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INITIAL PUBLIC

OFFERING/NEW ISSUEMANAGEMENT

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CONTENTS

Classification of Issues Primary Market / New issue market Placement of issue

o Offer through prospectuso Offer for saleo Book buildingo Private placemento How public can apply in IPO?o Red herring prospectus

Intermediaries to issueo Lead Managero Registraro Bankers to issueo Underwriterso Major IPO's in Indiao conclusion

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CLASSIFICATION OF ISSUES

Issues

Public Rights Preferential

Initial PublicOffering (IPO)

Follow on PublicOffering (FPO)

FreshIssue

Offer forSale

FreshIssue

Offer forSale

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PRIMARY MARKETS OR NEW ISSUEMARKET

Primary markets - include all types of securities- being sold for the first time

After being offered in the primary market, itbecomes part of the secondary market

Primary market offers consist of(1) FPOs, new offerings of listed companies that have

sold securities to the public before, and(2) IPOs, where an unlisted company is selling securitiesto the public for the first time

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PRICING OF ISSUE

Prior to 1992, governed by Controller Era of free pricing in 1992; SEBI does not

play any role in price fixation

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PLACEMENT OF THE ISSUE

Initial issues are floated1. Book building2.Offer for sale3. Through prospectus

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BOOK BUILDING

Malegam Committee - introduction of thebook building process Oct 1995

Process of price discovery Originally, companies issuing more than

Rs 100 cr allowed; Later SEBI allowed forissue of any size

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Contd

Nirma Googles IPO offer:

An example of pricing securities - Target rangebetween U.S. $105 and U.S. $135 per share

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OFFER THROUGH PROSPECTUS

What is offer through prospectus?

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OFFER FOR SALE

What is offer for sale?

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How public can apply inIPO?

When a company floats a public issue or IPO,it prints forms forapplication to be filled by the investors.

Public issues are open for a few days only. As per law, any public issue should be kept

open for a minimum of 3days and a maximumof 21 days.

The duly complete application from,accompanied by cash,cheque, DDor stock invest should be deposited before the closing date as per theinstruction on the from.

IPO's by investment companies (closed end funds) usually containunderwriting fees which

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RED HERRING PROSPECTUS

Prospectus without details of eitherprice or number of shares being

offered or the amount of issueA preliminary registration statement

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INTERMEDIATRIES TO ISSUE

Intermediaries to an issue are: Merchant Bankers to the issue or Book Running Lead Managers

(BRLM) Registrars to the issue Bankers to the issue Auditors of the company Underwriters to the issue Solicitors Advertising agencies Financial institutions Government/ statutory agencies

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LEAD MANAGER REGISTRAR

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BANKERS TO THE ISSUE UNDERWRITERS

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Major IPO's in India

Coal India Ltd. Reliance Power Wockhardt Hospital IPO

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CONCLUSION

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