A Project Report On

Comparison of Initial Public Offer In Infrastructure sector

At Premium Brokers

By Soniya Agarwal MBA III

Project Guide Mr. Vaishyampayam

In partial fulfillment of the requirement of the

Two year Full time PGDM program of the

SMVIM (St Miras Vishwakarma Institute of Management) Pune

AY: 2007-2008

Acknowledgement
I feel it my profound privilege to express my most sincere gratitude and indebtedness to Mr. Pritam Lunawat, Partner, Premium Brokers, Pune, who has been instrumental in providing me direction, constant encouragement and cooperation in an attempt to take this project to a logical conclusion and understand the deep insights of the business & also for providing me an opportunity to undergo summer training at their reputed organization and helping me during all the stage of the project. I sincerely express my thanks to Ms. Suvarna Dodke who gave me a lot of good information about the back office support system and provided me with all the resources whenever required. I am also thankful to Mr Hitesh Thakkar, Dealer, Premium Brokers who has been given me such a knowledgeable and valuable things in Stock market and for his constant support. I am also very much grateful to all the employees of the Premium Brokers for their kind & hearty cooperation. Without their help and encouragement throughout the tenure I would not have reached the end of the project. I am also thankful to Mr. Rahul Deshpande, Employee, Kotak Securities Limited, East Street, who answered all my doubts regarding the Initial Public Offers without which it was difficult for me to carry out my project work. Finally I express my sincere gratitude to Mr Vaishyampayam, Project guide, VIM for giving me support throughout the project report.

Index
S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Contents Executive summary Company Profile Objectives of the study Research Methodology Project work undertaken Initial Public Offer Details of the Companies Findings & Analysis Observations & Conclusions Bibliography Page No. 04 05 10 11 12 13 19 26 42 43

Chapter-I: Executive summary

I undertook my summer project in Premium Brokers, Pune, which is a stock broking firm. I was given a lot of opportunity to learn. The topic of my project is Comparison of Initial Public Offer in Infrastructure Sector. Firstly I have explained the Initial Public Offer, the preparatory work involved by the company which wants to come up with an Initial Public Offer. The Indian capital market is growing and also the Indian IPO market which is the eighth largest in the world. The infrastructure sector in India which is gaining more and more importance and it is a booming sector in the country. As it is an increasing sector the companies in infrastructure sector is selected and its details are given. These companies are DLF Limited, Housing Development & Infrastructure Limited and Omaxe Limited. These companies came with an IPO during the tenure of my internship. I studied the companies in detail and the issue. The issue includes the price band, the dates opening and closing, minimum number of shares and its multiples, the size of the issue, lead managers, etc. Then the basis of allotment of all the three companies was studied, in which I have analyzed which category was allotted how many shares. It also includes the table and the charts which makes it easy to understand. Then the companies stock performance was studied basically the price and the volume traded. This was from the period 1st July 2007 to 30th September 2007, three months stock performance of the three companies. Finally after analyzing the above I gave the conclusion regarding the three companies.

Chapter- II: Company Profile

PREMIUM BROKERS History
Established in 2005 by a group of Finance experts, Premium Brokers is a diversified financial services firm dealing in Share broking, Investment consulting, Real Estates, Training and allied services.

Team
The core team consists of experts in Finance domain with rich experience in capital markets and real estates. Pritam Lunawat Gautam Lunawat Prasad Kalbande Dhiren Shah Nahid

Core Competency
Customized services and investment advice to achieve your financial objectives.

Infrastructure
Strategically located office with state of the art facilities required for stock trading, training and other services. Special HNI desks for trading.

Alliances
Alliance with Kotak Securities for providing the backbone setup for stock broking.

Business Concept
Provide customized business advisory and training services to the investors for creating and growing their wealth by offering diversified investment options like equity, real estates, bullions and other financial products. Work on a long term investment strategy so as to nullify all the volatility of the markets and give a continuous and steady return.

Services Offered
1. Stock Trading 2. Insurance 3. Training 4. Real Estate and allied services 5. Business Development

1. Stock Trading
Services Offered Equity Derivatives Initial Public Offer Mutual Funds Depository Services Commodities

2. Insurance
Premium Brokers has tied up with HDFC Standard Life and Prudential ICICI for General & Life Insurance. 6

Services Offered Study and analyze the risk exposure and recommend insurance cover Review current policies and offer recommendations for changing the terms of insurance cover to suit clients exposure / requirements Ensure timely payment of the premiums and timely renewals Maintain records of the Clients' insurance portfolio and review the same from time to time In the event of claims, provide assistance in presentation and follow-up of claims

3. Training
Need for training in Capital Markets Indias Population 110 crores Investors in capital markets only 6 to 8% Seeing this huge ignorance towards the Capital Markets and Financial investments, we feel that it is compulsory for the new breed of investors to learn and enter the Capital market for better understanding and good investment decision making. Compared to the returns in investment options like banks, Govt. bonds and FDs, the Capital Markets provide great growth prospects and opportunities for investors to make good returns with limited calculated risk. This can be achieved only with proper training and education.

