of IPO
2
What is an IPO?
its existing securities or both for the first time to the public
3
Fresh Issue Offer For Sale Fresh Issue Offer For Sale
4
Reasons to go public…
Raising funds to finance cap ex programs like expansion,
diversification, modernization
Financing of increased working capital requirements
Debt refinancing
Financing acquisitions like a manufacturing unit, brand
acquisition
Exit route for existing investors
5
Intermediaries
Merchant Bankers
Registrar and Share Transfer Agents
Bankers to the Issue
Underwriters
Stock Brokers and Sub Brokers
Depositories
6
Entry Norms
Entry norm I (EN I)
The company shall meet the following requirements:
(a) Net Tangible Assets of at least Rs. 3 crore for 3 full years
(b) Distributable profits in at least three years
(c) Net worth of at least Rs. 1 crore in three years
(d) If change in name, at least 50% revenue for preceding 1 year
should be from the new activity
(e) The issue size does not exceed 5 times the pre- issue net worth
7
(b) The minimum post-issue face value capital shall be Rs. 10 crore
or there shall be a compulsory market-making for at least 2 years
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Pre-Issue Obligation
Pre-Issue Obligation
Registrar
Category I and category II
Assists in selection of banker
Assists in devising application form
Collection of daily collection figure
Finalize the list of eligible allotters
Amount of shares outstanding in the market matches
the amount of shares authorized by the company
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Pre-Issue Obligation
Bankers
Compulsory registration with SEBI
Share application money account
Issue of certificate of final collection figure
Acceptance of money payable on allotment and on
calls
Refund of application money to unsuccessful
applicants
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Pre-Issue Obligation
Underwriters
Advertising Agency
English National Daily with wide circulation
Hindi National newspaper
Regional language newspaper with wide circulation at
the place of the registered office of the issuer
Shall be in the format and contain the minimum
disclosure
13
Pre-Issue Obligation
Auditor
Auditors’ report
Promoters contribution certificate
14
Promoter’s Contribution
Who is Promoter?
Persons who are in overall control of the company
Instrumental in the formulation of a plan or
programme pursuant to which the securities are
offered to public
Persons named in the prospectus as promoters
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Promoter’s Contribution
Unlisted company
Minimum requirement: 20% of the post-issue capital
Listed company
Post-issue holding should be more than 20%
Promoter’s Contribution
Securities not eligible for computation
Shares issued for consideration other than cash
Shares resulting from bonus issue out of revaluation
reserves
Shares issued to promoter during preceding year, at a
lower price
Shares issued to partners for capital brought in during last
year
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Lock-in
Indicates a freeze on the shares
For minimum contribution 3 years
For excess contribution 1 year
Lock in period starts from
Date of allotment
or
Date commencement of commercial production
Securities And Exchange Board Of
India
Issue Details
(a) Logo, name, previous name, if any, address, telephone number, fax
number, contact person, website address and e-mail address of the issuer
company
(b) Nature, number, price and amount of instruments offered and issue
size, as may be applicable
Issue Details
(f) Logo, names and addresses of all the Lead Merchant Bankers
with their titles who file the prospectus with the Board, along
with their telephone numbers, fax numbers, website addresses
and e-mail addresses
(g) Logo, names of the Registrar to the Issue, along with its
telephone number, fax number, website address and e-mail
address
(h) Issue Schedule
(i) IPO Grading, Credit Rating, if applicable
(j) Names of the Stock Exchanges where listing is proposed along
with details of in-principle approval
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Table of Contents
Risk Factors
Introduction
1. Summary
i. Summary of the industry and business of the issuer company
2. General Information
i. Name, address of registered office and the registration number of the issuer company, along with the
address of the Registrar of Companies where the issuer company is registered
iii. Brief details of the Chairman, Managing Director, Whole Time Director, etc
iv. Names, addresses, telephone numbers, fax numbers and e-mail addresses of the Company Secretary,
Legal Advisor and Bankers to the Company
v. Name, address, telephone number, fax number and e-mail address of the Compliance Officer
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vi. Names, addresses, telephone numbers, fax numbers, contact person, website
addresses and e-mail addresses of the Merchant Bankers, Co-Managers, Registrars
to the Issue, Bankers to the Issue, Brokers to the Issue, Syndicate members, Self
Certified Syndicate Banks, etc.
