CHAPTER 1

INTRODUCTION

INTRODUCTION
Initial Public Offering (IPO) is a companys offering of newly issued shares from
treasury to general public .it is generally the first time that a company does so-making the
transition from being a closed door privately operated company to being a public traded,
highly visible, entity. When doing an IPO, an under writer ,i.e. a share broker firm, handles
the distribution of shares to the public effectively the brokerage firm subscribers
(underwriters) for the shares and then sell to the clients(investors).After the IPO the shares
will then trade on a stock exchange, it is sometimes refereed to as going to the
public.enterpreneurs and VCs(venture or vulture capalists sometimes call it cash in up
until a company is public(i.e. any one can buy or sell its shares) ,it is private and operates
away from the lime light. Companies often go to public to raise huge amount of money or to
give up investors liquidity.
An initial public offering is the point at which a company ceases to be privately held
and becomes publicly held and IPO requires that a company become listed on a stock
exchange, and that its shares become publicity traded. Going public places very stringent
reporting requirements on the company and the sale of shares brings in new investment
monies that the company can then use to grow.

DEFINITION OF IPO

Abbreviation for Initial Public Offering. An IPO is a companys first sale of stock
to the public, also refer to as going to the public.

The flotation of private company on the stock exchange

The sale or distribution of a stock of a portfolio company to the public to the first to
the public.

The first time a company listed on the stock exchange is known as an IPO, new
shares issuer or floatation. It is away for company to raise cash-and their profiles.

NEED AND IMPORTANCE

Investing in IPO has its own set of advantages and disadvantages. Where on one hand, high
element of risk is involved, if successful, it can even result in a higher rate of return. The rule
is: Higher the risk, higher the returns.
The company issues an IPO with its own set of management objectives and the investor
looks for investment keeping in mind his own objectives. Both have a lot of risk involved.
But then investment also comes with an advantage for both the company and the investors.
The significance of investing in IPO can be studied from 2 viewpoints for the company and
for the investors. This is as follows

Significance to the company:

When a privately held corporation needs additional capital, it can borrow cash or sell stock to
raise needed funds. Or else, it may decide to go public. "Going Public" is the best choice
for a growing business for the following reasons:
When a company sells its stock publicly,there is a possibility for appreciation of the
share price due to market factors not directly related to the company
It allows a company to tap a wide pool of investors to provide it with large volumes
of capital for future growth

SIGNIFICANCE TO THE SHAREHOLDERS

The investors often see IPO as an easy way to make money .One of the most attractive
features of an IPO is that the shares offered are usually priced very low and the companys
stock prices can increase signicantly during the day the shares are offered.This is seen as a
good opportunity by the speculative Investors looking to notch out some short-term
profit.The Speculative Invesors are interested only in short-term profit potential rather than
long-term gains

OBJECTIVES OF THE STUDY

To analyze the returns generated by some of the latest IPOs, taking into
consideration the variation in share price and the issue price.

Graphically study on the movement of the share prices.

To check whether it is better to sell the stock on the day it is listed or to hold it for
long time.

Information about some of the latest IPOs and the returns they have generated is
being studied here

To know how to raise fund for the companies going public, what are its pros and
cons, and also it gives us detailed idea why companies go public

How IPO is driven in the market and what are various factors taken into consideration
before going for an IPO.

SCOPE OF THE STUDY

The scope of the project includes acquiring knowledge about the Initial public
offering industry. As a whole this included the detailed study of IPO, their types, benefits and
present scenario, the risk and return relationship related to the investment avenues
It has provided an opportunity to apply the financial planning process in practice and
recommend financial strategies to investors. It enabled to create awareness among the
investors and it also helps investors in understanding the risk and return
It has helped me to put the learning into practice and get a feel of the market by
interactions with the prospective investor

LIMITATIONS OF THE STUDY

1. The study is conducted in short period due to which the study may not be detailed in
all aspects
2. The study is limited due to non-availability of analytical software
3. The IPOs have been taken between Jan 2009 to Jan 2010 and all IPOs are Indian
companies
4. The project is limited to equities only and does not considered areas, GDR, and also
corporate debt offering
5. The project is based on secondary data available from monthly fact sheets, websites,
offer documents, magazines and newspapers etc as primary data was not accessible

ORGANISATION OF THE STUDY

Organization of the study deals with the arrangement of the data. The entire work is arranged
chapter wise to facilitate easy identification of topics.5 chapters serve the purpose.
1. The first chapter deals with Need and Importance of the study, Objectives of the
study, Research Methodology and Scope of the study and Limitation of the study.
2. The second chapter deals with Literature Review, Introduction to IPO, Advantages
and Disadvantages of IPO, Role of SEBI, Underwriters-Advantages and
Disadvantages.
3. The third chapter deals with USHA KIRAN FINANCE LIMITED company profile
4. The fourth gives the complete account of data analysis and interpretation of IPO.
5. The fifth chapter deals with Conclusion and Suggestions.

CHAPTER-2
REVIEW OF LITERATURE

RESEARCH METHODOLOGY

The data needed for was collected from both the primary and secondary sources
PRIMARY DATA:
To generate primary data for the analysis ,direct personal interview and discussion
was made with company assistant manager of finance, accountants and other officials.
SECONDARY DATA:
The secondary data was collected from the magazines ,journals and internet and other
publications to understand the relevant topic of Initial Public Offering.
For gathering secondary data various sources were used, they are
o Different accounting records of the company
o Magazines and journals
o Internet and other publications

The daily experience, observation and knowledge gained out of full work time at
USHA KIRAN FINANCE LTD was recorded separately

The theoretical knowledge gained out of the primary and secondary sources of data ,and
practical knowledge gained out of working at USHA KIRAN FINANCE LTD was then be
integrated to prepare in-depth and comprehensive report, which would address topic from
both theoretical and practical point of view

The following are the surveys

SURVEY-1
1. Kenji and Smith (2009)
Kenji and Smith (2004) study the benefits and drawbacks of auctions versus book building as
a method of IPO issuance in Japan. Their reason for choosing Japan as a test environment
was due to the fact that book building has been a legal way of going public in Japan since
1997. Previously, auctioning was the only way that a company could go public in Japan. In
their research, Kenji and Smith use the total issue cost as a percentage of the value of the
issue to measure the benefits and drawbacks of the different methods of going public.
The data that is used in this paper is a sample of 484 IPOs by companies that are listed on the
JASDAQ or JASDAQ-OTC markets during a five-year period from 1995 to 1999. This
included 321 auction IPOs and 163 book built IPOs. However, due to varying market
conditions during the years spanning from 1995 to 1999, the research has been divided into
two different sections. The first section uses all the data from the whole sample period,
whereas the second section uses data only from the years 1996 through 1998, when the
market was characterized by very stable market conditions.
During the whole period, the total issue cost against the aftermarket price in book built IPOs
is an average of 28,04%, whereas the auction priced cost is only 8,17%. However, the second
sample (1996-1998) notes values of 15,3% and 7% respectively. The data demonstrates that
the book building method provides more flexibility, making small issues appear to be more
feasible, and decreasing the cost of going public for larger companies.
In conclusion, Kenji and Smith found that under the auction method, high quality issuers had
a limited ability to distinguish themselves from low quality issuers. Furthermore, the research
found that small and risky firms, as a group, incur higher costs with book building, whereas
10

larger and better-established issuers realize savings with this particular method. Overall in
this sample of Japanese IPOs, the average total issue cost, measured as a percentage of the
initial aftermarket price, was significantly higher in the book building regime than in the
auction regime. However, it was found that aggregate underpricing would have been lower
under the book building, on the basis of either the full sample, or the subsample