Who can attend Businessmen, Entrepreneurs, non-finance executives, self employed, house wives, students pursuing management and professional courses and persons interested in pursuing a career in capital market. Courses Offered Basic Module Advanced Module Professional Module Technical Analysis

Faculty Classes are conducted by experienced professionals in the capital market Pedagogy To make the classroom sessions interactive, effective and informative case studies, class discussions, assignments, presentations, etc. are used.

4. Real Estate and Allied services

We serve as a one-stop shop for those looking to own, occupy, invest, lease or sell property. We cater to a wide array of real estate needs across all segments in the real estate industry including NRIs and clients from India and overseas. Services Offered Brokerage Services Advice on investments in property, with lucrative, fixed and safe returns Investment consultancy Property Portfolio Management Services

Property Portfolio Management Commercial Property Management Residential Property Management Property maintenance Tenancy management Lease negotiations and approval Disposition strategies / sale administration Legal advisory services on real estate transactions

5. Business Development
Strategic Business Planning Who can benefit Industrialist /Entrepreneur MD / President / CEO of companies Business Unit Head Management student ( MBA )

Chapter-III: Objectives of the study

The study the concept of Initial Public Offer (IPO). To study the procedure for IPOs. To study the IPOs of in infrastructure sector the DLF Limited, Housing Development and Infrastructure Limited and Omaxe Limited on the basis of issue, allotment and performance.

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Chapter-IV: Research Methodology

Selection of the topic The topic Comparison of Initial Public Offers in

infrastructure sector is selected as the infrastructure sector is in boom and the stock market is performing well. Also I was allotted the responsibility of IPOs in the organization I selected this topic. These companies were selected as they came up with an IPO during the tenure of the summer project.

Objective The objective is to study the IPOs of the companies in infrastructure sector
such as DLF Limited, Housing Development & Infrastructure Limited and Omaxe Limited on the basis of issue, allotment and performance.

Data Source The source of data is secondary. The secondary data used herein is
obtained from websites.

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Chapter-V: Project work undertaken

The project was carried out in Premium Brokers, Pune. The title of the project is Comparison of Initial Public Offer in Infrastructure sector. Mr. Pritam Lunawat, Partner, Premium Brokers was very helpful and understanding. He helped me to learn how a stock broking firm actually works. The project work undertaken was that of Position & Rotation. At the beginning of the tenure I was in back office where Ms. Suvarna Dodke, Employee, Premium Brokers, taught me how the Kotak back office support system works. It consists of holdings, ledgers, client account opening, shares payin and payout, etc. I also filled the account opening forms. Later on I was given the responsibility of the Initial Public Offers. I studied the Initial Public Offers and called the clients to invest in the IPOs. As they agreed for the investment forms were sent to them. I filled the IPO forms and those were sent to Kotak Securities Limited, East Street. I also viewed the stock market where in Mr. Hitesh Thakkar, Dealer, Premium Brokers, taught me how an order entry is made if a particular stock is to be bought or sold, the pending orders, market watch, trades, etc. through the function keys. This helped me to keep a record of the performance of the companies which came up with IPOs. This project helped me to gain a lot of practical knowledge and it was a good experience working with Premium Brokers, Pune.

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Chapter-VI: Initial Public Offer

Introduction
Initial Public Offer (IPO) refers to the offering of stock in a company to the public through a public market. When a company sells stock to the public for the first time it is called an initial public offer. Stock is sold in the primary market at an offer price determined by the IPO team. Following the financing, the shares are traded in the secondary market. Selling stock in the primary market is assisted with investment bankers or underwriters that help promote the potential offering. Investors purchasing stock in IPOs generally must be prepared to accept very large risks for the possibility of large gains.

Meaning
An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company. A corporate may raise capital in the primary market by way of an initial public offer, rights issue or private placement.

Why does a company go public?

For the majority of firms going public, they need additional capital to execute long-range business models, increase brand name and utilize funds for possible acquisitions. This is typical of todays Internet and technology offerings. By converting to corporate status, a company can always dip back into the market and offer additional shares through a secondary offering.

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Preparatory work involved by the company for an IPO:

1. Getting ready A company that is thinking about going public should start preparing detailed financial results on a regular basis, and developing a business plan if they do not already have one, as much as two years in advance of the desired IPO. Soon thereafter, it needs to put its IPO team together, consisting of the lead investment bank, an accountant, and a law firm. The IPO process officially begins with what is typically called an "all-hands" meeting. At this meeting, which usually takes place six to eight weeks before a company officially registers with the Securities and Exchange Commission, all the members of the IPO team plan a timetable for going public and assign certain duties to each member. 2. The prospectus The most important and time-consuming task facing the IPO team is the development of the prospectus, a business document that basically serves as a brochure for the company. The prospectus includes all financial data for a company for the past five years, information on the management team, and a description of a company's target market, competitors, and growth strategy. 3. The road show The next step in the IPO process is known as the road show. The road show usually lasts a week or two, with company management meeting with prospective investors to present their business plan. Once the road show ends and the final prospectus is printed and distributed to investors, company management meets with their investment bank to choose the final offering price and size. Investment banks try to suggest an appropriate price based on expected demand for the deal and other market conditions. The pricing of