vii. Names, addresses, telephone numbers, fax numbers and e-mail addresses of the
auditors of the issuer company.
viii. Statement of inter se allocation of responsibilities among Lead Managers.
ix. Credit Rating (in case of debenture issue) / IPO Grading.
x. Names, addresses, telephone numbers, fax numbers, website addresses and e-mail
addresses of the trustees under debenture trust deed (in case of debenture issue).
xi. Name of the monitoring agency, if applicable.
xii. Where the project is being appraised, name, address, telephone number and e-mail
address of the appraising entity.
xiii. Book Building Process in brief.
xiv. Details of Underwriting, if any.
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v. Funds Deployed
deployed
5. Management
i. Board of Directors.
vi. Change, if any, in the directors in last three years and reasons thereof, wherever applicable.
ix. Employees.
x. Disclosures regarding employees stock option scheme/ employees stock purchase scheme of the
issuer company, if any, as required by the Guidelines or Regulations of the Board relating to
Financial Statements
1. Selected Consolidated Financial and Operating data.
2. Financial information of the issuer company.
3. Financial information of group companies.
4. Changes in Accounting Policies in the last three years.
5. Management’s Discussion and Analysis of Financial Condition and
Results of Operations as Reflected in the Financial Statements:
i. Overview of the business of the issuer company.
ii. Significant developments subsequent to the last financial year.
iii. Factors that may affect Results of the Operations.
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ii. Outstanding litigations against the issuer company’s subsidiaries (if applicable).
iv. Letter of intent/ industrial license and declaration of the Central Government/ RBI about
Offering Information
1. Terms of the issue
i. Ranking of equity shares. (Details of Applications Supported by Blocked Amount Process)
iii. Face value and issue price/ floor price/ price band.
v. Market lot.
vii.Minimum subscription.
consolidation/ splitting.
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2. Issue procedure:
i. Fixed price issue or book building procedure as may be applicable, including details
regarding bid form / application form, who can bid/apply, maximum and minimum
bid/application size, bidding process, bidding, bids at different price levels, etc.
ii. Option to subscribe in the issue.
iii. How to apply - availability of forms, prospectus and mode of payment.
iv. Escrow mechanism:
(a) Escrow A/c. of the company.
(f) Investor’s attention invited to contact the compliance officer in case of any pre-issue/ post-
issue related problems.
Difference between…
Offer document
Covers all the relevant information to help an investor to make
his/her investment decision
Draft Offer document
Offer document in draft stage
Are filed with SEBI, at least 21 days prior to the filing of the Offer
Document with the RoC
Abridged Prospectus
Contains all the salient features of a prospectus
Accompanies the application form of public issues
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Pricing
No price formula stipulated by SEBI
Issuer in consultation with the merchant banker
determines the price as well as the price band
SEBI plays no role in price fixation
Full disclosure of parameters used for pricing to SEBI
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Reservations
Retail Investors 35%
Non Institutional Investors 15%
Qualified Institutional Investors 50%
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Allotment
Applicants categorized according to no. of shares applied
The total number of shares to be allotted to each
category as a whole shall be arrived at on a proportionate
basis (number of applicants in the category x number of
shares applied for) multiplied by the inverse of the over-
subscription ratio
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Illustration
Total number of applicants in category of 100s 1,500
Total number of shares applied for 1,50,000
Number of times over-subscribed 3
Therefore, Proportionate allotment to category 1,50,000 x 1/3
50,000
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Illustration
Number of the shares to be allotted to the successful allotters shall be
arrived at on a proportionate basis
E.g.:
No. of shares applied by each applicant 100
No. of times oversubscribed 3
Proportionate allotment to each successful applicant 100 x 1/3
(to be rounded off to 100) 33
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Illustration:
If the proportionate allotment works out to 250, the applicant would be
allotted 300 shares.
If however the proportionate allotment works out to 240, the applicant
shall be allotted 200 shares.