2. Sherman and Jagannathan (2009)

In their study Sherman and Jagannathan identify the underlying reason for the relative
unpopularity of auctions as a means of going public. This study appears to be the most
comprehensive endeavor in terms of attempting to holistically identify the reasons auctions
have not been as attractive as other means of going public.. In other words, out of more than
45 countries, we have not been able to find even one country in which auctions are currently
the dominant method. (Sherman and Jagannathan 2005, 14)
Sherman and Jagannathan delve into commonly used stereotypical explanations for why
auctions are not used. The two most common notions are (1) auctions are not used because
they are still experimental and unproven, and (2) issuers are pressured into book building due
to higher fees. Nonetheless, through international research, it was proven that even in
markets where auctions have been used for a long time, there was a decline in their use as
soon as book building or some other method became available. For the second issue, the
authors found that competition in the market would drive down prices of book building
issues. Additionally, other research has shown that fixed price offers lead to even lower
spreads, compared to auctions.
In their study Sherman and Jagannathan find that on a global scale initial returns are not the
most important aspect of the issue for the issuer. This was evident from data collected on
IPOs in Singapore, where both auctions and fixed price offers were available. In this case,
statistics revealed that the fixed price method was chosen as the dominant means of going
public, although auctions consistently provided lower underpricing.
Finally, the study also deemed whether any perceivable effect can be distinguished from
adding modern Internet technologies to enable bidding for the IPO auction. The results
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illustrate that the median return for Open IPOs is 2%, which is excellent. However, the
research points out that there are significant outliers in the group. In conclusion, Sherman and
Jagannathan find that auctions have been tried and tested in many markets, but have lost
popularity due to poor control on the part of the issuer in terms of the price and effort that are
applied. They also identify that auctions provide lower underpricing. This would imply that
issuers are not only looking to optimize underpricing, but are moreover interested in other
attributes of the issue. Without some way of screening out free-riders and the unsure
participation of serious investors, IPO auctions are too risky for both issuers and investors.

3. Kaneko and Pettway (2008)

Kaneko and Pettway attempt to provide an answer to the question Does book building
provide a better mechanism for issuing firms than auctions? Similar to Kenji and Smith
(2004), the Japanese market is used to test the assumption. The Japanese auction process uses
price discriminating auctions, instead of a fixed price or market-clearing price as in the Open
IPO process.
The empirical research in Kaneko and Pettway (2003) is broken up into three parts.
Firstly the descriptive statistics are analyzed, which demonstrate that book building had
significantly higher initial returns than auction priced IPOs. In the following part, the
auctioned priced and book built IPOs are analyzed separately through regression analysis. In
this section seven independent variables17 are tested to uncover which variables have the
most impact on underpricing. In the test of auctioned IPOs, it was found that market
volatility of daily index returns one month prior to the issue is the most significant factor
affecting underpricing. When the same regressions were run on the book built IPOs, it was
found that market change three months prior to the IPO was the most significant factor
affecting underpricing.
In the third part of Kanekos and Pettways research, regression analysis was run on both sets
of data, however controlling for the different firm specific characteristics. There, it was also
found that book built IPOs are underpriced significantly more than auction priced IPOs.

12

When the book built and auctioned priced IPOs were analyzed for effects of hot and cold
markets, it was found that book built IPOs are still much more frequently underpriced.
In conclusion, Kaneko and Pettway found that under all conditions and while controlling firm
specific characteristics, book built IPOs were much more frequently underpriced in
comparison to auctioned IPOs.

SECONDARY ISSUE
PUBLC ISSUE BY EXISTING LISTED COMPANIES
Such companies are allowed to raise fresh capital by freely pricing their further of equity
they however have to meet the entry norms of dividend payments in the immediately
preceding three years if the post issue .net worth become more then five times than pre issue
net issue. The issue price has to be determined by the issuer in the consultation with the lead
manager. The prospectus/offer document should contain the net value of the company as well
as justification for price of the issue. The low and high prices of the last two years need to be
mentioned. The company wishing to enhance their foreign shareholding up to 51% or more
as permissible under the relevant guidelines of RBI/government can make issues at the price
determined by the share holders in a special revolution.
REASONS FOR GOING TO THE PUBLIC

Raising funds to finance capital expenditure programs like expansion, diversification,

modernization, etc.

Financing of increased working capital requirements.

Financing acquisitions like a manufacturing unit, brand acquisitions, tender offers for
shares of another firm etc.

Debit financing.

Exit root for exiting investors.

1. Different kinds of issues

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Primarily, issues made by an Indian company can be classified as Public, Rights, Bonus and
Private Placement. While right issues by a listed company and public issues involve a
detailed procedure, bonus issues and private placements are relatively simpler.
The classified issues is as illustrated below:
(a) Public issue
(i) Initial Public offer (IPO)
(ii) Further public offer (FPO)
(b) Rights issue
(c) Bonus issue

Advantage of going to public

Money non-refundable except in the case of winding up or buy back of shares.

No financial burden i.e. no fixed rate of interest payable.However, in order to service

the equity, dividend may be paid.

Enhances shareholders value of the company performs well.

Greater transferability.

Training and listing of securities at stock exchanges.

Better liquidity of shares.

Enables valuation of the company.

Helps building reputation of promoters, compaany data products/services, provided

the company performs well.

Disadvantages of going to public

Dilution of ownership stake makes the company potential vulnerable for future
takeovers.

Involves substantial expenses ranging between 4% to 15% of the size of the issue.

Several legal formalities.

Transparency requirements and public disclosure of information may lead to lack of

the privacy.
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Continuous compliance of provisions of listing agreement and other legal

requirements.

Constant scrutiny of performance by investors.

May lead to takeover of company.

Securities of the company may be made subject speculative attacks.

There is no mandatory requirement of minimum promoters contribution and lock in period in

case of issues of securities by a company, which has been listed for last three track record of
dividend payment, out of preceding five years. However, promoters have disclosed the extent
of their participation in the public/right issues, differential pricing is permissible, a
justification for which must be given in the offer document. All companies are required to
convent their partly paid up shares into fully paid up or forfeit the same before making a
public/right issues.