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an IPO is a balancing act. Investment firms have two sets of clients - the company going public, which wants to raise as much money as possible, and the investors buying the shares, who expect to see some immediate appreciation in their investment. If interest in an IPO is weak, the number of shares in the offering or their price may be cut from the expected ranges. If it is strong, the offering price or size can also be raised from initial expectations. A company can also postpone an offering because of insufficient demand. 4. Beginning trading Once the offering price has been agreed on, and at least two days after potential investors receive the final prospectus, an IPO is declared effective. This is usually done after a market closes, with trading in the new stock starting the next day as the lead underwriter works to confirm its buy orders. The lead underwriter is primarily responsible for ensuring smooth trading in a company's stock during those first few crucial days. This could mean supporting the price of a newly issued stock by buying shares in the market, or by selling them short (which means selling shares it doesn't have in its account).

Procedures
A] Issuers Issuers desirous of using NSE's online IPO system are required to comply with the following procedures: 1. Submit a written request as per prescribed format (Letter1, Letter2, BRLM) for usage of electronic facilities and software of NSE 2. Give details regarding Book Running Lead Manager, Co Book Running Lead Managers and Syndicate Members. 3. Pay the requisite charges to NSE.

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B] Trading Members The Book Running Lead Manager will give the list of trading members who are eligible to participate in the Book Building process to the Exchange. Members have to submit a one time undertaking to the Exchange. Eligible trading members have to give in the prescribed format details of the user IDs that they would like to use. C] Subscribers Subscribers can approach any of the approved trading members for submitting bids in the NEAT IPO system. On line transaction registration slip are generated automatically after entering the bids in to the system which acts as proof of the registration of each Bid option.

Indian IPO market

India is world's 8th largest IPO market India's initial public offering (IPO) market emerged as the eighth largest in the world, with $7.23 billion (Rs 30,000 crore) in net proceeds through 78 public issues, as against $ 246 billion raised globally in 2006, consultancy firm Ernst & Young said in its Global IPO report. Because of the two mega issues from Reliance Petroleum of $1.83 billion and Cairn Energy of $1.3 billion, energy companies dominated with more than 50% share of the fund raised in 2006. In 2007, the report said, Indian IPOs continue to surge in numbers, particularly in energy and real estate sectors. Globally, $ 246 billion was raised through 1,729 IPOs in 2006 as against $ 167 billion in 2005. Greater China's IPO markets soared to an all time high with $56.6 billion through 175 offerings in 2006. Industrial and Commercial Bank of Chinas IPO of $ 21.9 billion

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was the biggest issue during the year. The second largest IPO was also from a Chinese bank at $ 11 billion. China was followed by US companies with total proceeds of $ 34.1 billion. Third highest proceeds were raised by Russian companies at $ 18.1 billion. US launched the highest number of IPOs with 187 listings, followed by Japan with 185 and China with 175 listings. Emerging markets remained the favorite for investors. The total amount raised by companies in BRIC (Brazil, Russia, India and China) in 2006 increased to $ 86 billion from $ 29 billion in 2005. The number of listings has also almost doubled to 279. Reflecting the rise of more world class financial centers, a shift has been taken place. In 2006, highest capital of $46.1 billion was raised in Hong Kong Stock Exchange (HKSE), amounting to 19% of the total proceeds raised in the global markets. London Stock Exchange followed with 13.5% of the proceeds and NYSE ranked third with only 10% of the total fund raised during the year. E&Y analyst R Balachander said that the rapid growth in emerging market economies has resulted in a migration of capital from development economies into the emerging markets. He said that the corporate sector is on a growth trajectory which has significantly increased their needs for capital. According to the study, India's increasing number of larger deals has been driven by the growth of Indian corporations and their need for additional capital for potential acquisitions. Balachander said India's latest and strongest capital raising trend include localization and qualified institutional placements. The report said that RPL with an IPO of $1.8 billion and Cairn Energy with $ 1.3 billion listed in the domestic market.

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Qualified institutional placement has also become very popular in the Indian market as it provides the Indian companies opportunities to access the global market. Balachander said that QIP placements is a two-way opportunity, for local businesses to gain access to global funds without having to list abroad and for foreign investors to invest in Indian companies. He said that foreign institutional investors make up three-fourth of new capital flowing into the market.

