A STUDY ON

“MAKE INDIA PRODUCTS”

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 ABSTRACT

An Initial Public Offering (IPO) is a transformational event for an organization as it forever

changes how a company goes about doing business. The Indian IPO has seen its fair share of ups and downs.
Thanks to the regulatory changes and compliances, the companies have to undergo the maze of interpretation,
application and implementation with awareness and updated knowledge incessantly. Thus, the purpose of this
study is to understand the procedure for listing of IPO in India and the hurdles that the Indian Corporates face as
they gear up to pull up a successful IPO. It is also to be noted that these hurdles, procedural or otherwise help to
trace the trends of IPO in the Indian primary market. The study covers the issue trends of IPO, their listing on the
Main Boards of National Stock Exchange of India Limited and Bombay Stock Exchange Limited and also look
into areas that cause hurdles in the flow of issue of securities and their listing. The study also provides the major
factors affecting the issuance of shares through IPO such as volatility of market, global meltdown, merchant
bankers, amendments in the statues and government stability.

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 INDEX

CONTENTS PAGE:NO
CHAPTERS

INTRODUCTION
1

 NEED & IMPORTANCE OF THE STUDY

 OBJECTIVES OF THE STUDY
 SCOPE OF THE STUDY
 METHODOLOGY OF THE STUDY
 LIMITATIONS OF THE STUDY

REVIEW OF LITERATURE
2

3 COMPANY PROFILE

DATA ANALYSIS &INTERPREATION

4

5 FINDINGS, CONCLUSIONS SUGGESTIONS

BIBLIOGRAPHY

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 CHAPTER-1

INTRODUCTION

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 INTRODUCTION
Going public is a monumental decision for any company. It is the process of offering securities
generally common stock of a privately owned company for sale to the general public. The first time these
securities are offered is referred to as an initial public offering (IPO). A public company has access to more, and
often deeper, sources of capital than a private company.

Corporates may raise capital in the primary market by way of an initial public offer that can be made through the
fixed price method, book building method or a combination of both for which companies have to go through
various rules and regulations which are governed by Securities and Exchange Board of India (SEBI). SEBI is a
governing body of securities market in India which lays down rules to protect the interest of investors and assist
the development of securities market in India.ICDR regulations of SEBI, 2009 list down rules for IPO. An issuer
is required to go through these regulations before listing for IPO. ICDR regulation lists following information in

20 regulations: provisions and pricing for public issue, eligibility criteria, contribution of promoters, minimum
offer that can be used, offer document, reservation and general obligations of issuers with respect to public. In a
notification

dated October 27, 2015 SEBI cuts IPO paperwork by notifying a five-sheet abridged prospectus including the
application form shall not exceed 5 sheets (printed both sides) that companies need to file for public offers to
make it easier for investors to understand key points and to make an informed decision. This shall be applicable
from 1st day of December, 2015.

The IPO Scam in the year 2005-2006 made us aware of the abuse and misuse of the IPO allotment process. The
buying and sharing process in the shares allotted through IPOs to nearly 21 companies in the year 2003, 2004 and
2005. It involved manipulation of the initial public offers (IPOs) by financiers and market players by using
fictitious or benaami DEMAT Accounts. In the year 2005, the IPO scam came to light when the private ‘Yes
Bank’ launched its initial public offering. Roopal Ben Panchal, a resident of Ahmedabad, had allegedly opened
several fake DEMAT accounts and subsequently she raised finances on the shares allotted to her through Bharat
Overseas Bank branches. After detecting the irregularities in the buying of shares of YES BANK’s IPO, the
SEBI started a broad investigation. SEBI decided to release the orders of a sub-committee looking into NSDLs
role in the IPO scam and case of irregularities in dematerialisation of the shares of a company. Thus the case
comes up as NSDL v. SEBI case appealed to Securities Appellate Tribunal (SAT). Thus, SEBI had indicted
NSDL as far back as in 2006 for being responsible for not properly monitoring the Depository Participants and

5
thus being responsible for the scam. With this the SEBI issued ex-parte ad-interim order under Section 19 of the
Depositories Act, 1996 read with Section 11,11B of the Securities and Exchange Board of India Act, for
completing the inquiry. The SEBI initiated adjudication proceedings against NSDL under section 15 H of the
SEBI Act, 1992 and section 19 H of the Depositories Act, 1996. Thus the SEBI levied a monitory penalty of Rs.
5crores on NSDL.

In October 2010,Coal India IPO came and called as The Mother of All IPOs. Coal India Limited (CIL), the
largest coal producing company in the world, came up with the biggest ever Initial Public Offering (IPO) in the
history of the Indian stock market to raise funds close to INR 1,500,000 million. CIL, given an IPO grading of
5/5, offered 631.63 million equity shares through the IPO.Prior to this, the Reliance IPO had been the biggest
IPO ever.

This research paper is carried out with an intention to understand the problems faced by Indian Corporates in the
process of bringing an Initial Public Offer and its listing

thereafter. The study of IPO in this context had caught the researcher’s attention consider the momentum in the
Indian IPO market. With changed attitude of the Government at the Centre, mushrooming of IPOs and dynamic
regulatory environment, the companies that wish to go public are now thinking about the big step in a more
comprehensive and lateral manner. Thus it necessitates the study of the procedure for issue and Listing of IPO as
well as the challenges and obstacles that it poses.

Indian companies have raised Rs. 4,950 crore through the initial public offerings (IPO) in the first half of the
current fiscal year, according to Prime Database.In the first half of FY15, domestic companies had raised Rs.
1,017 crore through IPOs. The fund-raising through IPO is expected to gain traction going ahead, as more than
30 companies have filed draft papers with market regulator the Securities & Exchange Board of India (SEBI). At
present, 19 companies planning to raise Rs. 11,545 crore are holding SEBI approval and another 17 companies
intending to raise Rs. 6,795 crore have filed with SEBI and are awaiting approval, Pranav Haldea, Managing
Director of Prime Database has been quoted as saying.Meanwhile, Indian companies raised an additional Rs.
12,916 crore in the first six months of FY16 through the offer-for-sale (OFS) route due to the Government's
disinvestment programme.This is the best first half for the primary market since FY08, when INR 31,831 crore
was raised as per the India Infoline News Service (IIFL) on October 13, 2015.Thus, what follows ahead in this
paper is analysis of issue and listing procedure and hurdles they create for Indian companies contemplating an
IPO.