ROLE OF SEBI-REGULATORY BODY

Up to 1992, the capital primary market was controlled by the controller of capital issue (CCI)
formed under the capital issues control act. During that period, the price of capital issues was
controlled by CCI. The premium on issue of equity shares issued through the primary
markets was done in accordance with the capital issues control act.
The CCI guidelines were abolishment with the introduction of securities & exchange board
of India (SEBI) formed under the SEBI act,1992 with the prime objective of protecting the
interest of investor in securities, promoting the development of, and regulating ,the securities
market and for matters connected their with or incidental there to.
The SEBI act came into force on 30th January ,1992 and with its establishment, all public
issues are governed by the rule & regulation issued by SEBI. SEBI was formed to promote
fair dealing in issues of securities and to ensure that the capital markets function efficiently,
transparently and economically in the better interest of both the issuers and the investors.
The promoters should be able to raise fund at relatively low cost. At the same time, investors
must be protect from unethical practices and their rights must be safeguard so that there is a
steady flow of saving into the market. There must be proper regulation and code of conduct
and fair practice by intermediaries to make them competitive professional.
15

Since its formation, SEBI has been instrumental in bringing greater transparency in capital
issues. Under the umbrella of SEBI, companies issuing shares are free to fix the premium
provided adequate discloser in made in the offer documents focus being the greater investor
protection, SEBI has become a vigilant watch dog
GUIDELINES FOR PUBLIC ISSUE

A Bridged prospectus has to be attached with every application

A Company has to highlight the risk factors in the prospectus.

Objective of the issue and cost of project should be mentioned in the prospectus

Companys management, past history and present business of

the firm should be

highlighted in the prospectus.

Particulars in regard to company and other listed companies under the same
management which made any capital issues during the last three years are to be stated
in the prospectus.

Justification for premium,in the case of premium is to be stated.

Subscription list for public issues should be kept open a minimum of three days and
maximum of 10 working days.

The collection centres should be at least 30 which include all centres With stock
exchanges.

Collection agents are not to collect application money in cash.

The quantum of issue, whether through a right or public issue, shall Not exceed the
amount specified in the prospectus. No retention of Over Subscription is permissible
under any circumstances.

A Compliance report in the prescribed form should be submitted to SEBI within

45days from the date of closure of issue.

Minimum number of shares per application has fixed at 500 shares Of face value of
Rs.100.

The allotments have to be made in multiples of tradable lot of 100 shares of Rs.10
each.
16

Issues by way of bonus, rights etc. to be made in appropriate lots to minimize odd
lots.

If minimum subscription of 90% has not been received, the entire amount is to be
refunded to investors within 120days.

The capital issue should be fully paid up within 120days.

Underwriting has been made mandatory.

Limit of listing of companies issue in the stock exchange has been increased from
Rs.3crores to Rs.5crores.

The gap between the closure dates of various issues viz. rights and public should not
exceed 30days.

Issues should make adequate disclosure regarding the terms and conditions of
redemption, security conversion and other relevant features of the new instrument so
that an investor can make reasonable determination of risks returns, safety and
liquidity of the instrument. The disclosure shall be vetted by SEBI in this regard.

REGISTER TO THE ISSUE

Registration with SEBI is mandatory for as Register and share Transfer Agent . A category I
Registrar can act as both Registrar to the issue and as a share Transfer Agent. Agent. The
minimum netwroth requirement is Rs.6 lakh for a category I Registrar and Rs.3 lakh
category II Registrar. In addition to net wroth requirement, SEBI also look at the
infrastructure facilities before giving registration.
The promoter or director of the issuer company cannot act as a registrar to the issue. If the
number of applicants is more then the issuer company can appoint more than one registrar
registered with the board, in consultation with the Lead Merchant Banker. The registrar is
solely is responsible for the management of the issue.

17

The Registrar provides administrative support to the issue process. The company enters into
an MOU with the Registrar to the Issue, which lays down the terms and conditions of
appointment. The main function of the Registrar include.

Bankers to the issue

This was one capital market activity which lacked regulatory clarity for a long time. The
ambiguity arose, because it was unclear as to whether it was RBI or SEBI which regulated
public issue banking. An anomalous situation prevailed as SEBI issued guidelines to the
banks, while it had no means to ensure compliance of the same. Though RBI had regulatory
jurisdiction over the banks, compliance with the provisions of the banking law and its own
directives took precedence over enforcement of SEBI guidelines. As a consequence,
investors suffered from a spate of irregularities involving refund orders, acceptance of late
applications after the closure of issue,etc.
The situation was set right, with the notification of SEBI (Bankers to an Issue)Rules,1994,
by bringing issue banking under the regulatory ambit of SEBI. Registration with SEBI is
mandatory for offering services as Banker to an issue. SEBI has also been given power to
suspend or cancel the registration granted, in case of violations of its regulations and
guidelines.
The enter thrust of the notification was to make the banks more accountable and give the
much needed transparency to the public issue related operations of banks.
SEBI takes into account the following factors, before granting certificate of Registration as
banker to an Issue:

The bank should have adequate infrastructure, communication and data processing
facilities.

The bank should have adequate competent manpower to effectively discharge the
obligations.

The bank is a scheduled bank.

18

The bank and its directors have not been involved in any irregularities in the SEBI.

securities market and have not been convicted for any economic offenses.

The are no restriction on the number of banker that can be associated with an issue.

Sending the cheques and drafts for collection.

Giving a daily report on the collection figures to the Registrar to the Issue.

Transferring the proceeds to the share application money account maintained by the
controlling Branch.

Underwriters to the Issue

Underwriting is an agreement whereby the underwriter promises to subscribe to a specified
number of shares or debentures or a specified amount of stock in the event of public not
subscribing to the issue.If the issue is fully subscribed,then there is no liability for the
underwriter.If a part of share issues remains unsold,the underwriter will buy the shares.Thus
underwriting is a guarantee for the marketability of shares.

ADVANTAGES OF UNDERWRITING
Underwriting assumes great significance as it offers the following advantages to the
issuing company.
1. The issuing company is relieved from risk of finding buyers for the capital.
2. The company is assured of getting the minimum subscription within the stipulated
time,a statutory obligation to be fulfilled by the issuing company.
3. Underwriters undertake the burden of highly specialized function of distributing
securities.
4. They provide expert advice with regard to timing of security issue,the pricing of
issue,the size and type of securities to be issued etc.
5. Public confidence on the issue is enhanced when underwritten is done by reputed
underwriters.
The underwriters in India may be classified into two categories:

Institutional underwriters.
19

Non-insitutional underwriters.