Indian Infrastructure sector

Historically, the real estate sector in India was unorganized and characterized by various factors that impeded organized dealing, such as the absence of a centralized title registry providing title guarantee, lack of uniformity in local laws and their application, non-availability of bank financing, high interest rates and transfer taxes, and the lack of transparency in transaction values. In recent years however, the real estate sector in India has exhibited towards greater organization and transparency, accompanied by various regulatory reforms, which has stimulated demand for land and developed real estate across our business lines. Demand for residential, commercial and retail real estate is rising throughout India, accompanied by increased demand for hotel accommodation and improved infrastructure. Additionally, the tax and other benefits applicable to SEZs are expected to result in a new source of real estate demand.

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Chapter- VII: Details of the Companies

A] DLF Limited
DLF Ltd. is the largest real estate development company in India in terms of the area of their completed residential and commercial developments. Since 1946, DLF has approximately 224 mln sqft, including 22 urban colonies as well as an entire integrated 3,000 acre township DLF City. DLFs key competitive advantage is its ability to build a sizable and quality land bank that it can strategically develop to generate high returns. Their reputation attracts multinational clients seeking to occupy multiple locations. The company was incorporated in July 1963 as American Universal Electric (India) Limited and got renamed as DLF Limited in May 1981. The operations of the company span all aspects of real estate development, from the identification and acquisition of land, to the planning, execution and marketing of its projects, through to the maintenance and management of its completed developments. In residential business line, the company builds and sells a wide range of properties including houses, duplexes and apartments of varying sizes, with a focus on the higher end of the market. In commercial business line, company builds, leases and sells commercial office space, with a focus on properties attractive to large multinational tenants. The retail business line develops, manages and leases or sells shopping malls, which in many cases include cinema complexes. The DLF Group was responsible for developing as many as 21 premium urban colonies in Delhi and its neighboring regions, including South Extension, Greater Kailash and Hauz Khas in South Delhi.

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Competitive Strength Key competitive strengths of the company are: (i) Established brand name and reputation for project execution. (ii) Extensive land reserves forming the most important resource. (iii) Scale of operations allowing the company to benefit from economies of scale. (iv) Projects of the company being strategically located (v) Company having a tradition of innovation in the Indian real estate market. (vi) Experienced and dedicated management Objective of the Public Issue DLF Limited aims at using the proceeds of this public issue of shares to: (a) finance land acquisition expenditure, (b) finance the construction and development costs for some of its existing projects, (c) repay certain loans, (d) fund expenditures for general corporate purposes and (e) achieve the benefits of listing on the Stock Exchanges. Some of the main factors that advocate for investments in this public issue of shares are: Land reserves of 10250 + acres with a developable area of 574 million sq. ft. is owned by the company at various location in the country, providing the basis for the future projects for some years. Strategic tie-ups and joint ventures with world's leading infrastructure companies such as Laing ORourke PLC and Nakheel LLC of Dubai for undertaking construction projects.

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Company is leveraging its leadership position and real estate capabilities into related areas like special economic zones (SEZs), infrastructure and hospitality.

Extensive portfolio of commercial properties complies with the international standards for safety (such as against fire and earthquakes), security and luxury.

Integrated approach of the company to develop properties comprising of retail and commercial requirements assists in an incremental demand for properties.

Diversification plans of the company into unrelated business areas of cinema multiplexes, insurance (under the joint venture with Prudential), wind energy, other (airport management services, leisure & entertainment, etc.).

Land Reserves DLF has land reserves in various strategic locations across India, amounting to 10,255 acres, with 51% of their Land Reserve in the NCR, 23% in Kolkata, 5% in Goa, 5% in Maharashtra, 3% in Indore, 4% in Punjab, 2% in Bangalore and the balance in various other states. Innovators DLF was one of the first developers to anticipate the need for townships on the outskirts of fast growing cities and are credited with the growth of Gurgaon. DLF were one of the early developers to focus on theme-based projects such as The Magnolias development in DLF City which includes a golf course. DLF are one of few developers in India to provide commercial space with floor plates of over 100,000square feet. They have been an early developer of large shopping malls with integrated entertainment facilities.

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B] Housing Development and Infrastructure Limited (HDIL)

HDIL is a part of the Wadhawan Group (formerly known as the Dheeraj Group), which has been involved in real estate development in the Mumbai Metropolitan Region for almost three decades. Since 1996, HDIL has been satisfying the diverse needs of scores of home seekers in Mumbai Metropolitan region. Their business focuses on real estate development, including construction and development of residential projects, commercial, retail and slum rehabilitation projects. Mumbai, as is synonymous with its fast paced life, poses challenges to everyone, HDIL acted pro-actively in identifying the intricate needs of its residents and offered them just what they needed. The customer, because of Mumbais fast lifestyle, was not happy running from pillar to post, firstly to identify a house, look for a home loan and then complete all formalities. HDIL provided and still provides all services under one roof through tie-ups with banks and others. The common man was convinced about the integrity and the dedication of the HDIL by means of commitment in completion of projects and providing hassle free accommodation. It is the smile on the faces of the customers, which spread across the public and private sectors attracting the attention of the corporate sector. The mid 90s saw an upsurge in the corporate sector with the entry of several multinational companies and business houses. More and more people employed with these establishments began their search to have their own home. With numerous projects to its credit and lakhs of happy and satisfied home buyers, HDIL has carved a niche for itself in the real estate industry and has made its mark in the hearts of millions of people. HDIL is also planning to foray into airports