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7
 NEED & IMPORTANCE OF THE STUDY
This study is conducted to analyze the post issue performance of few selected companies that issued
fresh equity capital during the year 2019.The performance of shares after listing are considered. The companies
are selected on the basis of its price/share. The study on investor’s perception is confined only to IPO investors.
The study is to know whether the investors are satisfied with the IPO’s or not, and to see whether the companies
are aiming at share holders wealth maximization.

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 OBJECTIVES OF THE STUDY

a) To understand and evaluate the complex IPO process in view of the multiple statues and regulations
governing it.
b) To decipher the process for listing of IPOs under the altering regulatory environment.
c) To know the major factors affecting issue of shares through IPO.
d)To identify the real and probable hurdles faced by Indian Corporates in making Initial Public Offer.
e) To evaluate the short run and long run performance of Indian IPOs.
f) To do the comparative performance analysis of Indian IPOs vis-à-vis Indian stock market.

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 SCOPE OF THE STUDY
The scope of the study is limited to understanding the procedural issues pertaining to making an
IPO and Listing it with stock exchange(s). Further the scope is expanded to the extent of the
hurdles that the procedures and regulatory environment may create while the company gears up
for making an Initial Public Offer.

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 METHODOLOGY OF THE STUDY
For the collection of primary data, questionnaire was used. Our study enquires and brings forward the
results of specified objectives which relates to factors affecting the making of an IPO. This is a descriptive
research study that includes the surveys, reports and opinions expressed by authors of various research papers
relevant to our subject.
a) Data Collection:

The present study incorporates the collection of both primary and secondary data for a comprehensive
investigation.

 Primary Data: It has been gathered through structured unbiased questionnaire asked to 28 respondents
which includes investors, Directors of Public Companies, Company Secretaries, Financial Analysts, Chartered
Accountants, and Merchant Bankers etc.

 Secondary Data: The secondary data was collected from books, existing researches and reports,
newspaper articles, internet and magazines available online.

b) Sampling:

The sampling is based on Convenient Sampling Method. The tool used was a questionnaire consisting of two
different sets of questions to cover the perspective of the exchanges as well as the issuer.

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 LIMITATIONS OF THE STUDY

The research has been conducted on the basis of primary as well as secondary data. However, the primary
data has been collated through a basic and generalized questionnaire. Thus, the findings do not show outcomes in
specific and absolute terms. The respondents to the questionnaire include professionals and persons from various
walks of life no necessarily the financial markets and hence their responses are perception based.

There are procedural complexities as well as certain external factors that often act as hurdles in making an IPO
and its listing thereafter.

The study has been undertaken based on provisions of Companies Act 2013; not the Companies Act 1956 and
also the SEBI (Issue of Capital and Disclosure Requirements) 2009 as amended.

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 CHAPTER-2
REVIEW OF LITERATURE

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 REVIEW OF LITERATURE
G. Sabarinathan’s research article titled “Attributes of Companies Making IPOs in India-
Some Observations published by Social Science Research Network on December 30, 2010 pertain to different
windows of IPO activity, starting with the establishment of the Securities and Exchange Board of India (SEBI) in
1992. However, no study so far has examined the evolution of the attributes of the issuer. The establishment of
SEBI in its current empowered incarnation has been acknowledged to be a milestone in the evolution of the
Indian securities market. This paper is based on the belief that understanding the evolution of IPOs since the
establishment of SEBI may help in understanding the phenomena in the IPO market better. The paper also tries to

relate the changes in the profile of the issuers to certain regulatory developments which may have been intended
to influence those attributes of issuers and issuances. The observations in this paper provide useful pointers to
further research which may unravel the working of the Indian IPO market better. More importantly, they may be
useful in designing new securities market which could serve as alternatives to or complement the existing market
mechanisms.

b) ManasMayur, Sanjiv Mittal in their research article titled “Waves of Indian IPOs: Evolution and Trend”
published byAsia-Pacific Journal of Management Research and Innovation on July 2011 aims at understanding
the waves and pattern of Indian IPOs. It was found that most of the IPOs were from private sector companies.
The industry-wise trend in IPOs showed that most of the IPOs were launched by IT sector companies. It was
observed that year 1999–2000 and year 2005–06 was best in terms of investors' response whereas the period from
2001 to 2003 was worst in terms of investors' optimism. Current waves of Indian IPOs are divided into hot
market IPOs and cold market IPOs. A multivariate regression model is applied to empirically analyze issuers'
approach to time their issue with hot market condition. The result suggests that Market timers, identified as firms
that go public when the market is hot, tried to maximize the total proceeds at the time of IPO.

c) ManasMayur, Manoj Kumar in their article titled “Determinants of Going-Public Decision in an

Emerging Market- Evidence from India” on January-March, 2013investigates the determinants of going-public
decision of the Indian firms. The determinants were investigated by examining both ex-ante characteristics of the
IPO firms and ex-post IPO consequences of the IPOs. The ex-post analysis reveals that firms go public to:
finance their growth and investments, diversify owners’ risk, rebalance their capital structure, and bring down
their borrowing rates. This study provides useful insights for corporate managers, investors, market
intermediaries, stock exchange authorities, as well as for academic and business researchers. An understanding of

14
the motivation and costs associated with the going-public decision of Indian firms can enable the corporate
managers of private Indian firms to take an informed decision whether to become public or remain private.

