/ n

p(bar)=41/50=0.82

p^=√p(p-1)/n-1

p^=√0.82(0.82-1)/50-1

p^=√0.82(0.18)/49

p^=√0.1476/49

p^=0.054


=0.75+1.96*0.054

=0.75+0.1058

=0.85


P= no. of favorable responses/ Sample size

= 41 / 50

= 0.82

Interpretation

H0 is accepted

H1 is rejected

Therefore less than 75% of the investors are interested to invest in IPO.

Q No. 3Hypothesis

H0: less than 70% of the investors agree that they get 50 to 100 percent return on IPO.

H1 More than 70% of the investors agree that they get 50 to 100 percent return on IPO.


Method: Z test

H0=P<=70%

H1>P>70%


p (bar) = p/ n

p(bar)=43/50=0.86

p^=√p(p-1)/n-1

p^=√0.86(0.86-1)/50-1

p^=√0.86(0.14)/49

p^=√0.1204/49

p^=0.049


=0.7+1.96*0.049

=0.75+0.09604

=0.79


P= no. of favourable responses/ Sample size

= 43 / 50

= 0.86

Interpretation

H0 is rejected

H1 is accepted

Therefore More than 70% of the investers agree that they get 50 to 100 percent return on IPO.

5. FINDINGS SUGGESTIONS AND CONCLUSIONS

5.1 Findings

I have completed the project on IPO study through questionnaire methodology of

select 50 investors of INDIA INFOLINE comprising small, medium and big investors. From

the project study I have arrived at the following findings:

1. 90% investors are well aware of IPOs.

2. 82% of the investors invest in IPOs.

3. 44% of the investors, invest around 10,000 to 50,000 and 38% of investors, invest

around 50,000 to 5, 00,000.

4. 46% of investors expect about 50% to 100% and 34% investors expect the returns up

to 10% - 50%.

5. 36% of the investors feel the IPOs of the 2010-11mraket were average and 24 % of

investors feel both good and bad.

6. 32% of the investors feel that its better to pick the same stock on the listing. 28%

investors feel they would partly invest in IPO and pick the stock on listing.

7. 36% of the investors say they go by sector performance and 32% of them say they go

by the performance of the existing companies.

8. 30% of investor say the source of information is print media, 16% say electronic

media, 28% go with expert opinion and 26% agree to their friends advice.

9. 48% invetors are trading for 2 years to 5 years.

10. 42% investors advice the new investors to go by only sector performance.

11. 52% investors does not go by the grading before investing.

12. 34% of investors say they have gained upto 10% and 10% to 15%.

13. 44% of the investors feel the proceedure for applying for an IPO is lengthy, 32% feel

easy and simple.

14. Investors say yes and no at 30% about the awareness of the procedures before

apllying for IPOs.

15. 80% of the investors are aware of the documents needed to apply for the IPOs. 20%

investors are not aware of the documents needed to apply for the IPO.

16. 30% of the investors say the delay in crediting allotted shares to the demat account.

17. 28% say no clarity in allotment and 26% say they never faced difficuties.

18. 32% investors read about the diclaimer clause and 68% investors does not read the

disclaimer clause before investing.

5.2 Suggestions

1. INDIA INFOLINEstock broking ltd must guide their investors and create confidence in them about investing in IPO’s.

2. INDIA INFOLINEStock Broking ltd must contact their investors as and when good IPO’s come.

3. INDIA INFOLINEStock Broking ltd must identify the difficulties faced by their investors about investing in IPO’s.

4. INDIA INFOLINEstock Broking ltd must conduct meetings of their investors as and when new IPO’s come.

5. INDIA INFOLINEstock Broking ltd should ask their clients to get more investors for them.

5.3 ConclusionsFrom the study and the research analysis made it can be convincingly concluded that:

1. IPO is one of the cheapest sources of financing.

2. All kinds of investors including small, medium and big go in for IPOs

3. The performance of the IPOs of 2010-11has not been very good due to economic

recessions slump in the global market and expected revival in the IT and other sectors

not forthcoming

4. timing of the IPOs plays a very vital role in the success of the IPOs

5. Price band of the IPOs is very important and IPOs with mid cap price band have by

and large faired well during 2010-11

6. Extensive use of electronic media and very high absorption in IT in IPOs has made

the entire process of IPO marketing quite convenient and smooth.

7. Sector performance as foreseen by the investors also plays and major decisive role in

performance of the IPOs.

8. finally marketing of IPOs has been underlined force behind the success or failure of

the IPOs

BIBLIOGRAPHY

Websites: www.nseindia.com

www.bseindia.com

www.moneycontrol.com

Books Referred:

Company Manuals

Experts Guidance by:

Sharad. K. kalagi

General Manager

Shri I.M.Ramesh

Asst. General Manager

http://www.moneycontrol.com/

http://www.bseindia.com/

http://www.nseindia.com/

ipo india infoline.doc

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