Securities and Exchange Commission (Public Issue) Rules, 2006

Requirements For Furnishing Application To The SEC For The Issue Of Capital
Through Public Offering:-
A prospective issuer should apply to the SEC for issuing IPO along with the following
documents:-
(1) Ten copies of the prospectus signed by the issuer’s CEO, CFO and Issue Manager.
(2) If there is any amendment to the prospectus.
(3) The issuer shall supply all stock exchanges one copy of the prospectus.
(4) The audited financial statements (not older than 120 days) of the issuer must be submitted to
the commission.

Contents To Be Included In The Prospectus:-

(1) On the front cover page of the prospectus, name of the issuer Company; amount and type of
securities being issued, offering price of the securities, names and addresses of the underwriter,
issue date of the prospectus etc. are to be given.
(2) A detailed table of contents showing the various sections or subdivisions of the prospectus.
(3) All risk factors and management’s perception about the same are to be clearly stated which
may include interest rate risks, exchange rate risks etc.

(4) The prospectus shall show how the net proceeds of the offering shall be used, indicating the
amount to be used for each purpose.
(5) Description of Business: Here the date of incorporation and the date on which it commenced
operations and the nature of the business, the principal products or services of the company and
the markets for such products or services are mentioned.
(6) The prospectus shall contain some information in respect of plants and property, like
location of plants, whether the property is owned by the company or taken on lease etc.
(7) (a) If the issuer has not started its commercial operation, the company’s projected financial
statements up to the year of commercial operation shall be furnished in the prospectus.

(b) If the issuer had already started operation, revenue from operation from each of the last
three years, the issuer’s financial position, changes in financial position and results of operations
for each of the last three years shall be given in the prospectus which shall include:-
(1) Internal and external sources of cash.
(2) Any commitments for capital expenditure and expected sources of funds.
(3) Causes for any material changes from period to period in income, cost of goods sold, other
operating expenses and net income.
(4) Any loan taken by the issuer from its holding/parent company or subsidiary company.
(5) Any VAT, income tax, customs duty or other tax liability which is yet to be paid.
(7) Break down of all expenses connected with the public issue showing specifically: - (i) fee of
issue manager; and (ii) fee of underwriter.
 Securities and Exchange Commission (Public Issue) Rules, 2006

(8) Name, age, qualification, experience and position of each of the directors, date on which the
director first became a director and the date of his expiration and position, educational
qualification, date of joining, experience of the CEO, CFO.
(9) Involvement of Directors and Officers in Certain Legal Proceedings:
(a) Any bankruptcy petition filed by or against any officer or director of the issuer company.
(b) Any conviction of director, officer in a criminal proceeding.
(c) Any order, judgment or decree against any director, officer.
(10) The prospectus shall contain information about the total amount of salary paid to directors
and officers in the last accounting year.

(11)If any kinds of Options are granted to Directors, Officers and Employees, then information
related to date on which the option was granted, exercise price of the option, the number of stock
covered by the option, market price of the stock, expiration date of the option etc shall be given
(12) Tangible asset backing per unit of the securities should be referred to in the prospectus.
(13) (a) The prospectus shall disclose, in tabular form, the name and address of any person who
owns 5% or more of the securities, and the percentage of the securities represented by such
ownership.
(b) There shall also be a table in the prospectus showing the number of shares owned by
each director, each of the top ten salaried officers, and all other officers.
(14) If the issue price of the ordinary share is higher than the par value, justification of the
premium should be stated with reference to- (i) NAV (ii) projected EPS (iii) average market
price per share of similar stock for the last six months

(16) The prospectus shall describe the terms and conditions of any debt securities that the issuer
may have issued or is planning to issue within six months

(17) The financial statements prepared and audited according toe Securities and Exchange
Rules, 1987. The issuer shall also include comparative income statements and balance sheet
immediate preceding five accounting years in the prospectus.
Securities and Exchange Commission (Public Issue) Rules, 2006