PPT on IPO

1. INITIAL PUBLIC OFFERING (IPO)
Richa Shah
Neha Shukla
Himani Sheth
Darshan Joshi

2. TABLE OF CONTENTS
A. Introduction
B. Eligibility Criteria
C. Process
 Parties Involved
 Structure
 Pricing
 Marketing Plan
D. Case Study
E. Conclusion
F. Bibliography

3. INTRODUCTION AND MEANING

4.  An initial public offering (IPO) or stock market launch is a type of public
offering where shares of stock in a company are sold to the general public
for the first time.
 This is done by offering those shares to the public, which were held by the
promoters or the private investors.
 This is why doing an IPO is also referred to as "going public."
 IPO’s are often issued by smaller, younger companies seeking capital to
expand, but can also be done by large privately-owned companies looking
to become publicly traded.

5. PROCESS OF GOING PUBLIC

6. IPO PROCESS
Decision to
Go for IPO
Appointment
of BRLM and
Legal Counsel
Due Diligence
Drafting and
Draft Red
Herring
Filing with
SEBI & Stock
Exchanges
Funds
Transferred to
Issuer
Listing
ROC Filing &
Final
Prospectus
Pricing &
Allocation
Book Building
Pre-
Marketing
SEBI
Clearance &
ROC Filing
Road
shows

7. INTERMEDIARY STRUCTURE – PARTIES INVOLVED
Book Running Lead
Managers (BRLM)
Book Runners
Legal Counsel
(Underwriters)
Broker Or
Syndicate
Advertising
Agency
PrintersEscrow BankersRegistrars
IPO Grading
Agency
Legal Counsels
Issuer Company Self Certified
Syndicate Banks
(SCSB)
Auditors

8. ELIGIBILITY CRITERIA

9. PRIMARY CRITERIA FOR IPO
a) Net tangible assets of at
least Rs. 3 crore in each of
the preceding three full
years
b) Distributable profits for at
least three out of the
immediately preceding five
years
c) Net worth of at least Rs. 1
crore in each of the
preceding three full years
d) The issue size should not
exceed 5 times the pre-
issue net worth
e) If there has been a change
in the company’s name, at
least 50% of the revenue for
preceding one year should
be from the new activity
denoted by the new name
a) Issue shall be through
book building route, with
at least 50% to be
mandatory allotted to the
Qualified Institutional
Buyers (QIBs)
b) The minimum post-issue
face value capital shall
be Rs. 10 crore or there
shall be a compulsory
market-making for at
least 2 years
a) The “project” is appraised
and participated to the extent
of 15% by FIs/Scheduled
Commercial Banks of which
at least 10% comes from the
appraiser(s).
b) The minimum post-issue face
value capital shall be Rs. 10
crore or there shall be a
compulsory market-making
for at least 2 years. In
addition to satisfying the
aforesaid eligibility
norms, the company shall
also satisfy the criteria of
having at least 1000
prospective allottees in its
issue.

10. EXEMPTIONS TO CERTAIN CATEGORY ENTITIES
FROM ELIGIBILITY NORMS
 The following categories of entities are eligible for exemption from entry norms:-
 A banking company including a local area bank set up under the Banking
Regulation Act, 1949
 A corresponding new bank set up under the Banking Companies Act, 1970
 An infrastructure company
 Whose project has been appraised by a Public Financial Institution (PFI)
 Not less than 5% of the project is financed by any of the PFI
 Rights Issue by a listed company

11. PRICING
There are two ways in which the price is determined in the IPO.
FIXED PRICE ISSUES
 Offer Price :- Price at which the securities are offered and would be allotted is made known in
advance to the investors
 Demand :- Demand for the securities offered is known only after the closure of the issue
 Payment:- 100 % advance payment is required to be made by the investors at the time of
application.
 Reservations:- 50 % of the shares offered are reserved for applications below Rs. 1 lakh and the
balance for higher amount applications.
BOOK BUILDING ISSUES
 Offer Price:- A 20% price band is offered by the issuer within which investors are allowed to bid and
the final price is determined by the issuer only after closure of the bidding.
 Demand:- Demand for the securities offered, and at various prices, is available on a real time basis
on the BSE website during the bidding period
 Payment:- 10% advance payment is required to be made by QIB’s along with the application, while
other categories of investors have to pay 100% advance along with the application
 Reservations:- 50% of the shares offered are reserved for QIB’s, 35% of small investors and the
balance of all other investors.