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and bid for Dharavi projects. Today, HDIL has several projects underway in the Western and Eastern suburbs of Mumbai, catering to the customer with varied needs and tastes. Other details of HDIL As of now, the current land reserves of the company stand at 112 million square feet, 80% of these land reserves are in the Mumbai Metropolitan region. The interesting thing to note is that 70% of these land reserves are actually owned by the company. So this is the differentiating factor between us and all the other companies. The company has around 45.5 million square feet of developments in ongoing projects; 85% of which the land cost is already paid for. It is across the length and breadth of Mumbai that we are present. We have properties in Carmichael Road going all the way to Dadar into Bandra, Versova and then going into various other sub-regions of Mumbai. We are present now in Hyderabad and Cochin. A few of the other projects that we are into are slum rehabilitation scheme as well; although thats only 15% of our ongoing projects. We are doing a couple of major schemes in Bandra-Kurla Complex; its a 2.8 million square feet development, out of which 1.7 million square feet has been agreed to be sold to the Adani Group. 1.1 million square feet is still with us, which we will be developing over a period of time. The company also has a 17-acre plot in Versova, which along with Anil Dhirubai Ambani Group (ADA Group), is going to be put for the Metro rail yard - the development rights for that are with the company. As of now, the 112 million square feet that we are talking, about 69.9% is actually owned by the company; 15% of it is under MoUs and agreements to acquire. But these MoUs do not have any revocation clauses. 11% of that is under joint venture with partners, but the joint venture with partners is only to the economic benefit of the project.

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It is not to the execution, the executions rest with HDIL. We are present in all business segments such as commercial, retail, multiplexes, offices. No money is being used for any development of planned projects. All the money that we are raising now which will be to the tune of 1,400 or 1,500 crore will be utilised for construction of ongoing projects. Only a 144 crore, which remains outstanding as land payment will be taken out from the proceeds. Objects of the issue Acquisition of land and land development rights for our Ongoing and Planned projects; Construction of our Ongoing and Planned projects; and. General corporate purposes

C] OMAXE Limited The company was originally set up as Omaxe Builders Private limited in 1989, promoted by Shri. Rohtas Goel , the founder, to undertake construction & contracting business. The company further changed its constitution to a limited company known as Omaxe Construction Ltd., in 1999. The name of the company has now changed to OMAXE LTD from 2006. The company began life as a civil construction and contracting company, has Successfully executed more than 120 prestigious Industrial, Institutional, Commercial, Residential and Hospital construction projects.

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The company entered the Real Estate Development business in 2001 and in now amongst the large Real Estate Development companies in India. The company has executed construction contracts for a number of prestigious Indian private, public sector and Multinational's clients. Omaxe was founded by Shri. Rohtas Goel , a first generation entrepreneur, a civil engineer by qualification and a visionary having more than two decades of experience in Construction and Real Estate Development. Mr. Goel, as the Chairman & Managing Director of Omaxe has been at the forefront, a man with a mission of building globally comparable quality Residential & Commercial projects, his motto Turning Dreams Into Realty Omaxe has received a number of awards from the industry, recognition of its continued efforts towards achieving excellence and quality. The company became the first Construction Company of northern India to receive an ISO 9001:2000 Certification. The company which was founded as a civil construction and contracting organization in1989 and subsequently diversified its business to focus on Real Estate Development from the year 2001, to capture the opportunity offered by the growing Real Estate markets in India , is today among the large Real Estate Development companies in India. The company in a short span of 5 years has completed and delivered 10 projects consisting of 8 residential and 2 commercial covering approx 5.13 million sq. ft of area, with all on time deliveries. The company currently has 52 projects under development. These include 21 group housing projects, 16 integrated townships, 14 shopping malls and commercial complexes and 1 hotel. The company is at present developing over 140 million sq ft of saleable area across 30 towns in 9 states in Northern and Central India.

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Chapter VIII: Findings & Analysis

A] ISSUE DETAILS
Company Name Type of Issue Issue Dates Issue Opens Issue Closes Total Issue Size (No. of Shares) Price Bands Lower (Rs) Upper (Rs) Total Amt (Rs) Issue Allocation QIB NonInstitutional Retail DLF LIMITED Book built HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED Book built OMAXE LIMITED Book built

11-06-07 14-06-07 17,50,00,000

28-06-07 03-07-07 3,00,00,000

17-07-07 20-07-07 1,77,96,520

500 550 9625

430 500 1500

265 310 552

104400000 17400000 52200000

17640000 2940000 8820000 196 14

10500000 1750000 5250000 320 20

180 Max Shares (For Retail) 10 Application Min & Multiple (Shares) Karvy Stock Registrar Broking limited Name Lead Manager Kotak, DSP Merrill Lynch

Karvy Stock Broking Limited Enam, Kotak

Intime Spectrum Registry Ltd DSP Merrill Lynch

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Analysis of the table DLF Limited came up 1st with the IPO in this study and it had largest number of shares amongst the three companies. The lowest price band is of Omaxe Limited Rs. 265 to Rs. 310 and that of DLF Limited was Rs. 500 to Rs.550. As the price band of Omaxe was low a retailer could apply for a maximum of 320 shares, for HDIL 196 shares and for DLF 180 shares. Minimum application was lowest in DLF 10 shares and Omaxe was 20 shares , HDIL was in all cases in middle with 14 shares. The three companies DLF Limited, Housing Development & Infrastructure Limited and Omaxe Limited adopted the book building method for the issue.

