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*Investment BankingNon-Fund based

Merchant Banking Services for: Management of Public offers of equity/debt instruments Open offers under takeover code. Buy-back / Delisting offers Advisory and Transaction services in:Project FinancingSyndicated Loans / Structured finance productsVenture capital / private equityPrivate placement of debt / equityBusiness advisory / financial restructuringCorporate Re-organisation such as M & A demergers, hire off asset sell off Govt. disinvestments & Privatisation

Fund based

Underwriting Market making Investments in Primary markets

*Regulatory & Statutory AuthoritiesDepartment of company affairsSEBIDepartment of economic affairsReserve Bank of IndiaStock Exchange BoardsCentral board of Direct TaxesCentral board of Excise & CustomsSFIOEnforcements Directorate

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SEBI Market regulator

SEBI was incorporated in April 1988 with an objective to act as a regulatory for capital markets.

Functions:

a. Investor protection : to ensure steady flow of savings in the capital mkts.

b. Ensuring fair practices by issuers of securities.

c. Promotion of efficient services by brokers, merchant bankers and other intermediaries.

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SEBI Guidelines

Influences raising of capital

Issuer status

Initial Public Offering : Treasury issue / offer for sale

Composite issues.

Deployment of issue proceeds.

Lock in period Preferential offers brought under purview

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Equity capital to be greater than Rs. 10 crores for listing on BSE / NSE and Rs. 5 crores for other exchanges & conformity with other listing guidelines

At least 25% to be offered to public by way of a prospectus to be in conformity with listing guidelines.

Book building / Private placement allowed.

Debt : Equity :Normally 2:1, relaxed in capital intensive projects.

Offer for Sale : IPO / Secondary Public Offer

Disclosures in offer document.

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Norms for issuance of capital

Public issue by Unlisted Companies:

No unlisted company shall make a public issue unless the company has :

IPOs of issue size up to 5 times the pre-issue net worth can be allowed only if the company has a track record of distributable profits in terms of section 205 of companies act, for at least three out of the immediately preceding five years.For issue size greater than 5 times net worth book building mandatory

A pre issue Net worth of at least Rupees One crore in at least three out of the preceding five years with the minimum requirement to be met for the immediately preceding two years.

*An unlisted company which does not satisfy the above conditions can make a public issue provided a Public Financial Institution or a Scheduled commercial bank : Has appraised the project and has financed at least 10% of the cost of the project by way of Equity / Debt.Book building made mandatory in respect of IPOs without track record including the stipulation that 60% to be alloted to QIBsThe appraising Bank / Institution brings in the money at least one day before the opening of the public issue.Minimum level of public offering has to be at least 10% of post issue capital.

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PRICING OF SECURITIES BY COMPANIES

Companies eligible to make Public Issues can freely price their securities.

Differential Pricing : Allotments made to firm category must be at a price higher than that made to open public category.

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Public Issue By Listed Companies

A Listed Company shall be eligible to make a public issue if as a result of the proposed issue Net worth of the Company becomes more than Five times the Net worth prior to the Issue. And also the Company satisfies the conditions as applicable to an Unlisted Company pertaining to track record of distributable dividends as per sec 205 of companies act.

Free pricing to be determined by lead managers.

The above guidelines are not applicable to :

Banks / NBFCs

Infrastructure Projects

*Methodologies for making issues100% Retail (Fixed price) IssueBook Built (Price discovery) IssueFloor price fixationCap not more than 20% of floor priceBook running lead managerUpdation of bids on real time basis during biding periodRed Herring prospectusAllocation / reservation for institutional / QIBs

* Guidelines for Debt Securities Creation of a Debenture redemption reserve mandatory in the event maturity in excess of 18 months.DRR aggregating to 50% of the issue price to be created before redemption commences.

Creation of charge within 6 months

Conversion of Instruments :

- Conversion at the option of the investor if conversion terms not specified at issuance time. - FCDs with conversion periods greater than 36 months shall give put and call options to the investors. - If conversion is between 18 and 36 months conversion at the option of the investor.

*Other regulationsCredit Rating of Debt Instruments mandatory irrespective of maturity or conversion terms.For debt securities greater than Rs 100 crs credit rating from two agencies mandatory.

All credit ratings obtained in the last 3 years shall be disclosed in the offer document.

Outstanding warrants or financial Instruments would get the same rights / benefits .

All partly paid up shares shall be made fully paid up / forfeited before a public issue.Interest rates & terms of conversion freely determined

*Pre Issue ObligationsLead Merchant Banker shall exercise due-diligenceInter - se allocation of responsibilitiesAppointment of intermediariesUnderwriters ability to discharge obligationsOffer document to be made publicAppointment of compliance officerPress advertisementsAgreements with depositoriesAdditional disclosures regarding Khoka buy back,security etc

*Promoters contribution &Lock in arrangementsIn a public issue by an unlisted company the promoters contribution shall be at least 20% of the post issue capital.In a public issue by a listed company the promoters shall participate either to the extent of 20% of the proposed issue or ensure post-issue holding of 20%.In case of any issue to the public promoters equity upto 20% will be locked in for a period of 3 years from the date of the public issue or the date of commencement of commercial production which ever is later..In case of public issue by an unlisted company promoters holding in excess of 20% will be locked in for 1 year.Locked in securities can only be pledged with banks & FIs as collateral's for loans given to the company.

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DISCLOSURES IN OFFER DOCUMENT

Minimum Subscription Clause

Issue Schedule

Intermediaries and Auditors

Credit Rating

Underwriting of the issue

Capital Structure of the Company

Details of major shareholders

Terms of Issue

Utilisation of Issue proceeds

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Project cost & Means of Financing

Company,Management,project details

Plant,Machinery,Process & Technology

Collaborations,Performance guarantees etc.

Products & Services,Capacity & Future prospects

Stock market data,Past prices,Bonuses etc.

Financials of group companies

Basis of issue pricing

Past Financial data

*Foreign Direct InvestmentsInward Investments :FIPB & Automatic approval routesExemptions for SEZsRBI delegated to sanction under automatic fresh ECBs up to$400 million with interest cap of : Libor + for normal projects Libor + for infrastructure Repayment beyond 8 years. RBI delegated authority to approve pre-payments if met from offshore issuance of equity.Outward FDI up to 3 times the network under automatic approval route.Inward FDI in secondary markets and real estate regulated.

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Structured Financial Products

R u p e e c o n v e r t i b i l i t y

C o s t d r i v e n e c o n o m yE c o n o m i e s o f s c a l e

I n t e r e s t r a t e v o l a t i l i t y

B u y - b a c k o p t i onR i s k A s s i g n e m e n t

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Transaction costs and phasing out of intermediaries

Partial convertibility of currency thereby opening accesses to offshore financing

Tax asymmetries that can produce tax savings for the issuer, investors or both

Opportunities to reduce or reallocate risk

. Volatile inflation indexed interest rates

Better understanding of risk-return characteristics of existing

Investor wish list.

Make debt attractive by offering sweeteners.

*Structured financing Instruments

* Equity shares with differential voting rights (limited to 25% of issued capital)

* External commercial borrowings & Depository receipts

Non Voting shares.

Multiple option debentures / SPNs

Exchangeables

Deep discount bonds.

Floating rate notes

Rupee enhanced structured bonds

Zero coupon bonds

NCD with tradable warrant.

* Derivative linked bonds.

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Offshore financing

Rupee convertibility on current account

Low cost borrowings

Large avenues of funds with low flotation cost .

Elimination of licensing has resulted in large size projects which need low cost means of financing. to ensure project viability

In FCCBs / GDRs companys issue rupe