The institutional underwriters are (a)Life insurance Corporation of India(LIC),(b)Unit

Trust of India(UTI),(c)Industrial development Bank of India(IDBI),(d)Industrial credit and
investment corporation of India(ICICI),(e)Commercial Banks and General insurance
Companies.
The pattern of underwriting of the above institutional underwriters differ vastly in India.LIC
and UTI have purchased industrial securities from the new issue market with a view to
holding them on their own portfolio. They have a preference for underwriting shares in large
and well established firms.
The non-institutional underwriters are brokers. They guarantee shares only with a
view to earning commission from the company floating the issue. They are known to off-load
the shares later to make a profit. The brokers work with motive in underwriting industrial
securities. After the elimination of forward trading, stock exchange brokers have begun to
take an underwriting business. The percentage of securities underwritten to the total private
capital issue varities between 72% and 97%

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CHAPTER-3
COMPANY PROFILE

21

Usha kiran Finance Limited Profile

About the organization

Organization structure
Activities of Ushakiran Finance Limited

22

Profile of Ushakiran Finance Limited:

Ushakiran finance Limited was incorporated in 1995. This is a professionally managed
company Charted Accountants, company secretaries, MBAs and Cost Accountants and
Software professionals. With an infrastructure that matches with the international standards
and practices, staff support and strong network, the company efficiently caters financial
services to its diverse clientele. The Board of Directors of the company comprises eminent
and experienced professionals who have got abundant experience.
Finance & Legal, Bank and Financial Services, Business Valuation, FINANCIAL
SERVICES, Investment & Leasing Companies, Investment Company, Investments, Leasing
Company, Finance & Legal Andhra Pradesh, Bank and Financial Services Andhra Pradesh,
Business Valuation Andhra Pradesh, FINANCIAL SERVICES Andhra Pradesh, Investment
& Leasing Companies Andhra Pradesh, Investment Company Andhra Pradesh, Investments
Andhra Pradesh, Leasing Company Andhra Pradesh, Finance & Legal Hyderabad, Bank and
Financial Services Hyderabad, Business Valuation Hyderabad, FINANCIAL SERVICES
Hyderabad, Investment & Leasing Companies Hyderabad, Investment Company Hyderabad,
Investments Hyderabad, Leasing Company Hyderabad

Ushakiran finance limited is an existing profit making company. It is an integrated finance

company established essentially as a fund based financial service organization as diversified
its range of activities from fund based to non fund based activities and further stepped up
and expanded the fund activities and other financial services.
23

To crystallize these projects a financial company that understand the individual needs is
required. Thus the need for limited is it providing corporate finance or in management of
issues or in dealing with securities market.
The UFL(Ushakian finance Limited) comprises of Institutional Broking and
Corporate Finance. The Institutional broking division caters to domestic and foreign
institutional investors, while the Corporate Finance Division focuses on niche areas such as
infrastructure, telecom and media.
UFL have been providing investors a powerful online trading platform, the latest
news, research and other knowledge-based tools for over 15 years now. UFL have dedicated
teams for fundamental and technical research so that you get all the information your need to
take the right investment decisions.
UFL have a talent pool of experienced professionals specially designated to guide you
when you need assistance, which is why investing with us is bound to be a hassle-free
experience for you!

Reason why you should choose UFL

1. Experience:
UFL has more than One and half decades of trust and credibility in the Indian stock
market, it has been providing institutional-level research and broking services to individual
investors.

2. Technology:
UFL online trading account you can buy and sell shares in an instant from any PC
with an internet connection. You will get access to our powerful inline trading tools that will
help you take complete control over your investment in shares.

3. Accessibility:
24

In addition to our online and phone trading services, UFL also have a network.

4. Knowledge:
In a business where the right information at the right time can translate into direct
profit, you get access to wide range of information on our content- rich portal, you will also
get a useful set of knowledge based tools that will empower you to take informed decisions.

5. Convenience:
You can all our Dial-n-Trade number to get investment and execute your transaction.

6. Customer service
Our customer service team will assist you for any help that you need relating to
transactions, billing, demat and other queries.

7. Investment Advice:
UFL has dedicated research teams for fundamental and technical research. Our
analysts constantly track the pulse of the market and provide timely investment advice to you
in the form of daily research emails, online chat, printed reports on SMS on your phone

RESEARCH- the SCIENCE of INVESTING:

Research and in-depth knowledge of markets provide better analysis that speculations
or reactions to rumors. Our teams of dedicated analysts are therefore, constantly at work to
track performance and trends and determine and winners. Thats why all our trading
products have extremely high success rates! Our research products are tailor-made to suit all
your needs.
i.

Long-term investing

ii.

Intra-day & short-term trading

25

iii.

High-income yields

iv.

Hedging products and lots more

YOU BENEFIT FROM ONLINE TRADING:

FREEDOM FROM PAPERWORK: Integrated trading, bank and demat account (auto payin
& payout of securities) with digital contracts removes all paperworks.
INSTANT CREDIT AND TRANSFER: Instant transfer funds from bank accounts of your
choice to your KSPL trading account.
TRADE ANYWHERE: Enjoy the ease of trading from any part of the w
orld in a completely secure environment.
TIMELY ADVICE: Make informed decisions with expert advice, investment call and live
market commentary.

Activities of UFL:
Planning: It involves in planning of human resource requirements and forecasting of
personnel needs, changing values, attitudes and behavior of employees. The directors usually
undertake it.
Directing: The personnel manager coordinates the managers at various levels. The
attainment of organization goals is possible through proper directions.
Controlling: Top management does the controlling. They audit training requirements and
programmers, direct morale surveys, conduct separate interviews
Recruitment: Notifications are given in newspapers for vacancies to stimulate eligible
persons to apply for the job.
Selection: The respective managers select the candidates for their departments. The letters
for appointment or rejection are sent to the board of directors.
Placements: The directors are responsible for the placement of the employees. They may be
placed in the head office and in the branches at different places.
Training: The experienced person in the job usually trains the new recruits in the company
itself.
Promotions and Transfers: The skilled and eligible persons are promoted.
26

27

STRUCTURE OF THE ORGANISAION

UFL follows a functional organization system. It provides various services, which are
provided through different departments. They are:
Trading (System):
Deals with online trading facility through the VSAT.

Registration of clients and interaction with clients.

.Dealing with new sub brokers and making them conversant with the system.

. Provides updated information of a days trading activities.

Data Processing:

. Opening of the account after the fulfillment of various formalities.

. Shares are credited to the de-mat account by dematerializing the physical shares
and those brought from the secondary market.

. The Process of settling the selling and buying obligation takes place through the
delivery instruction slip to their respective clients.

Accounts:
The function of the accounts department is to maintain a record of all the pay-in, payout, cash received for de-mat account opening, account closing, transaction charges for
operating the account. Records of expenses incurred and incomes from business are also
maintained basing on which year after year an annual report is prepared to which the latest
data is annexed in its last chapter.