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Glossary
Offer for sale
A public invitation by a sponsoring intermediary, such as
an investment or merchant bank, of existing securities
Glossary
Fresh Issue
Initial public offer through issue of new shares
Rights Issue
Existing shareholders have the privilege to buy a
specified number of new shares from the firm at a
specified price within a specified time
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Glossary
Market Making
A broker-dealer firm accepts the risk of holding a
certain number of shares of a particular security in
order to facilitate trading and liquidity in that
security by displaying buy and sell quotations for a
guaranteed number of shares. The lead manager is
supposed to be the market maker or appoint one
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Glossary
Qualified Institutional Buyers
Institutional investors who are generally perceived to possess
expertise and the financial muscle to evaluate and invest in the
capital markets
Lead Managers
The commercial or investment bank which has primary
responsibility for organizing a given credit or bond issuance.
This bank will find other lending organizations or underwriters
to create the syndicate, negotiate terms with the issuer, and
assess market conditions. Also called syndicate manager,
managing underwriter or lead underwriter
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Glossary
Registrar
Glossary
Underwriter
Financial intermediaries that buy stock or bonds from an
issuer and then sell these securities to the public
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Glossary
Grey Market
Guidelines on advertisement
Truthful, clear, concise matter and understandable
language
Statements considered misleading
Should not use celebrities, models, fictional characters,
landmarks
In case of Television ads risk factors should not be
scrolled and advise to refer to Red Herring Prospectus
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3. Submission of Application
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Fully paid shares shall be free from all lien and that in the case of partly
paid shares the Issuer's lien shall be restricted to moneys called or payable
at a fixed time in respect of such shares
Any amount paid up in advance of calls on any share may carry interest but
shall not in respect thereof confer a right to dividend or to participate in
profits
Option or right to call of shares shall not be given to any person except with
the sanction of the Issuer in general meetings.
Permission for Sub-Division/Consolidation of Share Certificate.
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BSE has a Listing Committee , comprising of market experts, which decides upon the
matter of granting permission to companies to use the name of BSE in their
prospectus/offer documents. This Committee evaluates the promoters, company,
project , financials, risk factors and several other aspects before taking a decision in
this regard.
Decision with regard to some types/sizes of companies has been delegated to the
Internal Committee of BSE.
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Risk Factors
• An investment in the company’s Equity Shares involves a high
degree of risk. One should carefully consider all of the information
in this Prospectus, including the risks and uncertainties described
below, before making an investment decision. Risks have been
quantified, wherever possible. If any of the following risks actually
occur, the business, financial condition and results of operations
could suffer, the trading price of the Equity Shares may decline
and you may lose all or part of your investment.
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Introduction
• Summary
1. Industry Overview
Progressive reforms
Telecommunication sector in the forefront of reforms
Invited private participation
Telecom density was just 2% prior to telecom reforms
Quite low compared to other developed countries having telecom
density of 70-80%
Overall teledensity is 23.89% at the end of December 2007
T&M instruments sector is playing a vital role in instrument
operations
The Indian market for T&M instruments was estimated at Rs. 602
crore for the year 2006-07
Imported instruments’ sales estimates were at Rs. 552 crore
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Introduction contd…
2. Business Overview
ATL deals in hi-tech test & measuring equipments
The Company has its manufacturing facilities situated at two
production units
ATL is ISO 9001:2000 Certified Company manufacturing Fibre
Optic Test Equipments & Cable Fault Locators
Currently, ATL manufactures products for Telephone Service
Providers, Defence Sector, Railways, Telecom equipment
manufacturing companies and Cable TV Operators
ATL is planning to expand in to designing products for Defence
Sector and Educational Sector also
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Available for allocation to Mutual Funds Upto 97,500 Equity Shares of Rs. 10 each
(Available for Allocation on a proportionate basis)
Balance for all QIBs including Mutual Funds 18,52,500 Equity Shares of Rs. 10 each
(Available for Allocation on a proportionate basis)
Non Institutional Portion Not less than 5,85,000 Equity Shares of Rs. 10 each
(Available for Allocation on a proportionate basis)
Retail portion Not less than 13,65,000 Equity Shares of Rs.10 each
(Available for Allocation on a proportionate basis)
Equity Shares outstanding prior to the Issue 66,59,400 Equity Shares of Rs. 10 each
Objects of the Issue The Company intends to deploy the net proceeds of the fresh issue for part-
financing its proposed project
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Introduction contd…
General Information
AISHWARYA TELECOM LIMITED
• INCORPORATION
▫ The Company was incorporated as Aishwarya Telecom Private Limited on June 2, 1995
with the Registrar of Companies, Andhra Pradesh, Hyderabad and took over the
business of the partnership firm named ‘Advanced Electronics & Communications
System’. Subsequently, it was converted into a Public Limited Company on July 12,
2005 and the name of the company was changed Aishwarya Telecom Limited vide a
fresh Certificate of Incorporation obtained from the Registrar of Companies, Andhra
Pradesh, Hyderabad.
