2.  Stocks available for the first time are offered
through New Issue Market.
 The issuer may be a new company or an
existing company.
 These issues may be of new type or the
security used in the past.

3.  Managers to the issue
 Registrar to the issue
 Underwriters
 Bankers to the issue
 Advertising agents
 Financial institutions
 Government and Statutory agencies

4.  Lead managers are appointed by the company to
manage the public issue programmes.
 Their main duties are
a) Drafting of prospectus
b) Preparing the budget of expenses related to the
issue
c) Suggesting the appropriate timings of the public
issue
d) Assisting in marketing the public issue successfully
e) Advising the company in the appointment of
registrars to the issue, underwriter, bankers to the
issue, advertising agents
f) Directing the various agencies involved in the
public issue.

5.  After the appointment of the lead managers to the
issue, in consultation with them, the registrar to
the issue is appointed.
 Quotations containing the details of the various
functions they would be performing and charges
for them are called for selection.
 Among them the most suitable one is selected.
 It is always ensured that the registrar to the issue
has the necessary infrastructure like computer,
internet and telephone

6.  Underwriting is a contract by means of which
a person gives an assurance to the issuer to
the effect that the former would subscribe to
the securities offered in the event of non
subscription by the person to whom they
were offered.
 The person who assures is called an
underwriter.

7.  Underwriters are divided into 2
a) Financial institutions and Banks
b) Brokers and approved investment
companies.
 The underwriters do not buy or sell
securities.
 They stand as back-up supporters and
underwriting is done for a commission

8.  They have the responsibility of collecting the
application money along with the application
form.
 The bankers to the issue generally charge
commission besides the brokerage, if any.
 Depending upon the size of the public issue
more than one banker to the issue is
appointed.

9.  Advertising plays a key role in promoting the
public issue. Hence, the past track record of the
advertising agency is studied carefully.
 Tentative programmes of each advertising agency
along with the estimated cost are called for.
 After comparing the effectiveness and cost of each
programme with the other, a suitable advertising
agency is selected in consultation with the lead
managers to the issue.

10.  Financial institutions generally underwrite the
issue and lend term loans to the companies.
 Hence, normally they go through the draft of
prospectus, study the proposed programme for
public issue and approve them.
 IDBI, IFCI&ICICI, LIC, GIC and UTI are the some of
the financial institutions that underwrite and give
financial assistance

11.  SEBI
 Registrar of companies
 RBI
 Industrial licensing authorities
 Pollution control authorities.

12.  Offer through prospectus
 Bought out deals (Offer for sale)
 Private Placement
 Rights Issue
 Book building

13.  Prospectus is a document gives details
regarding the company and invites offers for
subscription or purchase of any shares or
debentures from the public.

14.  Definitions & Abbreviations
 Risk Factors & Proposals to address the risks thereof
 Highlights
 PART I
 I. General information
 II. Capital structure of the company
 III. Terms of the present issue
 IV. Particulars of the issue
 V. Description of industry and business
 VI. Company, management and project
 VII. Management discussion and analysis of the financial
condition and results of the operations as reflected in the
financial statements.

15.  VIII. Financial of group companies
 IX. Basis for issue price
 X. Outstanding litigations or defaults
 XI. Risk factors and Proposals to address the risks on
the same, if any
 PART II
 I. General information
 II. Financial information
 III. Statutory and other information
 PART III
 Declaration

16.  In bought out deal, an existing company off-
loads a part of the promoters capital to a
wholesaler instead of making a public issue.
 The sponsors hold on to these shares for a
period and at an appropriate date they offer
the same to the public.
 The hold on period may be as low as 70 days
or more than a year

17.  In this method the issue is placed with a small
number of financial institutions, corporate bodies
and high networth individuals.
 The special feature of the private placement is that
there is no need for underwriting arrangements
since the placement itself amounts to underwriting.
 Through private placement equity shares,
preference shares, cumulative convertible
preference shares, debentures and bonds are sold.

18.  If a public company wants to increase its
subscribed capital by allotment of further shares
after two years from the date of its formation or
one year from the date of its first allotment,
whichever is earlier, should offer share at first to
the existing shareholders in proportion to the
shares held by them at the time of offer.
 Shares of this type is called as rights shares.

19.  Book building is a process of price discovery.
The issuer discloses a price band or floor
price before opening of the issue of the
securities offered.
 On the basis of the demands received at
various price levels within the price band
specified by the issuer, Book Running Lead
Manager (BRLM) in close consultation with the
issuer arrives at a price at which the security
offered by the issuer, can be issued.

20.  According to SEBI, the allocation of shares is
done under proportionate allotment method.
 The applications will be categorized
according to the number of shares applied
for.
 Then allocation is done by proportionate
basis.

21.  ASBA means “Application Supported by Blocked
Amount”.
 ASBA is an application containing an
authorization to block the application money in
the bank account, for subscribing to an issue.
 If an investor is applying through ASBA, his
application money shall be debited from the bank
account only if his/her application is selected for
allotment after the basis of allotment is finalized,
or the issue is withdrawn/failed