RANGE OF ACTIVITIES
The company caters mainly to the requirements of corporate clients in a variety of
activities, which include the following:

Inter Corporate Deposits

Loan Syndication
28

Project counseling and Advisory Services

Project Appraisals

Placement of Securities

Marketing of Public Issues

Equity Research and Analysis

Stock Broking

Portfolio Management Services

Company Description
Ushakiran Finance Limited provides financial services in India. It offers loans and advances,
leasing, and finance and investment services. The company is based in Hyderabad, India.
Key Executives
Mr. P R K Murthy

Director

Mr. Y B K Murthy

Director

Mr. T Adinarayana

Chairman / Chair Person

Mr. Y Visweswara Rao

Compliance Officer

29

Usha Kiran Finance Services Limited

Keywords:
Finance & Legal, Bank and Financial Services, Business Valuation, FINANCIAL
SERVICES, Investment & Leasing Companies, Investment Company, Investments, Leasing
Company, Finance & Legal Andhra Pradesh, Bank and Financial Services Andhra Pradesh,
Business Valuation Andhra Pradesh, FINANCIAL SERVICES Andhra Pradesh, Investment
& Leasing Companies Andhra Pradesh, Investment Company Andhra Pradesh, Investments
Andhra Pradesh, Leasing Company Andhra Pradesh, Finance & Legal Hyderabad, Bank and
Financial Services Hyderabad, Business Valuation Hyderabad, FINANCIAL SERVICES
Hyderabad, Investment & Leasing Companies Hyderabad, Investment Company Hyderabad,
Investments Hyderabad, Leasing Company Hyderabad

Foreign exchange services are provided by many banks and specialist foreign exchange
brokers around the world. Foreign exchange services include:

Currency exchange - where clients can purchase and sell foreign currency banknotes.

Wire transfer - where clients can send funds to international banks abroad.

Remittance - where client that are migrant workers send money back to their home

country.
Investment services

Asset management - the term usually given to describe companies which run
collective investment funds. Also refers to services provided by others, generally
registered with the Securities and Exchange Commission as Registered Investment
Advisors. Investment banking financial services focus on creating capital through
client investments.

Hedge fund management - Hedge funds often employ the services of "prime
brokerage" divisions at major investment banks to execute their trades.
30

Custody services - the safe-keeping and processing of the world's securities trades
and servicing the associated portfolios. Assets under custody in the world are
approximately US$100 trillion.[7]

Insurance
Main article: Insurance

Insurance brokerage - Insurance brokers shop for insurance (generally corporate

property and casualty insurance) on behalf of customers. Recently a number of
websites have been created to give consumers basic price comparisons for services
such as insurance, causing controversy within the industry.[8]

Insurance underwriting - Personal lines insurance underwriters actually underwrite

insurance for individuals, a service still offered primarily through agents, insurance
brokers, and stock brokers. Underwriters may also offer similar commercial lines of
coverage for businesses. Activities include insurance and annuities, life insurance,
retirement insurance, health insurance, and property & casualty insurance.

Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them

from catastrophic losses.

Other financial services

Bank cards - include both credit cards and debit cards. Bank Of America is the largest
issuer of bank cards.[citation needed]

Credit card machine services and networks - Companies which provide credit card
machine and payment networks call themselves "merchant card providers".

Intermediation or advisory services - These services involve stock brokers (private

client services) and discount brokers. Stock brokers assist investors in buying or
selling shares. Primarily internet-based companies are often referred to as discount
brokerages, although many now have branch offices to assist clients. These
brokerages primarily target individual investors. Full service and private client firms
primarily assist and execute trades for clients with large amounts of capital to invest,
such as large companies, wealthy individuals, and investment management funds.
31

Private equity - Private equity funds are typically closed-end funds, which usually
take controlling equity stakes in businesses that are either private, or taken private
once acquired. Private equity funds often use leveraged buyouts (LBOs) to acquire
the firms in which they invest. The most successful private equity funds can generate
returns significantly higher than provided by the equity markets

Venture capital is a type of private equity capital typically provided by professional,

outside investors to new, high-potential-growth companies in the interest of taking the
company to an IPO or trade sale of the business.

Angel investment - An angel investor or angel (known as a business angel or informal

investor in Europe), is an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity. A small but
increasing number of angel investors organize themselves into angel groups or angel
networks to share research and pool their investment capital.

Conglomerates - A financial services company such as a universal bank that is active

in more than one sector of the financial services market e.g. life insurance, general
insurance, health insurance, asset management, retail banking, wholesale banking,
investment banking, etc. A key rationale for the existence of such businesses is the
existence of diversification benefits that are present when different types of
businesses are aggregated i.e. bad things don't always happen at the same time. As a
consequence, economic capital for a conglomerate is usually substantially less than
economic capital is for the sum of its parts.

Financial market utilities - Organisations that are part of the infrastructure of financial
services, such as stock exchanges, clearing houses, derivative and commodity
exchanges and payment systems such as real-time gross settlement systems or
interbank networks.

Debt resolution is a consumer service that assists individuals that have too much debt
to pay off as requested, but do not want to file bankruptcy and wish to pay off their
debts owed. This debt can be accrued in various ways including but not limited to
personal loans, credit cards or in some cases merchant accounts.

32

CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION

33

LIST OF COMPANIES WHO HAVE ISSUED IPO DURING

THE RECENT PAST DATA
1. FUTURE CAPITAL HOLDINGS LIMITED
2. RELIANCE POWER LIMITED
3. J.KUMAR INFRAPROJECTS LIMITED
4. CORDS CABLE INDUSTRIES LTD
5. KNR CONSTRUCTION LIMITED
6. ONMOBILE GLOBAL LIMITED
7. BANG OVERSEAS LIMITED
8. SHRIRAM EPC LIMITED
9. IRB INFRASTRUCTURE DEVELOPERS LTD
10.TULSI EXTRUSION LTD
11.WOCKHARDT HOSPITALS LTD
12.EMAAR MGF LAND LIMITED
13.SVEC CONSTRUCTION LTD
14.GSS AMERICA INFOTECH LTD
15.V-GUARD INDUSTRIES LTD
16.RURAL ELECTRIFICATION CORPORTATION LTD
17.GAMMON INFRASTRUCTURE PROJECTS LTD

34

18.TITAGARH WAGONS LTD

19.KIRI DYES AND CHEMICALS LTD
20.AISHWARYA TELECOM LTD
21.GOKUL REFOILS AND SOLVENT LTD
22.ANUS LABORATORIES LTD
23.NIRAJ CEMENT STRUCTURALS LTD
24.SEJAL ARCHITECTURAL GLASS LTD
25.ARCHIDPLY INDUSTRIES LTD
26.FIRST WINNER INDUSTRIES LTD
27.LOTUS EYE CARE HOSPITAL LTD
28.KSK ENERGY VENTURES LTD
29.BIRLA COTSYN INDIA LTD
30.VISHAL INFORMATION TECHNOLOGIES LTD
31.NU TEK INDIA LTD
32.AUSTRAL COKE & PRODUCTS LTD
33.RESURGERE MINES & MINERALS INDIA LTD
34.20 MICRONS LTD
35.ALKALI METALS LTD

35

S.
No

Name of the Book running Date

issue
Lead Manager
Issue

FUTURE
CAPITAL
HOLDINGS
LIMITED

RELIANCE
POWER
LIMITED

Kotak Mahindra
capital company
limited, Enam
securities
private Limited,
and
UBS
Securities India
Private Limited

BRLM Kotak
Mahindra
Capital
Company
Limited,
UBS securities
India pvt ltd,
ABN
AMRO
securities
(India) pvt ltd,
Deutsche
Equities India
Private Limited,
Enam Securities
Limited, ICICI
securities
Limited,
JM
Financial
Consultants
Private Limited
J.Kumar
Co
BRLM
Infraprojects Macquarie India
Limited
Advisory
Service Private

of No
of
mem
bers

11/01/200
8
To
16/01/200
8

No
of
biddi
ng
cente
rs

Issue
size
(lakh
shares)

Price
range

Issue
price(rs)

156

59

64.228

Rs.700
To
Rs.765

765.00

208

128

2280

R.405
to
Rs.450

450.00

96

49

65

15/01/200
8
to
18/01/200
8

110
Rs110
to Rs
120

36

CORDS
CABLE
INDUSTRI
ES LTD

Limited
and 18/01/08
SBI
Capital To
Markets
23/01/08
Limited.