Securities and Exchange Board of India (SEBI) guidelines defines Book Building as "a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built-up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document". Book Building is basically a process used in Initial Public Offer (IPO) for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date.

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Difference between Book Building Issue and Fixed Price Issue In Book Building securities are offered at prices above or equal to the floor prices, whereas securities are offered at a fixed price in case of a public issue. In case of Book Building, the demand can be known everyday as the book is built. But in case of the public issue the demand is known at the close of the issue. Price at which securities will be allotted is not known in case of offer of shares through book building while in case of offer of shares through normal public issue, price is known in advance to investor. The Process: The Issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'. The Issuer specifies the number of securities to be issued and the price band for orders. The Issuer also appoints syndicate members with whom orders can be placed by the investors. Investors place their order with a syndicate member who inputs the orders into the 'electronic book'. This process is called 'bidding' and is similar to open auction. A Book should remain open for a minimum of 5 days. Bids cannot be entered less than the floor price. Bids can be revised by the bidder before the issue closes.

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B] BASIS OF ALLOTMENT The Issues were made through the 100% Book Building Process wherein at least 60% of the Net Issue was allocated on a proportionate basis to Qualified Institutional Buyers (QIBs) (including 5% of the QIB portion that was specifically to be allotted to mutual funds), further, not less than 10% of the net Issue was made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue was made available for allocation on a proportionate basis to Retail Bidders, subject to valid bids being received at or above the Issue Price. The refund orders and allotment advice and notices (where applicable) were dispatched to the address of the investors as registered with the depositories. The Refund Orders have been over-printed with the Bank Mandate details as registered, if any, with the depositories. The shares allocated to successful applicants are being credited to their beneficiary accounts subject to validation of the account details with the depositories concerned. 1. DLF LTD Public Issue of 17,50,00,000 Equity shares of Rs. 2/- each for cash at a price of Rs. 525/per equity share (including share premium of Rs. 523/- per equity share) aggregating Rs. 9,187.50 crores referred to as "THE ISSUE"). The issue comprised a reservation of 10,00,000 equity shares for subscription by employees and the net issue to the public of 17,40,00,000 equity shares of Rs. 2/- each for Rs. 525/- per equity share. The issue constitutes 10.26% of the fully diluted post issue capital of DLF Limited (COMPANY or ISSUER).

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The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange Limited ("BSE") on 27th June, 2007. The IPO Committee of the Company at its Meeting held at Hyderabad on 28th June, 2007 has approved the basis of allocation of Equity Shares and has allotted the shares to various successful applicants. The listing applications have been filed with BSE & NSE on June 28, 2007. The Issue received 5,60,328 applications for 57,82,28,439 Equity Shares resulting in 3.30 times subscription. The details of the applications received in the Issue from QIBs, NonInstitutional, Retail Individual Investor and Employee categories are as under:

Category Qualified Institutional Buyers Non Institutional Investors Retail Individual Investors Employees

No. of Applications 219 4692 554467 950

No. of Shares applied for 514460490 16071530 46892479 803940

Subscription (no. of times) 4.93 0.92 0.90 0.80

Subscription
10.60% 11.92%

12.19% 65.30%

Qualified Institutional Buyers Retail Individual Investors

Non Institutional Investors Employees

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Analysis of the chart: A. Allocation to Employees The Basis of Allocation to the Employees, who have bid at cut-off or at and above the Issue Price of Rs.525 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 0.79 times. Hence FULL and FIRM allotments have been made against all valid applications. The total number of shares allotted in this category is 799850 Equity Shares to 941 successful applicants. The unsubscribed portion of 200150 Equity Shares has been added to QIB category. B. Allocation to Retail Individual Investors The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off or at and above the Issue Price of Rs.525 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 0.85 times. Hence FULL and FIRM allotments have been made against all valid applications. The total number of Equity Shares allotted in this category is 4,47,19,450 Equity Shares to 525,512 successful applicants. The unsubscribed portion of 74,80,550 equity shares has been added to QIB category. C. Allocation to Non Institutional Investors The Basis of Allocation to the Non-Institutional Investors, who have bid at cut-off or at and above the Issue Price of Rs.525 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 0.84 times. Hence FULL and FIRM allotments have been made against all valid applications.