d) Fernando, A Rosary Ramona; Deo, Malabika; Zhagaiah, R in their research titled “Stock Price
Performance of Initial Public Offerings: Evidence from India” published by International Journal of Research in
Social Sciences on May, 2013examines the price performance of Initial Public Offerings (IPOs) in India. The
study was conducted among 27 book building IPOs in India comprising of a period of five years from 1990 to
2004. All the issues were priced at premium. Since all are premium issues, they were categorized as low
premium IPOs and high premium IPOs. Low premium IPOs were taken as those whose issue price is five times
the face value of its shares and High premium IPOs were those whose issue price is ten times the face value of
their shares. The sample comprised 5 low premiums and 22 high premium IPOs. For the purpose of the analysis,
Shapiro Wilks “W” test

and Mann Whitney “U” test were conducted. The study shows that there is no much difference between low and
high premium issues, and suggests that mostly low premium issues

There has been enormous research on the performance of IPOs in India using different methods. Some of the
prominent literature related to the area is as discussed below:

Miller (2000) in his study explained the reason of IPO underperformance in the US stock exchange market. He
argued that investments are not made randomly, but are conditional on an investor’s expectations about the stock
risk adjusted returns. This means that stocks whose returns have been overestimated are more likely to be
included in the portfolio than stocks whose returns have been underestimated. As a result the returns on stocks
conditional to being included in the portfolio tend to be less than expected. This effect is especially important for
IPO’s where the divergence of opinion is especially high.

Gompers & Lerner (2001) in their study on IPO performance after the formation of NASDAQ analyzed the
performance of 3,661 IPOs issued between 1935 and 1972. They found some evidence of underperformance.

Loughran & Ritter (2002) in their study found a model that focused on the correlation between the money left as
the number of sold times the difference between the first market closing price and offer price. This theory is the
explanation of hot issue market. It also explained the reason of underpricing of issues.

Jacobsen (2005) in his study used a new approach for interpretation of long run return of stocks. It was found by
him that ‘buy and hold’ return of IPO and SEO stocks of Denmark under-performed the market by 27.3 % and by

15
21.4 % respectively. By applying the new approach it was found that after five years the same stocks
underperformed by 43.7 percent and 38.1 percent.

Rajib & Sahoo (2010) their study gave the evidence that the Indian IPOs are short-run underpriced and Long-run
under performed. The empirical results suggested that the investors investing in IPOs through direct subscription
are earning a positive market-adjusted return throughout the period of study. But investors who have bought
shares on the IPO listing day are earning negative returns up to 12 months from the listing date and expect to earn
positive market-adjusted return thereafter. Wealth Relative and buy and hold formula is used for the calculation
of IPO’s short and long run performance. It was found that the IPOs were underpriced in short run but
underperforming in long run.

Sohail & Rehman (2010) in their study used short run market adjusted abnormal rate for 73 stocks at the Karachi
Stock Exchange. This analysis has been done in three states of economy that is normal, Boom and recession. The
wealth relative formula has been applied to calculate the rate of return under different states of economy. Overall
it is concluded that the Pakistani IPOs outperformed in short-run basis under different states of economy by
rewarding the investors with positive abnormal returns.

Salgado & Robert (2010) in their study focused on after market performance of IPOs issued after privatization in
Chile stock markets during the period 1984-89. They discussed the operational details of the stock issuing
mechanism, complemented with a statistical study on the IPOs’ Market Adjusted Returns. While the sample size
was limited and did not support a significant external validity, the analysis confirmed the presence of aftermarket
performance patterns that were very similar to those observed in private IPOs reported elsewhere in the world.

Sabrinathan (2011) in his study argued that understanding the evolution of IPOs since the establishment of SEBI
may help in better understanding the IPO market. The study also tried to relate the change in the profile of the
issuers to certain regulatory developments which may have been intended to influence those attributes of issuers
and issuances. It has been experienced that the market is in its early days and some pointer are provided to design
a more effective system.

Mittel & Mayur (2012) in their study investigated the relationship between changes in insider's ownership around
during IPO and post-IPO. The performance deterioration test of Indian firms has been done to know the effect of
individuals and time on the IPO performance. Empirical analysis based on panel data showed that change in

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ownership inversely affects the performance of firm’s IPO. The influence of insiders' ownership on performance
was analyzed by considering promoters' ownership as one of the independent variables.

Ghosh (2012) studied IPOs in Indian banking sector which is the backbone of Indian economy. The study based
on key accounting parameters showed improvement in the performance of the banks in the post-listing period.
Also it was found that there is no difference in the IPO performance of the private and the public sector.

JASPREET KAUR: CONTRIBUTOR2016

JaspreetKaur is a Content Writer with IPO Central and has starting late joined our respected summary of
supporters. She has a place with business and composing establishment. An eager peruser, you will never find
her eating without a book close by!

The Financial Institutions

Budgetary establishments generally ensure the issue and advance term credits to the associations. Consequently,
routinely they encounter the draft of framework, consider the proposed program for open issue and support them.
IDBI, IFCI and ICICI, LIC, GIC and UTI are the a part of the budgetary associations that underwrite and give
cash related help. The lead

COLLECTION CENTERS

Overall there should be something close to 30 required assembling centers complete of the spots where stock
exchanges are found. In case the issue isn't outperforming Rs.10 Cr (excepting premium expecting any) the
mandatory aggregation centers are the four metropolitan centers viz. Mumbai, Delhi, Kolkatta and Chennai and
at all such centers where stock exchanges are arranged in the region in which the enrolled office of the
association is organized. The common divisions of the distinctive stock exchanges and the spots of their zones
are given in the going with table: Collection focuses

Region Exchange City

Northern Ludhiana Stock Ludhiana

Region Exchange Delhi
Delhi Stock Exchange Jaipur
Jaipur Stock Exchange Kanpur
U P Stock Exchange

17
 Southern Hyderabad Stock Hyderabad
Region Exchange Bangalore
Bangalore Stock Managlore
Exchange Chennai
Mangalore Stock Coimbatore
Exchange Cochin
Madras Stock Exchange
Coimbatore Stock
Exchange
Cochin Stock Exchange

Eastern Region Calcutta Stock Exchange Kolkatta

Gawahati Stock Gawahati
Exchange Patna
Magadh Stock Exchange Bhubaneswar
Bhubaneswar Stock
Exchange

Western
Region

In addition the accumulation branch, approved gathering specialists may likewise be selected. The names and

addresses of such operator ought to be given in the offer archives. The accumulation specialists are allowed to

gather such application cash as checks, draft, and stock-puts and not as money. The application cash so

gathered ought to be kept in the exceptional offer application account with the assigned booked bank either

around the same time or most recent by the following working day.