135.00
72

57

30.85
Rs125
to Rs
135

21/01/08
BRLM Anand To
Rathi Securities 24/01/08
Limited
5

KNR
construction
limited
ONMOBIL BRLM
E GLOBAL COLLINS
LIMITED
STEWART
INGA
PRIVATE
LIMITED
Bang
Overseas
Limited

24/01/08
To
29/01/08
24/01/08
To
29/01/08

28/01/08
BRLM
Axis To
Bank Limited
31/01/08

170
64

42

78.7457

90

48

109.005
45

110

128

Rs.170
to Rs
180
440.00
Rs.425
to Rs
450

56

207
35

Rs.200
to Rs
207

50

Rs.290
to Rs
330

48

SHRIRAM
EPC
LIMITED

300

BLRM
29/01/08
Deutsche
To
Equities India 01/02/08
Private Limited,
ICICI Securities
Limited
9
IRB
Infrasture
Developers
LTD

BRLM
Almondz
Global
Securities LTD

118

58

185
510.576
66

31/01/08
To
37

Rs.185
to Rs
220

05/02/08
10

Tulsi
Extrusions
LTD
11

BRLM Kotak
Mahindra
capital company
LTD,ICICI
Securities LTD
co.,BRLM
01/02/08
Motilal Oswal To
Investments
05/02/08
Advisers PVT
LTD

110

63

85
57

130

69

*
250.870
97

WOCKHA
RDT
HOSPITAL
S LTD

BRLM
Deutsche
Equities India
private LTD Co
BRLM Kotak
Mahindra
Capital
Company LTD

31/01/08
To
07/02/08

12

192

EMAAR
MGF
LAND
LIMITED

BRLM
Almondz
Global
Securities LTD

01/02/08
To
11/02/08

Joint
Global
Coordinates and
BRLMCitigroup
Global Markets
India
Private
LTD and Kotak
38

Rs.80
to Rs
85

Rs.225
to Rs
260

42

*
1025.70
623

Rs 530
to Rs
630

Mahindra
Capital
Company
LTD
,BRLM
ICICI
securities LTD
and SBI Capital
Markets LTD
04/02/08
To
13/02/08

13

14

15

16

17

SVEC
CONSTRU
CTION
LTD
Global
Coordinators
and
BRLM
Enam Securities
GSS
PVT LTD and
AMERICA DSP
Merrill
INFOTECH Lynch
LTD,
LTD
BRLMCity
group
Global
Markets India
PVT
LTD,
Goldman
Sachs(India)
V-GUARD
Securities PVT
INDUSTRI LTD,
HSBC
ES LTD
Securities And
Capital
Markets(India)
PVT LTD, J.P.
RURAL
Morgan India
ELECTRIFI PVT
LTD,
CATION
Kotak Mahindra
CORPORT Capital LTD
ATION LTD Karvy Investor
Securities LTD

118

50
40

146

105

Rs.90
to Rs
105

48

10/03/08
To
13/03/08

167.00

165.5
Rs.167
to Rs
200
95

39

Rs.80
to Rs
85

57

1561.2

95

GAMMON
INFRASTR

82.00

80
144

Rs.400
to Rs
440

60

19/02/08
To
22/02/08

18

400
34.9749
5

120

Rs.80
to Rs
90

60

11/02/08
To
15/02/08

18/02/08
To
21/02/08

48

30

UCTURE
PROJECTS
LTD

19

Karvy Investor
Securities LTD 11/03/08
and
Centrum To
Capital LTD
14/03/08

Sita Shree
Food
Products
BRLM
LTD
RELIGARE
SECURITIES
LTD
and 24/03/08
EDELWEISS
To
CAPITAL LTD 27/03/08

20
TITAGARH
WAGONS
LTD

23

24

IL&FS Invests
mart Securities 15/04/08
KIRI DYES LTD,
ICICI To
AND
Securities LTD 17/04/08
CHEMICA & SBI Capital
LS LTD
Market LTD

AISHWAR
YA
TELECOM
LTD

GOKUL
REFOILS
AND
SOLVENT

141

50

141

53

139

64

165

52

08/05/08
To
13/05/08
BRLM IDFCSSKI Pvt Ltd
And Macquarie 12/05/08
India Advisory To
Services Pvt Ltd 15/05/08
Co
BRLM
Collins Stewart
Inga Pvt Ltd
40

540.00

23.8376
8

Anand
Rathi
Financial
25/03/08
Services LTD
To
02/04/08

21

22

(.)Equit
y shares Rs.27
aggrega to Rs
ting Rs. 30
315
millions

119

52

72

59

Rs.540
to Rs
610
150.00

37.5

Rs.125
to Rs 35
150

40

Rs.32
to Rs 195.00
35

71.5839
2

Rs.175 210
to Rs
195

190.00
38.2

Rs.200
to Rs
210

LTD

26/05/08
To
30/05/08

25
ANUS
LABORAT
ORIES LTD

26

27

NIRAJ
CEMENT
STRUCTU
RALS LTD
SEJAL
ARCHITEC
TURAL
GLASS
LTD

29

LOTUS

115.00
32.5

Rs.175
to Rs
190

91.9415
5

Rs.105
to Rs
115
74.00

09/06/08
To
12/06/08

BRLM KOTAK
MAHINDHRA
CAPITAL
11/06/08
COMPANY
To
LTD Co BRLM 17/06/08
JM
Financial
Consultant PVT
LTD

105

56

121

48
66.1572

Rs.70
125.00
to Rs
80

09/06/08
To
17/06/08

ARCHIDPL
Y
INDUSTRI
ES LTD

FIRST
WINNER
INDUSTRI
ES LTD

58

BRLMKeynote
Corporate
Services Ltd

CENTRUM
CAPITAL
LIMITED
28

80

61

SREI
Capital 12/06/08
Market
LTD To
and Sobhagya 20/06/08
Capital Options
Limited
131
Anand
Rathi
Financial
23/06/08
Services LTD To
and
Intensive 25/06/08
Fiscal Services
41