• REGISTERED OFFICE
Aishwarya Telecom Limited
3-C, Samrat Commercial Complex
Opp A G Office
Saifabad, Khairatabad
Hyderabad - 500 004
Andhra Pradesh, India
Tel.: +91 40 2323 6019, 2323 5439
Fax: +91 40 2329 6282
E-mail: ipo@aishwaryatelecom.com
Website: www.aishwaryatelecom.com
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Projects
• ATL has planned various expansion projects as
detailed below. (Rs in Lakhs)
Project Cost
Capital expenditure for R&D of Optical Time Domain Reflectometer 80.39
FUNDS REQUIREMENT
MEANS OF FINANCE
About ATL
• Location of the Project
▫ Existing Project:
The Company has its manufacturing facilities situated at two production
units
1) 2-330, Thota Street 2) Industrial Plot No. F-102
Yanam – 533 464 UPSIDC Industrial Area,
Pondicherry Selaqui
Dehradun, Uttarakhand
• Technology
▫ The Company deals in Test & Measuring equipments (T&M). T&M
Equipments are used to qualify, trouble shoot and to maintain
the telecom optical, copper and wireless networks.
▫ The products (Test and Measuring Equipments) of the Company
are mainly classified into three categories
1. Fiber Optic Cable Testing Equipments
2. Data Network Testers
3. Copper Cable Testing Equipments
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• By the company
▫ The Company is party to certain legal proceedings, incidental to its
business and operations, which if not determined in its favour, could
have a material adverse impact on the business, results of operations
and/or financial condition of the Company.
Sales Tax 33,79,692The Commercial Tax Officer, while assessing the CST
Sales Tax Return of the Company for the year 2003-04,
disallowed certain exemptions and also enhanced the
taxable turnover; the Appellate Deputy Commissioner
passed an order, in reply to the company’s appeal,
wherein it had partly allowed and partly dismissed the
appeal
Criminal 8,95,000The Company has filed a criminal case under Section 138
of the Negotiable Instruments Act, against one of its
customers for non-payment of the amount due towards
sale of goods and consequent dishonour of cheque
received from the said customer.
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RISK FACTORS
Business related risks
Outstanding legal proceedings against Company
Demand Notice for Rs 886.14 lakhs from Income Tax
Department for the assessment year 2005-06
One of directors Shri Y.P. Trivedi was in RBI’s defaulters list.
Negative cash flows in the recent five years period
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Future sales of Equity Shares may adversely affect the market price
Capital structure
113
Means of Finance
2. Equity 16,353.00
Public / Promoters Contribution
3. Subsidy 208.00
TOTAL 32,020.00
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COMPANIES/TRUSTS/SOCIETIES
Polytex Limited
Nirved Traders Private Limited
Shearson Investment & Trading Company Private Limited
Yah Society
Birla Industries Group Charity Trust ( Medical Institution)
Sunanda Medical Institute
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Management
BOARD OF DIRECTORS
Mr. P.B. Bhardwaj
Mr. Yashovardhan Birla
Mr. P.V.R .Murthy
Mr. Sanjay K. Agarwal
Mr. Y. P. Trivedi
Mr. Mohan Jayakar
Mr. Mohandas Shenoy Adige
Mr. Navinchandra Chhaganlal Shah
Mr. Alok Bhardwaj
121
References
http://www.reliancemoney.com
http://en.wikipedia.org
http://finance.indiamart.com/india_business_information/sebi_investors_kno
whow.html
http://www.hinduonnet.com/2003/03/26/stories/2003032604291800.htm
http://demataccount.com/2008/01/15/learning-basic-concepts-of-ipo-india/
http://www.sebi.gov.in
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THANK YOU