The applications gathered by the investors to the issue at various focuses are sent to the Registrar after

acknowledgment of the checks, inside a time of about fourteen days from the date of conclusion of people in

general issue. The applications joined by stock-contributes are sent specifically to the Registrars to the issue

alongside the timetables inside multi week from the date of conclusion of the issue. The speculators, who dwell

in places other than obligatory and approved focuses, can send their application with stock-contributes to the

Registrar to the issue specifically by enlisted post with affirmation due card.

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19
4.3

CHAPTER – III
COMPANY PROFILE
INDUSTRY PROFILE

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 COMPANY PROFILE
COMPANY DISCRIPTION
JM Financial is one of India’s leading financial services groups offering a wide range of services to a
significant
clientele that includes corporations, financial institutions, high net-worth individuals and retail investors.
JM Financial is a value-driven organisation with its values of integrity, teamwork, innovation, performance,
implementation and partnership forming the foundation to its approach.
BUSINESS MODEL
Over a period of time, JM Financial Limited (‘the Company’) has developed a business model wherein it
functions as the group holding company and operates through its subsidiaries, joint venture and associate
companies forming a well diversified yet integrated financial services group known as ‘JM Financial’.
Over three decades, JM Financial has been and continues to be one of the most reputed and trusted brands in
the financial services domain in India. The Company through its subsidiaries, joint venture and associate
companies, offers a bouquet of financial services and products under the brand of JM Financial which includes
investment banking, institutional equity sales, trading, research and broking, wealth management, equity broking,
portfolio management, asset management, commodity broking, Non Banking Financial Company (NBFC)
activities, private equity fund, real estate fund, special situations fund and asset reconstruction. All these
Businesses are headed by experienced and proactive professional managers having deep understanding of the
Vision

To be the most trusted partner for every stakeholder in the financial world.

 Earning trust is a process (it can be gained and lost every day!)

 Sharing trust creates great teams (whether between employees or between organizations)

 Being trust worthy is the most efficient way of generating and retaining long-term business

 Self–trust is the starting point of trusting others

1994 with a simultaneous launch of three funds-JM Liquid Fund (now JM Income Fund), JM Equity Fund and
JM Balanced Fund. Today, JM Financial Mutual Fund offers a bouquet of funds that caters to the diverse needs
of both its institutional and individual investors.

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Our mission is to manage risk effectively while generating top quartile returns across all product categories. We
believe that to cultivate investor loyalty, we must provide a safe haven for their investments. We are focussed on
helping our investors realize their investment goals through prudent advice, judicious fund management,
impeccable research, and strong systems of managing risk scientifically.

We strive to give our family of investors many reasons to celebrate.

BOARD OF DIRECTORS

JM Financial Limited, the flagship listed company of the Group, is led by the Chairman & Managing Director ,
Mr. Nimesh Kampani. The members of the Board meet periodically to discuss and review the performance of the
Company.

Mr. Nimesh N. Kampani – Chairman, JM Financial Group

Dr. Vijay Kelkar
Mr. Ashith N. Kampani
Mr. E. A. Kshirsagar
Mr. D. E. Udwadia
Dr. Pravin P. Shah
Mr. Paul Zuckerman

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 INDUSTRY PROFILE
BOOK BUILDING:-
Book building is a system through which the underlying open contributions (IPOS) occur in the
U.S. what's more, in India it is picking up significance with each issue. The greater part of the ongoing new issue
offered in the market has experienced Book Building process. Comparable components are utilized in the
essential market contributions of GDRs too. In this procedure the value assurance depends on orders set and
speculators have a chance to put orders at various costs as honed in worldwide contributions.

The proposals given by Malegam Committee cleared route for the presentation of the book building process in
the capital market in Oct 1995. Book building includes firm designation of the instrument to a syndicate made by
the lead directors who pitch the issue at a satisfactory cost to people in general. Initially the elixir of book
building process was accessible to organizations issuing more than Rs.100 cr. The confinement on the base size
was expelled and SEBI offered impression to embrace the book building strategy to issue of any size. In the
outline, the organization needs to determine the arrangement parcel under book building process. The securities
accessible to people in general are independently known as net offer to the general population.

Among the lead supervisors or the syndicate individuals from the issue or the shipper financiers as part. The
backer organization as a book sprinter selects this part and his name is said in the draft outline. The book sprinter
needs to circle the duplicate of the draft plan to be recorded with SEBI among the institutional purchasers who
are qualified for firm designation. The draft plan ought to show the value band inside which the securities are
being offered for membership.