55

Rs.115
to Rs 38.00
125

100

Rs.36
to Rs
38
240.00

48

60

EYE CARE PVT LTD

HOSPITAL
LTD

346.11
Rs.240
to Rs
255

Almondz
Global
Securities
Limited

30
KSK
ENERGY
VENTURE
S LTD

85

60

30/06/08
To
Allbank 09/07/08
Financial
Limited

100

49

(.) No
of
Rs.12
Equity
to Rs
Shares
14
aggrega
ting to
Rs.
10,753
Lakhs
150.00
excludi
ng
promote
r
Contrib
ution of
Rs.3665
lacs

128

56

Rs.140
to Rs 192.00
150

Saffron Capital
Advisors PVT
LTD
31
BIRLA
COTSYN
INDIA LTD

32

33

21/07/08
To
24/07/08
Motilal
Oswal
Investment
Advisors PVT
LTD

Almondz
VISHAL
Global
INFORMAT Securities
ION
Limited
TECHNOL
OGIES LTD

14

27.9
29/07/08
To
01/08/08
83

65

196.00
45

42

Rs.170
to Rs
192

07/08/08
To
13/08/08

34

Brlm Keynote
NU
TEK Corporate
INDIA LTD Services LTD,
CoBrlm Canara
Bank- Merchant
Banking
Division

41

50
72.6

Rs.164
to Rs 270.00
196

11/08/08
To
13/08/08
35

36

AUSTRAL
COKE
&
PRODUCT
S LTD
Brlm
Kotak
Mahindra
Capital
Company
Limited, IDFCSSKI Pvt Ltd,
Morgan Stanley
India Company
RESURGE Pvt
Ltd,
RE MINES Lehman
&
Brothers
MINERALS Securities
INDIA LTD Private Limited
And Edelweiss
Capital Limited,
CoBrlm
Axis
Bank Limited
20
MICRONS
LTD

ALKALI
METALS
LTD

46

08/09/08
To
11/09/08

0710/08
To
15/10/08

58

55.00

44.5
51

34

103.00

43.5063
2

25.5

Brlm
ALLBANK
FINANCE
LIMITED,
CoBrlm
SAFFRON
CAPITAL
ADVISORS
43

Rs.263
to Rs
272

Rs.50
to Rs
55

Rs.86
to Rs
103

PRIVATE
LIMITED,
NEXGEN
CAPITAL
LIMITED and
CHARTERED
CAPITAL AND
INVESTMENT
LIMITED

Brlm Keynote
Corporate
Services
and
IDBI
Capital
Market Services
Limited

Brlm
INDIA
INFOLINE
LIMITED and
SPA
MERCHANT
BANKERS
LIMITED

Brlm Allbank
Finance Limited
co Brlm PL
Capital Market
Private Limited,
Saffron Capital
Advisors
44

Private Limited
and
Elara
Capital (India)
Private Limited

Brlm
Motilal
Oswal
Investment
Advisors
Pvt
Ltd Co Brlm PL
Capital Markets
Pvt Ltd and
Ashika Capital

KEYNOTE
CORPORATE
SERVICES
LTD

SAFFRON
CAPITAL
ADVISORS
PRIVATE
LIMITED.

45

TABLE-1
Name of the issue

: RESURGERE MINES &MINERALS

INDIA LTD

Lead Manager

: Brlm Motilal Oswal Investment Advisors

Pvt Ltd Co Brlm PL Capital Markets
Pvt Ltd and Ashika Capital Ltd

Date of Issue
No of Members
No of Bidding Centers
Issue Size
Price Range
Issue Price

: 11/08/08 To 13/08/08
: 41
: 50
: 44.5
: Rs 263 to Rs 272
: 270

DATE

SHARE VALUE

07/11/08

70.05

14/11/08

70.10

21/11/08

55.45

28/11/08

51.25

08/12/08

58.63

16/12/08

62.03

24/12/08

62.51

31/12/08

66.10

RESURGERE MINES & MINERALS INDIA LTD

46

ANALYSIS:
The share value on 07/11/08 was 70.05 and then decreased to 55.45 on 21/11/08
.The value again increased to 58.63 on 8/12/08 and then increased to 62.51 0n 24/12/08
And on 31/12/08 the value of the share is 66.10
INTERPRETATION:
Since the company is listed for the first time and if there is no demand then automatically the
value of share would decrease.By this we can analyse that the share price was reducing as
there was no demand.

TABLE-2
Name of the issue

: ALKALI METALS LIMITED

47

Lead Manager

: SAFFRON CAPITAL ADVISORS

PRIVATE LIMITED

Date of Issue

: 07/10/2008 TO 15/10/2008

No of Members

: 51

No of Bidding Centers

: 34

Issue Size

: 25.5

Price Range

: Rs 86 to Rs 103

Issue Price

: 103

TIME PERIOD

SHARE VALUE
193.95
150.06
178.45
156.27
135.73
130..10
139.03
129.95

07/11/08
14/11/08
21/11/08
28/11/08
08/12/08
16/12/08
24/12/08
31/12/08

ALKALI METALS LIMITED

48

ANALYSIS:
The share value as on 7/11/08 was 193.95 and later decreased to 150.06 on 14/12/08
It again increased to 178.45 on 21/11/08 ,and on 28/11/08 the value of the share was 156.47
The share value started decreasing gradually to 129.95 i.e on 31/12/08
INTERPRETATION:
From the above anslysis it is clearly known that the value of the share is reducing as the time
passed because there is no demand for it in the marke and hence the value of the shares were
gradually decreasing

TABLE-3
Name of the issue

: 20 MICRONS LIMITED

Lead Manager

: KEYNOTE CORPORATE SERVICES

49

LIMITED
Date of Issue

: 08/09/2008 To 11/09/2008

No of Members

: 46

No of Bidding Center

: 58

Issue Size

: 43.50632

Price Range

: Rs 50 to Rs 55

Issue Price

: 55.00
TIME PERIOD

SHARE VALUE
20.70
18.65
16.43
17.01
16.86
19.48
15.32
15.65

07/11/08
14/11/08
21/11/08
28/11/08
08/12/08
16/12/08
24/12/08
31/12/08

20 MICRONS LIMITED
ANALYSIS:

25

.The share value of 20.70 on 7/11/08 has ben reduced to 18.65 on 14/11/08 and again reduced
20
to16.43 on 21/11/08
The value of the share has been decreased to certain extent but then inceased to19.48 on
15
16/12/08
S e rie s 1
It has again reduced to 15.65 0n 31/12/08
sharepic

10

5
INTERPRETATION:
0
The above shows
that the value of the shares were decreasing because of the reason that the
company has been lised for the first time and also since there is no demand for it the value of
the shares was also decreasing

TABLE-4
Name of the issue

: NU TEK INDIA LIMITED

50

Lead Manager

: Brlm INDIA INFOLINE LIMITED and

SPA MERCHANT BANKERS LIMITED

Date of Issue

: 29/07/2008 To 01/08/08

No of Members

: 128

No of Bidding Centers

: 56

Issue Size

: 45

Price Range

: Rs 170 to Rs 192

Issue Price

: 192.00

TIME PERIOD

SHARE VALUE
51.35
62.87
48.06
42.71
49.46
50.04
50.54
48.10

70/11/08
14/11/08
21/11/08
28/11/08
08/12/08
16/12/08
24/12/08
31/12/08

NU TEK INDIA LIMITED

70
60
50
40

S e rie s 1

sharepic

30
20
10
0

51

ANALYSIS:
The value of share as on 7/11/08 was 51.35 and increased to 62.87 on 14/11/08
The value decreased to48.06 on 21/11/08 and the value as on 28/11/08 was 42..71 an the
gradually decreased to 48.10 on 31/12/08
INTERPRETATION:
Since the company is listed for the first time and if there is no demand then automatically the
value of share would decrease.By this we can analyse that the share price was reducing as
there was no demand.

