issue of shares when, why & how sharmila jeetesh, rashmi, shreeja, deepika)

8/8/2019 Issue of Shares When, Why & How Sharmila Jeetesh, Rashmi, Shreeja, Deepika)

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Issue of shares- when? Why?and how?

ByN.Sreeja

C.DeepikaJeethesh

A.G.Sharmila

Rashmi


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TOPICS COVERED

What is an IPO

Who can issue IPO

Why IPOPlacement of IPO

Example of SKS microfinance

Key terms


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WHAT IS AN IPO?

IPO stands for Initial Public Offering and

means the new offer of shares from a

company which was previously unlisted.

This is done by offering those shares to the

public, which were held by the promoters or

the private investors prior to the IPO.


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WHO CAN ISSUE IPO?

Private companies

Public companies


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WHYIPO?

To promote a new company

To expand an existing company

To diversify the productionTo meet the regular working capital

requirements

To capitalize the reserves


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PLACEMENT OF IPO

Initial issues are floated

1. Public issue

2. Right issue3. Private placement

4. Preferential allotment


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PARTIES INVOLVED IN IPO

Lead managers.

Registrar to the issue.

Underwriter to the issue.Financial institutions

Advertising agencies

Government agencies


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LEAD MANAGER

Appointed by the company to manage public issue program

He should posses valid SEBI registration

Main duties:

Drafting of prospectus.

Preparing budget of expenses related to issue.

Suggesting appropriate timings of the issue.

Assisting in marketing of the public issue. Advising the company in appointing registrars ,underwriter ,

brokers, advertising agency , bankers etc.


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The banking division of financial institutions,

subsidiary of commercial banks, foreign

banks, private sector bank and private

agencies are available to act as leadmanager.

Some of them are SBI capital market Limited,Bank of Baroda,canara bank,ICICI securities

etc.


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ROLE OF LEAD MANAGER IN

THE PRE & POST ISSUE

Pre issue Post issue

Due diligence Management of escrow a/c

Design of prospectus , memo etc. Co-ordinate non-institutional

allocation

Ensure the formality. Intimation of allocation

Appointment with intermediatries Dispatch of refund to bidders

Marketing strategy Look at the functioning of agencies


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REGISTRAR

Finalizes the list of eligible allotees after deleting the

invalid application.

Action for crediting the shares to demat account ofapplicants.

Dispatch of refund order to those applicable.

Receive the share application from various

collection centre.

Arrange for dispatching of shares certificate.


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BANKERS TO THE ISSUE

Ensure that funds are collected and

transferred to escrow accounts.

Estimate of collection and advising the

issuer about the closer of the issue.


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UNDERWRITERS

Underwriting means they will subscribe to the

balance share if all share are not picked up at IPO.

Can be a banker ,broker or financial institutions.

Done for a commission.

Aspect considered before appointing:

Reputation.

Network of investor Clientele

Past performance

Experience.


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KEYTERMS

FPO

Book runner

Safety netGreen shoe option

Syndicate member

Hard writingSoft writing

QIBs


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EXAMPLE OF SKS

MICROFINANCE


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issue of shares when, why & how sharmila jeetesh, rashmi, shreeja, deepika)

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