Issue and Listing of Shares
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Transcript of Issue and Listing of Shares
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7/31/2019 Issue and Listing of Shares
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B Y : M E H E R A S A M E E R A
M B L A 0 1 5
1 S T Y E A R , 2 N D S E M
Issue and Listing of Shares
SUN TV Network
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IssueListed Security
The process of offering securities as an attempt toraise funds. Companies may issue bonds or shares toinvestors as a method of financing the business.
ORA series of stocks or bonds that have been offered tothe public. A bond or stock issue relates to the set ofinstruments that were released under one offering.
A financial instrument that is traded through a stockexchange
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Why Issue & Listing?
Provide liquidity to shares
Mobilize savings for economic development
Protect interest of investors by ensuring full
disclosures
The listing of companies in the capital market impliesthe admission of the shares of that company to
dealings on a recognised stock exchange.
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Submissionof Letter of
Application
Allotment ofSecurities
TradingPermission
Requirementof 1 per cent
SecurityPayment ofListing Fees
Compliancewith ListingAgreement
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BENEFITS AND DRAWBACKS OF LISTINGYOUR COMPANY
Benefits Creating a market for the company's shares;
Enhancing the status and financial standing of the company;
Increasing public awareness and public interest in the
company and its products; Providing the company with an opportunity to implement
share option schemes for their employees;
Accessing to additional fund raising in the future by means ofnew issues of shares or other securities;
Facilitating acquisition opportunities by use of the company'sshares; and
Offering existing shareholders a ready means of realising theirinvestments.
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Drawbacks
Increasing accountability to public shareholders
Need to maintain dividend and profit growth trends
Becoming more vulnerable to an unwelcome takeover
Need to observe and adhere strictly to the rules andregulations by governing bodies
Increasing costs in complying with higher level of reportingrequirements
Relinquishing some control of the company following thepublic offering
Suffering a loss of privacy as a result of media interest
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SEBI ICDR Regulations
Eligibility Norms - 26
No unlisted company shall make public issue or offer for saleof equity or convertible securities
Issuer should have net tangible assets of Rs. 3 Crores in each of
preceding three years
50% in monitory assets
If more than 50% - commitment for deployment
Track record of three years of last five years about
distributable profits Pre-issue net worth of Rs. One crores during last three years
Proposed and previous issue should not be more 5 times of networth
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If the company changed the name, atleast 50% of revenue fromthe activity of with changed name
Further Public Issue by Listed Companies No eligibility norms for public issue size less than 5 times of
net worth
Regulations applicable to unlisted companies will apply
Other Conditions Cap on price band shall be 120% of floor price
Means of finance should be verifiable sources
No partly paidup shares before public offering
Conditions for unlisted companies Prospective allotters should not be less than 1000
No outstanding financial instruments
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IPO grading Unlisted company grading from atlest one credit rating agency
Disclosure of rating in the prospectus
Expenses incurred for grading are to be borne by the unlistedcompany
Pricing -28, 29, 30 Free pricing of equity shares or convertible securities
Cap on price band shall be 120% of floor price
Price Band and final offer band shall contain only one price
Capital market Access no bar
The pricing for rights issue and public issue may be different
Discount may be allowed to the retail investors
Anchor investor price should not be less than offer price of issue
Agreement with depositories
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IPO
In financial terms, IPO or initial public offering is thefirst issuance of a company's shares to the generalpublic. It is called as primary market.
These shares are allowed to be transacted in thestock market where they can be bought and sold. It iscalled secondary market.
An IPO is defined as an exercise when an unlisted
company makes either a fresh issue of securities oran offer for sale of its existing securities or both forthe first time to the public.
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Need Of IPO
Organisation offer IPO is to raise capital for their organisation.
Process of IPOStep:1(Assigning Underwriter)
Step: 2 (Performing Legal procedures)
Step: 3(Grading)
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Clause 49
Clause 49 Corporate governance Board Structure
Independent directors disqualifications and number
Board meetings and procedures
Audit Committee
Minimum 3 members 2/3 independent members
Chairman should present report to AGM
Quorum 2 or 1/3 whichever is higher
Periodic reviews of performance of directors
Code of conduct
Risk Management
CEO and CFA Certification
Shareholders Grievance Committee
Remuneration Committee
Quarterly compliance Report Whistleblowers policy
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Intermediaries
Merchant Banker
Bankers to the Issue
Transfer Agent
RTA
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SUN TV
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Market Price Data
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Performance in comparison with BSE SENSEX
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Shareholding pattern as on 31.03.2011
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S O U R C E : A V N SIR S P P T
A N D
I N T E R N E T
THANK YOU