1. A ROADMAP TO INITIAL PUBLIC OFFER

2. Corporate Professionals: Privileged Document, for discussion purpose only
AGENDA
1. Eligibility Criteria for IPO & Listing …………………………………. 3-7
2. Corporate Governance & Approvals ……………….……………… 8-14
3. Key Decisions ………………………………………………………….. 15-23
4. Major Activities & Timeline ………………………………………… 24-28
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3. Corporate Professionals: Privileged Document, for discussion purpose only
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4. Corporate Professionals: Privileged Document, for discussion purpose only
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5. Corporate Professionals: Privileged Document, for discussion purpose only
Scenario 1 Scenario 2 Scenario 3
•Applicable in case the issuer company •Applicable in case the issuer company •Issue made under Rule 19(2)(b) of the
meets the eligibility criteria of does not meets the eligibility criteria of Securities Contract (Regulation) Rules,
distributable profits distributable profits 1957
•Minimum dilution to be 25% of the post •Minimum dilution to be 25% of the post •Minimum issue size INR 1000 mn and
issue capital issue capital minimum 2mn securities offered to
public
•Dilution to be between 10% to 25% of
the post issue capital
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6. Corporate Professionals: Privileged Document, for discussion purpose only
Classification of Companies • A large cap company is a company with a minimum issue size of Rs. 10 crore and market
capitalization of not less than Rs. 25 crore.
• A small cap company is a company other than a large cap company
Large Cap Companies • The minimum post-issue paid-up capital of the applicant company (hereinafter referred to as "the
Company") shall be Rs. 3 crore; and
• The minimum issue size shall be Rs. 10 crore; and
• The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization
shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue
price).
Small Cap Companies • The minimum post-issue paid-up capital of the Company shall be Rs. 3 crore; and
• The minimum issue size shall be Rs. 3 crore; and
• The minimum market capitalization of the Company shall be Rs. 5 crore (market capitalization
shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue
price); and The minimum income/turnover of the Company shall be Rs. 3 crore in each of the
preceding three 12-months period; and
• The minimum number of public shareholders after the issue shall be 1000.
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7. Corporate Professionals: Privileged Document, for discussion purpose only
Classification of Companies • No Concept for Small Cap & Large Cap Company
Eligibility for Listing at NSE • The minimum post-issue paid-up capital of the applicant company shall be Rs. 10 crore; and
• Market Capitalization of Rs. 25 Crore (min.). Provided that if market capitalization (at issue price)
is Rs. 100 crores or more, paid up capital can be Rs. 5 Crores (min.)
Track Record • Three year track records of either of following:
• Applicant Company seeking listing,
• Promoters, Promoting Company (incorporated in or outside /India), or
• Partnership firm and subsequently converted into Company and approaches for the listing.
• The applicant Company shall submit three year annual report and provide a certificate to
exchange in respect of following:
• The Company has not been referred to BIFR,
• Networth not negative,
• Company has not received any winding up petition.
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8. Corporate Professionals: Privileged Document, for discussion purpose only
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9. Corporate Professionals: Privileged Document, for discussion purpose only
Corporate Governance Clause 49 of the Listing Agreement
Board Composition Board to have optimum number of executive and non executive directors with at least 50% being
non-executive. If the chairman, has executive powers then 50% of Board comprises of Independent
directors. While if Chairman has non-executive powers then 1/3 of the Board comprises of
Independent directors
Audit Committee  Mandatory constitution of Audit Committee with minimum three directors and headed by an
Independent director
 The audit committee should meet at least four times in a year and not more than four months
shall elapse between two meetings
 Key Responsibilities
• Oversight of the company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and credible
• Recommending appointment and remuneration of statutory auditors
• Reviewing annual and quarterly financial statements, management discussion and analysis
and results of operations of the company
• Reviewing the internal audit function
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10. Corporate Professionals: Privileged Document, for discussion purpose only
Corporate Governance Clause 49 of the Listing Agreement
Subsidiary Company • At least one director on the Board of the holding company shall be a director on the Board of a
material non listed Indian subsidiary Company
• Audit committee of the listed holding company shall also review the financial statements, in
particular, the investments by the unlisted subsidiary Company
Report on Corporate • A separate section on Corporate Governance to be included in the Annual Reports with
Governance
disclosures on compliance of mandatory and non-mandatory requirements
• Submission of quarterly compliance report to the stock exchanges
CEO/CFO • CEO/CFO to certify the financial statements and cash flow statements
Investor Committee Shareholder/Investor Grievances Committee to be formed under the chairmanship of a non
executive director to look into the redressing of shareholder and investor complaints like transfer
of shares, non-receipt of balance sheet, non-receipt of declared dividends
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11. Corporate Professionals: Privileged Document, for discussion purpose only
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12. Corporate Professionals: Privileged Document, for discussion purpose only
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13. Corporate Professionals: Privileged Document, for discussion purpose only
Authorities Approvals
Board of Directors • Fresh issue of shares under Section 81(1A) of the Companies Act (including
reservations, green shoe etc.)