The offers are sent to the book sprinters. He keeps up a record of names and number of securities offered and the
cost offered by the institutional purchaser inside the arrangement partition and the cost for which the request is
gotten to the book sprinters. The book sprinter and the backer organization finish the cost. The issue cost for the
situation bit and offer to general society ought to be the same. Guaranteeing assention is gone into after the
obsession of the price.One day sooner to the opening of the issue to people in general, the book sprinter gathers
the application frames alongside the application cash from the institutional purchasers and the guarantors. The
book sprinter and different delegates associated with the book building procedure ought to keep up records of the
book building process. The SEBI has the privilege to review the records.Book working as talked about is a
procedure of offering securities in which offers at different costs from speculators through syndicate individuals
are gathered. In view of offers, interest for the security is evaluated and its cost found. If there should be an
occurrence of typical open issue, financial specialist knows the cost ahead of time and the interest is known at the
23
end of the issue. If there should be an occurrence of open issue through book building, request can be known
toward the finish of regular however cost is known at the end of issue. A backer organization proposing to issue
capital through book building has two alternatives viz., 75% book building course and 100% book building
course. If there should be an occurrence of 100% book building course is received, not over 60% of net offer to
open can be dispensed to QIBs (Qualified Institutional Buyers), at the very least 15% of the net offer to general
society can be assigned to non-institutional speculators applying for in excess of 1000 offers and at least 25% of
the net offer to open can be allotted to retail financial specialists applying for up to 1000 offers. On the off chance
that 75% of net open offer is made through book building, not over 60% of the net offer can be apportioned to
QIBs and at least 15% of the net offer can be distributed to non-institutional financial specialists. The
equalization 25% of the net offer to open, offered at a cost decided through book building, are accessible to retail
singular financial specialists who have either not taken part in book assembling or have not gotten any
distribution in the book constructed divide. Apportioning to retail individual or non-institutional financial
specialists is made based on relative allocation framework. In the event of under membership in any
classification, the un-bought in divides are assigned to the bidder in different classifications. The book
constructed partition, 100% or 75%, by and large, of the net offer to open, are necessarily guaranteed by the
syndicate individuals or book sprinters.

Different necessities for book building include:

• Bids stay open for no less than 5 days.

• Only electronic offering is allowed.

• Bids are submitted through syndicate individuals.

• Bids can be changed.

• Bidding request is shown toward the finish of consistently.

• Allotments are made not later than 15 days from the conclusion of the issue and so forth.

The 100% book building has made the essential issuance process relatively quicker and financially savvy and
exchanging can start from T+16.

24
The SEBI rules for book building gives that the organization ought to be permitted to unveil the floor cost, only
preceding the opening date, rather than in the Red herring plan, which might be finished using any and all means
like an open promotion in daily paper and so on. Adaptability ought to be given to the guarantor organization by
allowing them to show a 20% value band. Guarantor might be given the adaptability to modify the value band
amid the offering time frame and the backers ought to be permitted to have a shut book building i.e. the book
won't be made open. The compulsory prerequisite of 90% membership ought not be considered with strictness,
but rather the outline ought to reveal the measure of least membership required and hotspots for meeting the
deficit. The Primary Market Advisory Committee prescribed the act of 'green-shoe alternative' accessible in
business sectors abroad which is an 'over apportioning' choice allowed by the backer to the guarantor in an open
advertising. This causes the syndicate part to over designate the offers to the degree of alternative accessible and
to therefore buy extra offers from the backer at the first offering cost with a specific end goal to cover the over-
distributions.

Settled VERSUS BOOK BUILDING ISSUES

The principle contrast between offer of offers through book building and offer of offers through typical open
issue can be distinguished on the accompanying parameters:

• Priceat which securities will be allocated isn't known if there should arise an occurrence of offer of offers
through Book Building while if there should arise an occurrence of offer of offers through typical open issue,
cost is known ahead of time to financial specialist. Under Book Building, financial specialists offer for shares at
the floor cost or above and after the conclusion of the book building process the cost is resolved for portion of
offers.

• In instance of Book Building, the demandcan be referred to ordinary as the book is being manufactured.
In any case, if there should arise an occurrence of the general population issue the interest is known at the end of
the issue.

ON-LINE INITIAL PUBLIC OFFERS (IPO)

An organization proposing to issue funding to open through on-line arrangement of the stock trade needs to
follow Section 55 to 68A of the Companies Act, 1956 and SEBI Guideline, 2000. The organization is required to
go into a concurrence with the stock exchange(s), which have the essential framework for on-line offer of
securities. The understanding should cover rights, obligations, duties and commitments of the organization and
the stock trades between se, with arrangement for a debate goals instrument between the organization and the
25
stock trade. The guarantor organization chooses a Registrar to the Issue having electronic network with the stock
trades. The backer organization can apply for posting of its securities at any trade through which it offers its
securities to open through on-line framework, aside from the necessity of posting on the provincial stock trade.
The stock trade selects representatives to accept applications and putting orders with the organization. The lead
administrator would co-ordinate every one of the exercises among different mediators associated in the
framework. Notwithstanding the over, the SEBI rules additionally give points of interest of the substance of the
offer report and notice, different prerequisites for issues of securities, similar to those under Rule 19(2)(b) of
SC(R) Rules, 1957. The rules additionally set down definite standards for issue of obligation instruments, Issue
of capital by assigned monetary foundations and particular/extra issues.

Qualification TO ISSUE SECURITIES

The issues of cash-flow to open by Indian organizations are represented by the Disclosure and Investor Protection
(DIP) Guidelines of SEBI, which were issued in June 1992. SEBI has been issuing elucidations to these rules
every now and then going for streamlining the general population issue process. Keeping in mind the end goal to
give an extensive inclusion of all DIP rules, SEBI issued a summary arrangement in January 2000, known as
SEBI (DIP) Guidelines, 2000. The rules give standards identifying with qualification to organizations issuing
securities, evaluating of issues, posting necessities, exposure standards, secure period for promoter's
commitment, substance of offer reports, pre-and post-issue commitments, and so forth. The rule applies to every
open issue, offers available to be purchased by recorded and unlisted organizations.