TABLE-5

Name of the issue

: AUSTRAL COKE & PROJECTS

LIMITED

Lead Manager

: Brlm Allbank Finance Limited Co

Brlm PL Capital Markets Private Limited,
52

Date of Issue

: 07/08/2008 To 13/08/2008

No of Members

: 83

No of Bidding Centers

: 65

Issue Size

: 72.6

Price Range

: Rs 164 to Rs 196

Issue Price

: 196.00

TIME PERIOD

SHARE VALUE
87.65
98.02
97
101.62
103.41
113.13
108.37
107

07/11/08
14/11/08
21/11/08
28/11/08
08/12/08
16/12/08
24/12/08
31/12/08

AUSTRAL COKE & PROJECTS LIMITED

120
100
80

sharepic

60

S e rie s 1

40
20
0

53

ANALYSIS:
The share value as on 7/11/08 was 87.65 and increased to 98.02 on 14/1108
The share value on 21/11/08 was 97 and later increased to 103.41 and then gradually
increasing
The value has reached to 107 on 31/12/08
INTERPRETATION:
By the above graph we can analyse that the share value is increasing since the demand for the
firm is more the value of the share is also increasing.If there is more demand then
automatically the value of the shares would increase

CHAPTER-5
54

FINDINGS,
AND
SUGGESTION

FINDINGS
According to my study the investment done in the securities by the investors is
mainly done only by the image of the company but not on the basis of the
fundamental analysis.
EPS is the money that is left over after a company pays all of its debt so, higher
the EPS the better it is.

55

 A low P/E is generally considered good because it may mean that the stock price
has not risen to reflect its earning power. A high P/E, on the other may reflect an
overpriced stock or decreasing earnings.
A Beta of 1 indicates that the Securitys price will move with the market. A Beta
of less than 1 means that security will be less volatile than the market. A Beta of
greater than 1indicates that the security price will be more volatile than the
market.
According to my study most probably, listing price is more compare to allotment
price.
According to my study, compare to year 2011 (61) and 2012 (85), in this year
there are more IPO listed in the year 2013 (110).

56

SUGGESTIONS
1.According to my study the investment done in the securities by the investors is mainly
done only by the image of the company but not on the basis of the fundamental analysis.
2.EPS is the money that is left over after a company pays all of its debt so, higher the
EPS the better it is.
3.A low P/E is generally considered good because it may mean that the stock price has not
risen to reflect its earning power. A high P/E, on the other may reflect an overpriced stock or
decreasing earnings.
4. Primary market is more volatile than the secondary market because all the companies are
listed for the first time in the market so nothing can be said about its performance
5.A Beta of 1 indicates that the Securitys price will move with the market. A Beta of less
than 1 means that security will be less volatile than the market.
6.And most probably, listing price is more compare to allotment price.

57

CONCLUSION

58

CONCLUSION
By no means are we suggesting that all IPOs should be avoided. some investors who
have bought stock at the IPO price have been rewarded handsomely by the companies in
question. Every month successful companies go public, but it is difficult to sift through the
riffraff and find the investments with the most potential. Just keep in mind that when it
comes to dealing with the IPO market, a skeptical and informed investor is likely to perform
much better than one who is not.
National Bureau of Economic Research
By Ivo Welch
We review the theory and evidence on IPO activity, why firms go public, why they reward
first-day investors with considerable under pricing and how IPOs perform in the long run.
First, we believe that many IPO phenomenon is not stationary.
Second, we believe the research into share allocation issues is the most promising area of
research in IPOs at the moment
Third, we argue that asymmetric information is not the primary driver of many IPO
phenomenon. Instead, we believe that the future progress in the literature will come from
non-rational and agency conflict explanations.

59

SUMMARY

60

SUMMARY
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, on a securities exchange,
for the first time. Through this process, a private company transforms into a public company.
Initial public offerings are used by companies to raise expansion capital, to possibly monetize
the investments of early private investors, and to become publicly traded enterprises. A
company selling shares is never required to repay the capital to its public investors. After the
IPO, when shares trade freely in the open market, money passes between public investors.
Although an IPO offers many advantages, there are also significant disadvantages, chief
among these the costs associated with the process and the requirement to disclose certain
information that could prove helpful to competitors, or create difficulties with vendors.
Details of the proposed offering are disclosed to potential purchasers in the form of a
lengthy document known as a prospectus. Most companies undertake an IPO with the
assistance of an investment banking firm acting in the capacity of an underwriter.
Underwriters provide several services, including help with correctly assessing the value of
shares (share price), and establishing a public market for shares (initial sale). Alternative
methods such as the auction have also been explored. In terms of size and public
participation, the most notable example of this method is the Google IPO. China has recently
emerged as a major IPO market, with several of the largest IPOs taking place in that country.
When a company lists its securities on a public exchange, the money paid by the
investing public for the newly issued shares goes directly to the company (primary offering)
as well as to any early private investors who opt to sell all or a portion of their holdings
(secondary offering) as part of the larger IPO. An IPO, therefore, allows a company to tap
into a wide pool of potential investors to provide itself with capital for future growth,
repayment of debt, or working capital. A company selling common shares is never required
to repay the capital to its public investors. Those investors must endure the unpredictable
nature of the open market to price and trade their shares. After the IPO,

61

BIBLIOGRAPHY

62

BIBLIOGRAPHY:
JOURNALS
V. K. Balla Financial Investment
Charles.P.Jones, 2010, Investments: Analysis and Management, John Wiley & Sons,
Inc. 9th Ed.
Francis. J.C. & Taylor, R.W., 2010, Theory and Problems of Investments. Schaums
Outline Series, McGraw Hill
Prasanna Chandra, 2010, Investment Analysis and Portfolio Management, TMH, 3rd
Ed.

S.No
Name of the Book
1
Financial Management
2
International Financial Management
3
Financial Management
4

Name of the Author

Khan & Jain
Jeff Madura
I.M.Pandey

S.No
WEBSITES
1
www.ushakiran.com
2
www.capitalindia.com
3
www.investment.com

63

Edition
6th
11th
9th

year
2002
2006
2005