• Offer for sale, if applicable;
• Increase in authorised capital, if any
• Amendment in the Articles of Association of the Company
• Constitution of the IPO Committee
• Increase the number of directors to comply with Corporate Governance Norms
• Finalization of Offer Price based on demand
• Approve the basis of allotment as passing of allotment resolution
Shareholders Approval • Fresh issue of shares under Section 81(1A) of the Companies Act (including
reservations, green shoe etc.)
• Offer for sale, if applicable;
• Increase in authorised capital, if any
• Amendment in the Articles of Association of the Company
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14. Corporate Professionals: Privileged Document, for discussion purpose only
Authorities Approvals
SEBI • Filing of the draft offer document (DRHP) with SEBI
• Observations on the offer documents filed with the SEBI
• Modifications and corrections in DRHP & Re-submission
• Final approval from SEBI post the release of observations and prior to filing the Red Herring
Prospectus with ROC
FIPB/ RBI • Key Approvals required from FIPB or any other industry regulator
• Approval may be required for the participation by FII and NRI in the Issue
• Post the allotment filing of the report with RBI for final allotment/subscription by FIIs and NRIs
Stock Exchanges • In-Principle Approval for putting names in DRHP
• Post Issue Decisions and Actions along with the Company
• Finalization of the basis of allotment with the Designated Stock Exchanges
• Approval for listing and trading from the Stock Exchange
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15. Corporate Professionals: Privileged Document, for discussion purpose only
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16. Corporate Professionals: Privileged Document, for discussion purpose only
Objects and Requirement of • Requirement of funds need to be specifically identified
Funds
• Detailed activity-wise breakup to be provided
• Raising funds for unidentified purposes are restricted
• Firm arrangement for 75% of requirement after excluding issue proceeds to be in place
• Memorandum of Association should allow for proposed use
Offer for Sale in IPO • If there is any plan for Offer for Sale or Sale of existing capital
• This generally to give exist opportunity to PE investor etc.
Selection of Intermediaries Selection of various intermediaries in consultation with the Merchant Banker
Timing for appointments
Pre-IPO Placement & • Whether there is a plan for placement of certain portion of shares as Pre-IPO Placement
Anchor Investor
• Whether there will be some Anchor Investor
Auditors • There are several certifications required from Auditors as per of the offer Documents
• In case of a listed Company the role of Auditors increases manifold as the audit works need to
be on quarterly basis (Limited Review Report)
• So if the existing auditors would be capable to mange the things
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17. Corporate Professionals: Privileged Document, for discussion purpose only
COMPANY BASED INFORMATION ISSUE RELATED INFORMATION
• Industry Overview • Objects of the issue
• Business Overview & Strategies • Basis of issue price
• Risk factors • Terms of issue
• Promoter and Group company disclosures • Issue process
• Capital Structure • IPO Grading
• Management & Managerial Persons
FINANCIAL INFORMATION OTHER INFORMATION
• Financial performance statement for last five years • Government Approvals
(recast as per SEBI (ICDR) Regulations, 2009 • Legal & Litigations
• Management discussion and analysis of the • Related Party Transactions
Financial Statements • Legal and Secretarial matters
• Statement of tax benefits
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18. Corporate Professionals: Privileged Document, for discussion purpose only
Attractive Issue
Price
Adopting Credible
Right Timing
Pricing Range IPO
Developing Quality Identifying
Retail Demands Potential Investors
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19. Corporate Professionals: Privileged Document, for discussion purpose only
Shares Eligible for Offer • Offer for sale can be done by any existing shareholder, including the Promoters, through
for Sale an offer document
• Post offer Promoters’ shareholding to not decline below 20% of the post issue capital
• Only pre-issue shares held for a period of at-least 1 year at the time of filing of the DRHP
with SEBI can be offered for sale
• Exemption available for shares acquired during the last 1 year in lieu of invested capital
which had been in existence for a period of more than 1 year prior to the restructuring
through a scheme of amalgamation or merger approved by the High Court
• In case equity shares, received on conversion of fully paid compulsorily convertible
securities, including depository receipts, the holding period of such convertible securities
and that of resultant equity shares together shall be considered for the purpose of
calculation of the eligibility period
Other Major • Selling shareholders to authorize the sale through a corporate resolution and share in the
Considerations
Issue expenses
