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PRIMARY MARKET
FUNCTIONS OF NEW
ISSUES/PRIMARY MARKET
Channeling of investible funds into
industrial enterprises through the tripleservice function
Origination
Underwriting
Distribution
FUNCTIONS OF NEW
ISSUES/PRIMARY MARKET
PRIMARY MARKET
Origination
FUNCTIONS OF NEW
ISSUES/PRIMARY MARKET
PRIMARY MARKET
Underwriting
FUNCTIONS OF NEW
ISSUES/PRIMARY MARKET
PRIMARY MARKET
Distribution
Issues Types
Pricing of Issues
Pricing of IPO is generally decided by the
company in consultation with the lead manager.
Following parameters play leading role in the
pricing decision.
Book Value/ Networth of the company
Average EPS of the company during the
preceding three years.
Valuation of intangible assets including
goodwill
Equity Price of similar company
PRIMARY MARKET
PRIMARY MARKET
PRIMARY MARKET
ABRIDGED PROSPECTUS
Method of Pricing:
Fixed Price vis--vis Book
Building
Book Building
million shares to be
issued.
Actual
allocation at
Price Rs.53 which is
the cut off price.
No. of
Shares
Bid
Price
Cumulative
Shares
200000 55
200000
400000 54
600000
600000 53
1000000
Book Building
PRIMARY MARKET
RIGHTS ISSUE
It is the issue of new shares in which the
existing shareholders are given preemptive
rights to subscribe to the new issue on a prorata basis
The right is given in the form of an offer to
existing shareholders to subscribe to a
proportionate number of fresh, extra shares at
a price. A shareholder has four options
1. Exercise his rights and buy new shares at the
offered price.
2. Renounce the right and sell them in open
market
3. Renounce part of his rights and exercise the
remainder
4. Choose to do nothing.
Emerging Trends
Shares
Reverse
Split
Issue of Bonus Share - increases the paid
up capital and reduces the reserves.
Emerging Trends
Share
IPO
Rating
Green Shoe option - issuer can issue more
shares in case of oversubscription on a prorata
basis. The green shoe option can be a maximum
of 15% of the public offer.