Qualification Norms: Any organization issuing securities through the offer archive needs to fulfill the
accompanying conditions:

• A organization making an open issue of securities needs to document a draft outline with SEBI, through a
qualified shipper investor, no less than 21 days before the recording of plan with the Registrar of Companies
(RoCs). The recording of offer report is obligatory for a recorded organization issuing security through a rights
issue where the total estimation of securities, including premium, assuming any, surpasses Rs.50 lakh. An
organization can't make an open issue except if it has made an application for posting of those securities with
stock exchan

26
 CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

27
 DATA ANALYSIS AND INTERPRETATION

1. Gender of Investors.
Table No.1

Male 92
Female 08
Total 100

Source: Primary data

Graph no.1

100
92
100
90
80
70
60
50
40
30
20 8
10
0
Male Female Total

INTERPRETATION:- 92% investors are male. And 8% female.

Here we can suggest male investors can opted ipo investments aim of increased wealth.

The main purpose of the study to identify the perception about Ipo in stock market .

28
 2. Age group of investors

Table No.2.

(a) 15 to 35 35

(b) 35 to 50 42

(c) 50 to 60 18

(d) Above 60 05

Total 100

Source: Primary
Data

Graph No.2

Age group
45%

40%

35%

30%

25% Age group

20% 42%
35%
15%

10% 18%
5%
5%
0%
15 to 35 35 to 50 50 to 60 Above 60

Interpretation:- 42% investors age between 35 to 50 and

35% investors age between 15 to 35.

29
 3.Investors Annual Income?
Table No.3

(a) >1,00,000 10

(b) 1,00,000 to 2,00,000 21

(c) 2,00,001 to 3,00,000 24

(d) <3,00,000 and Above 45

Total 100

Source: Primary Data

Graph No.3

Annual Income
50%
45%
40%
35%
30%
25% Annual Income
45%
20%
15%
21% 24%
10%
5% 10%
0%
>1,00,000 1,00,000 to 2,00,001 to <3,00,000 And
2,00,000 3,00,000 Above

Interpretation:- 45% investors annual income more than 3,00,000. And 24% investors income

Between 2,00,001 to 3,00,000.

30
 4. Area to which investors belong?
Table No.4

(a) Rural 05

(b) Urban 95

Total 100

Source: Primary Data

Graph No.4

100
95
100
90
80
70
60
50
40
30
20 5
10
0
(a) Rural (b) Urban Total

Interpretation:- 95% investors belong to urban area.

31
 5. Occupation
Table No.5

Consultant 17

Engineer 18
Builder 25
Businessman 40
Total 100
Source: Primary Data

Graph No.5

Occupation
45%

40%

35%

30%

25% Occupation

20% 40%

15%
25%
10% 18%
17%
5%

0%
Consultant Engineer Builder Business man

Interpretation:- 40% investors are businessman. And 25% builder , 18% engineer,

17% engineers.

32
 6. How much do you invest in IPO’s?
Table No.6

(a) 1000-10,000 04
(b) 10,001-50,000 44
(c) 50,001-5,00,000 38
(d) 5,00,001 and Above 14
Total 100
Source: Primary Data

Graph No. 6
50%
45%
40%
35%
30%
25%
44%
20% 38%
15%
10%
14%
5%
4%
0%
1,000-10,000 10.001-50,000 50,001-5,00,000 5,00,001 and
above

Interpretation:-44% of the investors, invest around 10,000 to 50,000 and 38% of investors, invest around 50,001
to 5, 00,000.

33
 7. What do you see before investing in IPO?
Table No.7

(a) Promoters Background 18

(b) sector Performance 36
(c) Performance of existing companies 32
(d) Premium amount 14
Total 100
Source: Primary Data

Graph No.7
40%

35%

30%

25%

20%
36%
32%
15%

10%
18%
14%
5%

0%
promoter Background Sector Performance performance of Premium Amount
existing companies

Interpretation:-36% of the investors say they go by sector performance and 32% of them say they go by the
performance of theexisting companies.

34
 8. What is the source of information you use?
Table No.8

(a) Print Media 30

(b) Electronic Performance 28
(C) Expert Opinion 26
(d) Friend Advice 16
Total 100
Source: Primary Data

Graph No.8

Source of Information
35%

30%

25%

20%
Source of Information
15% 30% 28% 26%
10%
16%
5%

0%
Print Media Electronic Expert Opinion Friend Advice
Media

Interpretation:-30% of investor say the source of information is print media, 16% say electronic media, 28% go
with expert opinion and 26% agree to their friends advice.

35
 9 Factors considered for IPO.
Table No.9

Factors VHC HC LC NC

1. Company Goodwill 50 35 08 07

2. Market Share 48 29 14 09

3. Corporate Profile 35 43 16 06

4. Historical background 28 33 20 19

5. Board member 17 44 27 12

6. Legal matter 42 31 20 07

7. Current financial position 47 34 11 08

8. Percentage subscription 18 25 38 19

9. Future Prediction and Forecast 10 21 34 35

10. Management quality 17 41 16 26

11. Market response to the IPO 25 42 20 13

12. Size of the IPO issued 29 35 22 14

13. Key shareholders 13 27 38 22

14. Broker Advice 31 39 27 03

15. Comments in the media 26 35 14 24

16. Legitimacy 27 38 19 16

17. Market driven valuation 47 41 08 04

18. Corporate governance practices 23 29 33 15

19. Compliances and Litigation history 13 24 40 23

20. New project risk and prospects 46 32 11 10

Source: Primary Data

Graph No.9

36
 New Project Risk and Propects 46% 32% 11% 10%
Compliances and Litigation History 13% 24% 40% 23%
Corporate Governance Practices 23% 29% 33% 15%
Market Driven Valuation 47% 41% 8% 4%
Legitimacy 27% 38% 19% 16%
Comments in the media 26% 36% 14% 24%
Broker Advice 31% 39% 27% 3%
Key Shareholders 13% 27% 38% 22%
Size of the IPO Issued 29% 35% 22% 14%
Market Response to the IPO 25% 42% 20% 13% VHC
HC
Management Quality 17% 41% 16% 26%
LC
Future Prediction and forecast 10% 21% 34% 35% NC
Percentage Subscription 18% 25% 38% 19%
Current Financial Position 47% 34% 11% 8%
Legal matter 42% 31% 20% 7%
Board Member 17% 44% 27% 12%
historical background 28% 33% 20% 19%
Corporate Profile 35% 43% 16% 6%
Market share 48% 29% 14% 9%
Company Goodwill 50% 35% 8% 7%