• Selling shareholders to be party to all offer related agreements/ documents and sign the
offer documents
• Selling shareholder to transfer the shares offered to an escrow demat account
• Authorize Registrar to transfer these shares to public issue investors on receipt of
consideration in public issue account
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20. Corporate Professionals: Privileged Document, for discussion purpose only
Anchor Investors • Out of the portion available for allocation to QIBs, up to 30% may be allocated to Anchor
Investors
• The minimum application size shall be Rs.10 crore
• One-third of the Anchor Investor portion shall be reserved for domestic mutual funds
• The bidding for Anchor Investors shall open one day before the issue opens and shall be
completed on the same day
• Allocation shall be on a discretionary basis subject to minimum number of 2 investors for
allocation of upto Rs.250 crore and 5 investors for allocation of more than Rs.250 crore
• The number of shares allocated to Anchor Investors and the price at which the allocation is
made, shall be made available in public domain before opening of the issue
• Anchor Investors shall pay a margin of at least 25% on application with the balance to be
paid within two days of the date of closure of the issue
• Lock-in of 30 days on the shares allotted to the Anchor Investors
• No person related to the book running lead managers/ promoters/promoter group can
apply under Anchor Investor category
• If the price fixed for the public issue through book building process is higher than the
price at which the allocation is made to Anchor Investors, the additional amount shall be
paid by the Anchor Investors
• If the price fixed for public issue is lower than the price at which the allocation is made to
Anchor Investors, difference shall not be payable to the Anchor Investors
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21. Corporate Professionals: Privileged Document, for discussion purpose only
Intermediaries Role Timing
Legal Counsels • Participation in due diligence & drafting Immediately upon decision to go ahead with
• Advisory on Indian legal/ regulatory issues the IPO
• Provision of legal opinion
• Participation in due diligence & drafting
• Advisory on Indian legal/ regulatory issues
• Provision of legal opinion
Registrar (RTA) • Co-ordination with the Issuer and Bankers 2-3 weeks prior to filing DRHP with SEBI
regarding
• collections, reconciliation, refunds etc
• Post issue co-ordination, collation and
reconciliation of information
IPO Grading Agency • Issuer is required to appoint one IPO Grader to Around the time of filing DRHP with SEBI
assign an IPO grade
• Disclose the grades obtained, along with the
rationale in the Red Herring Prospectus
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22. Corporate Professionals: Privileged Document, for discussion purpose only
Intermediaries Role Timing
Advertising/PR agency • Assist the company and BRLM on formulation 2-3 weeks prior to filing DRHP with SEBI
and execution of the Media and PR Strategy
• Organizing the Road Shows
• Ensure adequate coverage of IPO & positive
news flow
Bankers to the Issue • Collection of funds raised in the IPO. 1-2 weeks prior to filing RHP with SEBI
• Issue provisional and final certificates to aid in
the post issue process
• Issue of Refund cheques
Printers • Bulk printing of the Red herring Prospectus and Prior to filing DRHP with SEBI
final Prospectus
• Printing of share application forms
• Ensure timely dispatch & distribution of
stationery
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23. Corporate Professionals: Privileged Document, for discussion purpose only
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24. Corporate Professionals: Privileged Document, for discussion purpose only
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25. Corporate Professionals: Privileged Document, for discussion purpose only
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26. Corporate Professionals: Privileged Document, for discussion purpose only
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27. Corporate Professionals: Privileged Document, for discussion purpose only
Listing and trading
Pre-IPO Structuring
Final Closing and
Phase Allotment
Kick Off Meeting Preparatory
Phase of
Issue
RoC filing of final
Due Diligence and Prospectus
Documentation
Marketing Phase of Issue
Roadshows &
SEBI Approval & Book building and
Filing with SEBI and SE Pre-Marketing Price Band
RoC Filing Pricing
Discovery
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28. Corporate Professionals: Privileged Document, for discussion purpose only
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29. Corporate Professionals: Privileged Document, for discussion purpose only
Thanking you…
Corporate Professionals Capital Pvt. Ltd.
D 28, South Extn. Part 1, New Delhi 110049
Tel: +91.11.40622200 | Fax: +91.11.40622201
Visit us at: www.corporateprofessionals.com
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For any query contact: Manoj Kumar
D: +91.11.40622228|M:+91.9910688433|E:manoj@indiacp.com
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