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The total number of Equity Shares allotted in this category is 1,46,11,290 Equity Shares to 2,172 successful applicants. The spill over portion of 2,788,710 Equity Shares has been added to QIB category. D. Allocation to QIBs Allocation to QIBs has been done on a proportionate basis in consultation with BSE. As per the SEBI guidelines, Mutual Funds were initially allotted 5% of the quantum of shares available (57,43,471) and other QIBs and unsatisfied demands of Mutual Funds were allotted the remaining available shares (10,91,25,939) on proportionate basis. Total number of Equity Shares allotted in this category is 114869410 Equity Shares to 202 allottees i.e. 100% of valid applicants. Category FIs/Banks MFs FIIs VCs Insurance Companies 2947423 Total 114869410

No.of Shares 4576704 6391817 100943548 9918

No.of Shares 3% 0% 4% 6%

Fls/Banks MFs Flls Insurance Cos VCs 87%

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2. Housing Development and Infrastructure Limited (HDIL) Public issue of 29,700,000 Equity shares of Rs. 10 each of Housing Development and Infrastructure Limited ("HDIL" or the "COMPANY" or the "ISSUER") for cash at a price of Rs. 500 per equity share (including a share premium of Rs. 490 per equity share) aggregating to Rs. 14,850 million (THE "ISSUE"). The issue comprises a reservation of up to 600,000 equity shares for subscription by eligible employees (The "Employee Reservation Portion") and an issue an issue to the public of 29,100,000 equity shares ("The Net Issue"). The face value per equity share is Rs. 10/-. The issue price per equity share is Rs. 500/- and it is 50 times of the face value. The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange Limited ("BSE") on 16th July, 2007. The Committee of Directors of the company at its meeting held at Hyderabad on 17th July, 2007 has approved the basis of allocation of shares and has allotted the shares to various successful applicants. The Issue received 1,48,844 applications for 19,06,23,174 equity shares resulting in 5.58 times subscription. The details of the applications received in the Issue from Qualified Institutional Buyers', Non-Institutional, Retail Individual Investor and Employee categories are as under:

Category Qualified Institutional Buyers Non Institutional Investors Retail Individual Investors Employees

No. of Applications 98 606 148003 137

No. of Shares Subscription 172448136 8.565 4921078 1.466 13224084 1.313 29876 0.049

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Subscription
0.43% 11.52%

12.87%

75.18%

Qualified Institutional Buyers Retail Individual Investors

Non Institutional Investors Employees

Analysis of the chart: A. Allocation to Employees The Basis of Allocation to the Employees, who have bid at cut-off or at and above the Issue Price of Rs.500 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 0.049 times. Hence FULL and FIRM allotments have been made against all valid applications. The total number of shares allotted in this category is 29,568 Equity Shares to 136 successful applicants. The unsubscribed portion of 5,70,432 equity shares has been added to Retail and Non-Institutional categories in the ratio of 50:50. B. Allocation to Retail Individual Investors The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off or at and above the Issue Price of Rs.500 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 1.244 times. The total number of shares allotted In this category is 1,03,51,716 Equity Shares (including 285,216 equity shares spilled over from employees category) to 1,37,687 successful applicants.

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C. Allocation to Non Institutional Investors The Basis of Allocation to the Non-Institutional Investors, who have bid at cut-off or at and above the Issue Price of Rs.500 per Equity Share, was finalized in consultation with BSE. The category was subscribed to the extent of 1.33 times. The total number of shares allotted in this-category is 36,40,716 Equity Shares (including 2,85,216 equity shares spilled over from employee category) to 495 successful applicants. D. Allocation to QIBs Allocation to QIBs has been done on a proportionate basis in consultation with BSE. As per the SEBI guidelines, Mutual Funds were initially allotted 5% of the quantum of shares available (10,06,650) and other QIBs and unsatisfied demands of Mutual Funds were allotted the remaining available shares (1,91,26,350) on proportionate basis. Category No.of Shares Fls/Banks 1191330 MFs 1737175 Flls 14091079 ICs 3113416 Total 20133000

No.of Shares

15%

6% 9% Fls/Banks MFs Flls Insurance Cos 70%

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3. OMAXE Limited Public issue of up to 17,796,520 Equity shares of Rs. 10 each for cash at a price of Rs. 310 per equity share aggregating Rs. 5,51652 million by OMAXE Limited ("OMAXE", "THE COMPANY" or "THE ISSUER"). The face value of equity share is Rs. 10/- each. The issue price of Rs 310/- each is 31 times of the face value. the Equity Shares of the Company are proposed to be listed on The Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE") and trading is expected to start on or around August 10,2007. The Basis of Allocation was finalized in consultation with the Bombay Stock Exchange ("BSE") on August 1, 2007. The IPO Committee of Directors of the Company at its meeting held on August 2, 2007 approved the Basis of Allocation of Equity Shares in the Issue and has allotted equity Shares to various successful applicants. The listing will be filed with the BSE and NSE on August 3, 2007. The issue received 4,58,544 applications for 1,21,18,96,980 Equity Shares resulting in 62 times subscription. The details of the applications received in the Issue from QIBs, Non Institutional Bidders, Retail Individual Bidders and Eligible Employees are as under:

Category Retail Individual Bidders Non Institutional Bidders QIBs Eligible Employees

No. of applications 456086 1642 287 529

No. of shares 71586860 138656620 1001317120 336380

Subscription (No. of times) 12.3960 72.0294 86.6941 1.1344

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Subscription
7.20% 0.66%

41.82%

50.33%

QIBs Retail Individual Bidders

Non Institutional Bidders Eligible Employees

Analysis of the chart A) Allocation to Non Institutional Bidders: This category was over subscribed 71.6437 times. The total number of shares allotted in this category is 1924992 Equity Shares. B) Allocation to Retail Individual Bidders: This category was over subscribed 12.144457 times. The total number of shares allotted in this category is 5775008 Equity Shares. C) Allocation to Eligible Employees This category was over subscribed 1.109133 times. The total number of shares allotted in this category is 296520 Equity Shares.

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D) Allocation to Qualified Institutional Buyers Financial Institutional/Banks 1087933 Mutual Funds 2335151 Foreign Institutional Investors 7389428 Insurance Companies 681587

Category No.of Equity. Shares

VCs

55901

No.of Shares
0% 6%

9%

20%

FIs/Banks MFs FIIs Insurance Cos

65%

VCs

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C] STOCK PERFORMANCE
1. DLF Limited

The DLF Limited was listed on stock exchange on 5th July 2007 and the issue price was Rs 525. It opened at Rs. 526.6 and the days high was Rs.583.95 and finally it closed at Rs. 569.80. The total quantity traded on the 1st day was 78025942 shares. The stock performed well. On 23rd July 2007 its price was rising and reached to Rs. 672.4 the volume traded was 5850767 shares. On 23rd Aug 2007 the price fell down to Rs.555.2 the lowest till the date. Again it starting rising and on 24th Sept 2007 it reached the highest Rs.781.4 the volume traded was 7961666 shares. So the overall performance of DLF Limited was good.

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2. Housing Development & Infrastructure Limited

Housing Development & Infrastructure Limited was listed on 24th July 2007 and the issue price was Rs. 500. It closed at Rs. 559.35 and the volume traded was 28590806 shares on the 1st day itself. On 26th July 2007 the price reached to Rs. 621.40 and the volume traded was 9125757 shares. Then it had many fluctuations and reached to Rs.487.25 on 23rd Aug 2007 and the traded quantity was 1566565 shares. Then the market price reached to Rs. 647.65 on 20th Sept. 2007, it was at its highest. The total quantity traded on this day was 1831686 shares. Thus HDIL went through many fluctuations during the period.

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3. Omaxe Limited

Omaxe Limited was listed on 9th August 2007 on the stock exchange. It was issued at Rs. 310. Omaxe opened at Rs. 410 and closed at Rs. 349.35. The days high was Rs. 448 and low was Rs. 341.40. The total volume traded was 29443704 shares. Then the market price fell down to Rs. 274.30 on 22nd Aug 2007 and total traded quantity was 1650308 shares. On 19th Sept 2007 it reached the highest at Rs. 361.10. Thus Omaxe Limited stock reached at very low price and also at a high price though the volume of shares traded was low throughout the period.

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Chapter- IX: Observations & Conclusions

The Outlook for Infrastructure development remains stronger in the current and coming future. Infrastructure Realty projects are on the rise with Construction companies opting to go on for rental of equipments as not to block their funds required for equipments as they can be utilized only at one site-if purchased outright. Looking into this factor the Companies have huge growth prospects in respect of hiring of equipments. DLF Limited came up first with the IPO in this study and it had largest number of shares i.e. the size of issue was largest amongst the three companies. This gave an advantage to the company. Its price band was also high. The price band of Omaxe Limited was low as compared to others. The Qualified Institutional Buyers were allotted highest number of shares in all the companies as their subscription was high. In DLF Limited the Non Institutional buyers and Retailers were allotted an equal number of shares. It was same for HDIL also. But Omaxe Limited Non institutional buyers were allotted much more than retailers. The employees were allotted very small amount as there was a low subscription from them in all the three companies. It was found that all the three companies DLF Limited, Housing Development & Infrastructure Limited and Omaxe Limited went through many fluctuations in the stock market, their prices were very high and also very low. In DLF Limited and Housing Development & Infrastructure Limited the volume traded was very high on the first day later on it reduced. But in case of Omaxe Limited the highest traded quantity was not on the first day. Thus all the three companies can perform well in the future and have a lot of scope as the infrastructure sector is booming.

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Chapter- X: Bibliography
The secondary data is obtained from the following websites: www.indiaipo.com www.dlf.com www.hdil.com www.omaxe.com www.economictimes.com www.bseindia.com www.nseindia.com www.google.com

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