12. MARKETING PLAN FOR IPO
Direct marketing to
shareholders/
stakeholders
Public Relation
Plan
Conference Plan i.e.
Press & Broker
Conferences, Analysis
Media Plan
Stationery
distribution
schedule (Form &
Prospectus
Corporate Ads

13. CASE STUDY – JUST DIAL

14. Introduction – Just Dial
Just Dial has established itself as the undisputed leader of local search in India. It provides comprehensive
and updated B2B and B2C services in India. The service is available on a number of platforms like
phone, internet, mobile internet and SMS. In keeping with the latest technological trends, Just Dial has also
launched its own mobile app for Android, IOS and blackberry.
According to CRISIL research, the business plan for Just Dial is stable and reliable as it is a negative
working capital and a debt-free business model. Also, being the first mover in the niche and by having
superiority in technology, databases and having a business model that is hard to replicate exactly, Just Dial
is likely to remain the market leader in local search for quite some time to come.
Profit and Revenue:-
According to CRISIL research report, Just Dial has maintained an astounding 39% Compounded Annual
Growth Rate (CAGR) over the last four year. Starting off with Rs. 50,000 investment in 1997, Just Dial's
revenue grew from Revenues grew from Rs 85 lakh in March 1997 to Rs 200 crore in March 2011. For
the nine months of FY13, Just Dial recorded revenues of Rs 271.6 crore and net profits of Rs 47
crore.

15. IPO:-
On March 20, 2013, Justdial had obtained approval from Securities and Exchange Board of India
(SEBI) for its proposed Initial public offering (IPO).
Just Dial sold shares worth Rs. 950 crore in the IPO which was the largest sale by a domestic
internet company in India. The IPO opened on 20 May 2013 with existing stakeholders selling nearly 17.5
million shares in a price band of Rs.470-543.
The public issue saw a sale of a 25.02% stake in Just Dial, valuing the company at between Rs.3,290 crore
and Rs.3,800 crore.
Unlike previous public offers, Just Dial adopted a scheme "safety net" for retail investors proposed by the
capital market regulator SEBI in 2012 where the company promoters assure that they will buy back shares
from the retail applicants at the IPO price, if its stock falls sharply during the first six months after listing.
Citigroup Global Markets India Pvt. Ltd. And Morgan Stanley India Co. Pvt. Ltd. Managed the share sale for
Just Dial IPO.
Just Dial is also the biggest success story over the past year in terms of stock market listing. Its initial public
offering received bids for nearly 12 times the shares on sale. Despite stock market volatility and most
investors sitting on the sidelines, the company made an impressive debut in June 2013. From its offer price
of Rs 530 a share, the stock almost doubled to hit a record high of Rs 1,046.05 on October 7, 2013. Though
the stock is off its peak now, the price rise has catapulted the company into the top 200 companies in the BT
500 listing - it's ranked 180.

16. Share Price of Just Dial Stock since the Initial Public Offering
6th June
2013 July 2013
September
2013
November
2013
January
2014
February
2014
March
2014
3rd April
2014
605.1 686 767.05 1128.25 1547.65 1478.55 1630.35 1596.80

17. Just Dial plans post IPO:-
 They believe that investment in brand building campaign will help us further
strengthen our brand and lead to greater search volume from our users and greater
number of paid advertisers.
 Just Dial intends to further develop dedicated category portals to attract SMEs in
particular businesses.
 They are a local search player and there is no competition to talk about. We see
huge opportunity in Online to offline.
 Just Dial plans to expand our operations to other markets as opportunity rise by
licensing the “Just Dial” brand and selling our rights and offering service
arrangements to other parties to conduct these operations as we are doing in US
and Canada.

18. CONCLUSION

19.  Going public raises cash and provides many benefits for a company.
 IPO is one of the forms of raising the capital and which is the effective one
though it has defects.
 Getting in on a hot IPO is very difficult, if not impossible.
 An IPO company is difficult to analyze because there isn't a lot of historical
info.
 Lock-up periods prevent insiders from selling their shares for a certain
period of time. The end of the lockup period can put strong downward
pressure on a stock.
 Road shows and red herrings are marketing events meant to get as much
attention as possible. But one should not get influenced by the hype

20. BIBLIOGRAPHY

21.  Web Based
 Invetopedia - www.invetopedia.com
 Bombay Stock Exchange - www.bseindia.com
 Just Dial - www.justdial.com
 Wikipedia - www.wikipedia.com

22. THANK YOU