0% 20% 40% 60% 80% 100% 120%

Note:- VHC- Very high consider, HC- High consider, LC- Low consider, NC- Not Consider

Translation:- half speculators high consider for organization generosity , 48% Very high consider for piece of the
pie, 43% high consider for corporate profile, 33% high consider for recorded foundation, 44% high consider for
board part, 31% high consider for lawful issue, 47% high consider for current budgetary position, 38% low
consider for rates membership, 35% not consider for future expectation and gauge, 41% high consider for
administration quality, 42% high consider for showcase reaction to the IPO, 35% high consider for size of the
IPO issued,

37
 10. How long are you trading in stock and IPO’s?
Table No.10

(a) 1yr.-2yr 12

(b) 3yr-5yr 48

(c) 6yr-10yr 28

(d) 11yr and Above 12

Total 100

Source: Primary Data

Graph No.10

60%

50%

40%

30%

48%
20%

28%
10%
12% 12%

0%
1 yr.- 2yr 3yr-5yr 6yr- 10yr 11yr and above

Interpretation:-48% investors are trading for 3 years to 5 years. And 28% for 6 to 10 yr.

38
 11. What is your advice to new investors in IPO?
Table No.11

(a) Go by only Promoters 14

(b) Go by only Premium 30
(c) Go by only sector performance 42
(d) Go by all of the above 14
Total 100

Source: Primary Data

Graph No.11
45%

40%

35%

30%

25%

20% 42%

15% 30%

10%
14% 14%
5%

0%
Go by only Promoters Go by Only premium Go by only Sectors Go by of all the above
Performance

Interpretation:-42% investors advice the new investors to go by only sector performance. 30% investors advice
go by only premium.

39
40
 12.Do you go by the grading before investing?
Table No.12

(a) Yes 48
(b) No 52
Total 100
Source: Primary Data

Graph No. 12

100
100
90
80
70
52
60 48
50
40
30
20
10
0
(a) Yes (b) No Total

Interpretation:-52% investors does not go by the grading before investing. And

48% investors go by grading before investing.

41
 13.How much Percentages have you gained on IPO listing?
Table No.13

(a) Below 10% 20

(b) Up to 10% 34
(c) 10%-15% 30
(d) 15% and Above 16
Total 100

Graph No.13

40%

35%

30%

25%

20%
34%
15% 30%

10% 20%
16%
5%

0%
Below 10% UP TO 10% 10%-15% 15% and Above

Interpretation:-34% of investors say they have gained upto 10% and 30% say for
10% to 15%.

42
 14. Is it better to invest in IPO or Pick the same stock on listing?
Table No.14

(a) Invest in IPOs 20

(b) Pick the same stock on listing 32

(c) partly invest in IPO and pick the stock on listing 28

(d) Wait sometime after listing 16

Total 100

Graph No.14
35%

30%

25%

20%

32%
15%
28%

10% 20%
16%
5%

0%
Invest In IPOs Pick the same stock on partly invest in IPO and Wait sometime after
listing Pick the stock on listing listing

Interpretation:-32% of the investors feel that its better to pick the same stock on the listing. 28% investors feel
they would partly invest in IPO and pick the stock on listing.

43
 15. How do you come to know about the new IPO listing?
Table No.15

(a) Through broker 20

(b) Through television 20
(c) Through friend 38
(d) Through Newspaper 22
Total 100

Graph No.15

40%

35%

30%

25%

20% 38%
15%

10% 20% 20% 22%

5%

0%
Through broker Through Telivision Through Friend through newspapers

Interpretation:-38% of the investors come to know about the new IPO listings through their friends. And
investors say 22% for newspaper and 20% for television and broker.

44
 16. What is the purpose of IPO investment?

Table No.16

(a) Listing gain 47

(b) Long term gain 53
Total 100

Graph No.16

100
100
90
80
70
53
60 47
50
40
30
20
10
0
(a) Listing gain (b) Long term gain Total

Interpretation:- 53% investors say long term gain their purpose of IPO investment and

47% investors say listing gain.

45
 17. How do you feel about the procedure for IPOs?

Table No.17

(a) Easy 32
(b) Difficult 08
(c) Complicated 16
(d) Lengthy 44
Total 100
Source: Primary Data

Graph No.17

50%

45%

40%

35%

30%

25%
44%
20%

15% 32%

10%
16%
5% 8%
0%
Easy Difficulty Complicated Lenghthy

Interpretation:-44% of the investors feel the procedure for applying for an IPO is lengthy, 32% feel easy and
simple.

46
 18. What difficulties did you face after applying IPOs?

Table No.18

(a) Refund problem 16

(b) Delay in crediting allotted share to your DEMAT account 28

(c) No clarity in allotment 30

(d) None of the above 26

Total 100

Source: Primary Data

Graph No.18
35%

30%

25%

20%

15% 30%
28%
26%
10%
16%
5%

0%
Refund Problem Delay in crediting No clarity in allotment None of the above
allotted shares to your
DEMAT Account

Interpretation:-30% of the investors say the delay in crediting allotted shares to the demat account. 28% say no
clarity in allotment and 26% say they never faced difficulties. And 16% say refund problem.

47
 CHAPTER- 4

FINDINGS AND SUGGESTIONS

48
 FINDINGS
1. 90% speculators are very much aware of IPOS

2. 44% of the speculators, contribute around 10,000 to 50,000 and 38% of financial specialists, contribute
around 50,000 to 5, 00,000.

