ISSUE MANAGEMENT

IN
KARVY GROUP LIMITED
PRESENTED BY
ABINAYA
ABIRAMI
ARTHI
PADMINI
SANKHAVI
SWEETY
 COMPANY PROFILE
 Karvy Consultants Limited was established in 1982 at
Hyderabad
 It was started with a capital of Rs. 1,50,000.
 In January 1998, Karvy became first Depository
Participant in Andhra Pradesh
 Today, company has 230 branch offices in 164 cities all
over the India.
 Karvy Stock Broking Limited which offers a range of
financial services is a member of National Stock
Exchange (NSE)
 VISION AND MISSION
 Karvy’s mission statement is “To Bring Industry,
Finance and People together.”
 Company’s vision is crystal clear and mind frame
very directed. “To be pioneering financial
services company. And continue to grow at a
healthy pace, year after year, decade after
decade.”
 KARVY GROUP

 Karvy Consultants Limited

 Karvy Securities Limited
 Karvy Investor Services Limited 
 Karvy Stock broking Limited 
 Karvy Computer Shares Pvt. Ltd. 
 Corporate finance & Merchant
Banking
 Corporate finance is the financial activity of
corporation. It deals with the firm's operations with
regard to investing and financing.
 Merchant banking is a financial intermediation that
matches entities that need capital and those that have
capital.
 Karvy enjoys SEBI Category I authorization for
Merchant Banking.
 Karvy offers the full spectrum of Merchant Banking
Services, beginning from identifying the best time for
an issue to final stage of marketing it, to harvest
unparalleled success.
 ISSUE MANAGEMENT
 It refers to a management of securities offerings of
clients to the general public and existing
shareholders on right basis. Issue managers are also
known as merchant bankers or lead managers
TYPES OF ISSUE
 Public issue
 Right Issue
 Private placement
 Placement of Issue
Initial issues are floated
1. Through prospectus
2. Bought out deals/offer for sale
3. Private placement
4. Right issue
5. Book building
 Intermediaries to an Issue
 Merchant Bankers to the issue or Book Running Lead
Managers (BRLM)
 Registrars to the issue
 Bankers to the issue
 Auditors of the company
 Underwriters to the issue
 Solicitors
 Advertising agencies
 Financial institutions
 Government/ statutory agencies
PUBLIC ISSUES- ELIGIBLITY
NORMS
FOR UNLISTED COMPANIES:
 Should have a pre-issue net worth of a minimum

amount of Rs.1 crore in 3 years. Compulsorily

meet the minimum net worth level during the 2
immediately preceding year.
 Should have a track record of distributable profits

as given in section 205 of Companies Act, 1956 for

atleast 3 years.
 The issue size should not exceed an amount equal

to five times its pre-issue networth.

FOR LISTED COMPANIES:
 Must have a track record of distributable profits in

compliance with section 205 of Companies

Act,1956 for atleast 3 years.
 It must have a pre-issue net worth of not less than

Rs.1 crore in 3 years, with the minimum net worth

to be met during the 2 immediately preceding year.
 Benefits of Issue Management
 A support scheme to cash-in on the opportunities
available in the primary market
 Facility provides leverage to make large
application in public issue and procure higher
allotments thereby maximizing gains
 Investor has to provide the margin amount and
KFSL finances the remaining amount
 Maximize gains on your existing funds available
for investments
 Easier and faster processing
 Lead Manager
 Appointed by company to manage the public issue
programme.
 BRLM - A Merchant banker possessing a valid
SEBI registration
 Lead manages are responsible to write the Red Herring
Prospectus (RHP) and get it approve by SEBI
 In brief Lead Manager’s responsibilities include, initiate
the IPO processing, write draft RHP and get it approve
by SEBI, help company in selling the IPO Shares and
road shows, help company in finalize the issue price,
issue opening & closing dates, listing date etc.
 LIMITS OF LEAD MANAGER

SIZE OF THE ISSUE ( IN RS) NUMBER OF LEAD MANAGERS

50 Crore 2
50-100 Crore 3
100-200 Crore 4
200-400 Crore 5
Above 400 Crore 5 or more as agreed by board
 Main Duties of Lead Manager
 Drafting of prospectus
 Preparing the budget of expenses related to the
issue
 Suggesting the appropriate timings of the public
issue
 Assisting in marketing the public issue
successfully
 Advising the company in the appointment of
registrars to the issue, underwriters, brokers,
bankers to the issue, advertising agents etc.
 Directing the various agencies involved in the
public issue.
 Role of Lead Manager
Pre issue: Post issue:
Due diligence  Mgt of escrow a/c
Design of offer doc,  Co-ordinate non institutional
prospectus, memo… allocation
Ensure the formalities  Intimation of allocation
 Dispatch of refunds to
with SE, ROC & SEBI
Appointment with bidders
 Follow up steps-
intermediaries
Marketing strategy finalization of trading,
Dealing of instruments,
dispatch of certificates &
demat of delivery of shares
 Look at the functioning of
agencies
ASSIGNMENTS HANDLED BY
KARVY
How to avail IPO financing service
 Client has to open a Demat account with
Depository participant approved by KFSL and have
to execute the Power of Attorney (POA) in favour
of KFSL
 Client has to open a bank account with HDFC
Bank with POA in favour of KFSL(Karvy
Financial Service Ltd)
 Client has to complete KYC formalities
 Client has to enter into an agreement with KFSL
 Conclusion
 IPO’s require rigorous planning, intense time management,
a first rate team of professionals, an extremely creditable
group of executives, and an outstanding business plan. Even
if all of these elements are pulled together, the company
still must consider alternative financing plans due to
volatile market conditions. Therefore, the company should
be very pro-active by building great fundamentals as well as
a public infrastructure (such as an independent board of
directors and publication of audited financial statements).
Once public, the company must meet continuous reporting
requirements, not to mention investor scrutiny. So it’s best
to function as though you are public long before the IPO.
This will make the whole process much easier.