3. 32% of the speculators feel that its better to pick a similar stock on the posting. 28% financial specialists
feel they would incompletely put resources into ipo and pick the stock on posting.

4. 36% of the financial specialists say they pass by division execution and 32% of them say they pass by the
execution of the current organizations.

5. 30% of financial specialist say the wellspring of data is print media, 16% say electronic media, 28% run
with master sentiment and 26% consent to their companion's recommendation.

6. 48% financial specialists are exchanging for a long time to 5 years.

7. 42% financial specialists exhortation the new speculators to pass by just part execution.

8. 52% financial specialists don't pass by the evaluating before contributing.

9. 34% of financial specialists say they have picked up upto 10% and 10% to 15%.

10. 44% of the financial specialists feel the strategy for applying for an ipo is protracted, 32% feel simple and
straightforward.

11. 30% of the financial specialists say the postponement in attributing designated offers to the demat
account.

12. 28% say no lucidity in allocation and 26% say they never confronted challenges.

13. Investors say yes and no at 30% about the familiarity with the methods previously applying for ipos.

14. 46% of speculators anticipate that around half will 100% and 34% financial specialists anticipate that the
profits up will 10% - half.

15. Investors say yes and no at 30% about the consciousness of the techniques previously applying for IPOs.

49
 SUGGESTIONS

1. The interest in IPO can demonstrate excessively unsafe in light of the fact that the speculator does
not know anything about the organization since it is recorded first time in the market so its execution can't
be measure

2. Investors of the optional market must participate in the essential markets as it has been seen that
IPO movement in Indian Stock Market has been enormously developing. What's more, IPO is the most
secure stock exchange speculation.

50
 CONCLUSIONS
 The interest in IPO can demonstrate excessively dangerous on the grounds that the financial specialist
does not know anything about the organization since it is recorded first time in the market so its execution can't
be measure.

 On the other hand it very well may be said that the higher the hazard higher the profits earned. So we can
state that the however hazardous if venture is done then it can give higher returns also.

 For model we can take the case of Reliance control. The Investors put resources into immense sums with
the confidence that they will get great returns yet nothing occurred so when the IPO got recorded. So one should
think and put resources into IPO

 Primary advertise is more unstable than the auxiliary market since every one of the organizations are
recorded without precedent for the market so nothing can be said in regards to its execution.

 If higher hazard is taken, it is constantly compensated with the higher returns. So higher the hazard the
more the profits compensated for it.

 "We can reasonably anticipate the future, however can't get it going as it may be."

51
 BIBLIOGRAPHY
Websites:-
www.nscindia.com

www.bscindia.com

www.moneycontrol.com

www.ipohome.com/hie-gerieooie/htm

www.essortment.com/gteorerui-100%dkfjdkei.pdf

www.investopedia.com/reserchpaper.froee-heofdvl%fkldks/

www.ipoavenue.com/ariownnipo-progress&arojsrei/5%akd2e32/

www.bullishindian.com

www.rupya.com

www.investorguide.com

www.hdil.in/

52
 Annexure

Questionnaire
Name ______________________________ Today’s date______________

Address ______________________________________________________

City, State_____________________________

Contact No.____________________________

1. Gender of Investors

(a) Male  (b) Female

2. Age group of investors.

(a) 15 to 35  (b)35 to 50

 (c)50 to 60  (d)Above 60

3. Your annual Income?

(a) >1,00,000 (b) 1,00,000 to 2,00,000

(c) 2,00,001 to 3,00,000  (d)< 3,00,001 and Above

4. Which area you belong?

(a) Rural (b) Urban

5. Occupation

(a) Businessman  (b)Engineer  (c)Builder

(d) consultant

 (e)Others, Please specify______________________________________

6. How much do you invest in IPO’s?

 (a)1000-10000 (b)10001-50000

(c)50001-500000  (d)500001 and above

7. What do you see before investing in IPO?

53
 (a) Promoters background (b)Sector performance

(c)Performance of existing companies (d) Premium Amount

8. What is the source of information you use?

(a) Print Media (b) Electronic Media

(c)Expert Opinion (d) Friend Advice

9. Factors considered for IPO

S. NO. Factors VHC HC LC NC

1. Company Goodwill
2. Market Share
3. Corporate Profile
4. Historical Background
5. Board Member
6. Legal Matter
7. Current Financial Position
8. Percentage Subscription
9. Future Prediction and Forecast
10. Management Quality
11. Market Response to the IPO
12. Size of the IPO Issued
13. Key Shareholders
14. Broker Advice
15. Comments in the Media
16. Legitimacy
17. Market Driven Valuation
18. Corporate Governance Practices
19. Compliances and Litigation History
20. New Project Risk and Prospects

10. How long are you trading in stock and IPO’s?

(a)1year-2years (b)2years- 5years

(c)5years-10years (d)10years and Above

11. What is your advice to new investors in IPO?

(a) Go by only promoters

(b) Go by only premium

(c) Go by only sectors performance

54
 (d) Go by all of the above
12. Do you go by the grading before investing?

(a) Yes (b) No

13. How much percentages have you gained on IPO listing?

(a)Below 10% (b) up to10%

(c)10%-15% (d)15% and Above

14. Is it better to invest in IPO or Pick the same stocks on listing?

(a) Invest in IPOs

(b) Pick the same stock on listing

(c) Partly invest in IPO and pick the stock on listing

(d) Wait sometime after listing

15. How do you come to know about the new IPO listing?

(a) Through broker (b)Through television

(c)Through Friend (d) Through Newspapers

16. What is the purpose of IPO investment?

(a)Listing Gain (b)Long term Gain

17. How do you feel about the procedure for IPO’s?

(a)Easy (b)Difficult

(c)Complicated (d)Lengthy
18. What difficulties did you face after applying IPO’s?

(a)Refund Problem (b) Delay in crediting allotted shares to your DEMAT Account

(c)No clarity in allotment (d) None of the above

55