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IPO/FPO (Public Issue)
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IPO/FPO (Public Issue)

Registration with SEC
Allotment of Securities
Preferential Issue
Qualified Institutional Placement
Selection of an Investment Bank
Registration with SEBI
Assistance in Red Herring Prospectus
Pricing of IPO

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    For a company to establish itself or run, it requires funds. Even established companies require money in order to continue with their ongoing process.

    IPO/FPO are a convenient way to raise funds for a business without having to return the borrowed money. Instead, they provide ownership to the investor in form of shares or stocks. Its a good way of building attraction and making sure that the issue gets sold like candy.

    FPOs if they require additional fund but do not have the means to take a loan from the bank. if a company has already gone for IPO then they go for FPO.

    Why IPOs?

    Funding Capital Requirements for Organic Growth
    Expansions & Diversification into New Projects Funding Global Requirements or Joint Venture
    Funding Infrastructure Requirements
    Marketing Initiatives and building Distribution Channels
    Financing Working Capital
    Repaying debts to strengthen the Balance Sheet Meeting Issue Expenses For Non-funding Needs Retention and
    incentive for Employees through stock options
    Provide liquidity to the shareholders

    Eligibility Norms

    For listing a company on BSE through public offering of IPO/FPO the minimum listing requirements are as follows

    In relation to large-cap companies:

    The minimum post-issue paid-up capital of the company shall be Rs. 10 crores for IPOs & Rs.3 crore for FPOs
    The minimum issue size shall be Rs. 10 crore
    The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization to be calculated by multiplying the post-issue number of equity shares with the issue price)

    In relation to small cap companies:

    The minimum post-issue paid-up capital of the company shall be Rs. 3 crore
    Minimum issue size shall be 3 Cr
    Minimum market capitalization shall be Rs. 5 Crores
    Minimum income/turnover of the company shall be Rs. 3 Crores in preceding three 12 months period
    Minimum no. of shareholder after issue to be 1000
    A due diligence study conducted by a Charted Accountant

    Procedure for floating an IPO

    Floating an IPO is when a company is all set to issue stocks or shares to the public for the first time.
    The floating of shares can be done thru a fixed price method or book building method or a combination of both.

    Involves an Issuer Company & IPO Process Initialization

    To appoint lead manager as book runner who is the main underwriter
    Appoint registrar of the issue
    Appoint syndicate members or the appointed intermediate underwrites

    Lead manager’s pre-issue role part – 1

    Prepare draft offer prospectus document for IPO
    File draft offer prospectus with SEBI

    Review of draft prospectus by SEBI

    Revert it back to Lead Manager in case of any clarification
    If SEBI approve the draft offer prospectus, the draft offer prospectus becomes an Offer Prospectus

    Lead manager’s pre-issue role part – 2

    Submit this Offer Prospectus to Stock Exchanges, registrar of the issue and get it approved
    Decide the issue date & issue price band
    Modify Offer Prospectus that will now have a date and price band on it. This document is now called The Red Herring Prospectus.
    The Red Herring Prospectus along with the IPO Application Forms are then printed and posted to the syndicate members and through which they are distributed to the investors.

    Investor Bidding for the public issue

    Public Issue is now Open for investors bidding.
    Investors fill the application forms, place orders with the syndicate members
    Syndicate members update the BSE/NSE with the bidding information
    They also send all the physically filled forms and cheques to the registrar
    Investor can revise the bidding by filling a form and syndicate member keeps updating the latest data

    Public Issue Closes for biddings

    Based on the bids received, lead managers evaluate the final issue price and updates the
    ‘Red Herring Prospectus’ with the final issue
    The final price and send it to SEBI and Stock Exchanges.
    Document Required

    Registrar ‐ Processing IPO Applications

    Lead manager – Stock Listing

    Registrar receives all application forms & cheques
    Send the cheques for clearance and weed out all the bogus applications
    Prepare ‘Basis of Allotment’.
    Transfer shares in the Demat account of investors.
    Refund the remaining money through ECS or Cheques

    Lead manager – Stock Listing

    Once all allocated shares are transferred in investors DP accounts, the Lead Manager with the help of Stock Exchange decides Issue Listing Date
    Finally, the share of the issuer company gets listed in Stock Market.

    Get In Touch With Us

      Why MUDS

      MUDS Management & Strategic Services is a premier service that provides all kinds of corporate services to our clients. Our client’s satisfaction is our core concern and so we strive to provide a complete solution for all their consultancy and management needs. We have a team of experts from different domains working in-house and providing all solutions under one roof for prompt delivery at very competitive costs.   At MUDS, we’re committed to easing out the entire business process of our clients with our clout and a pool of the best resources available in the industry.   Floating an IPO or launching an FPO takes time and careful planning with lots of expertise from different domains. They need to hire underwriters, audit companies, attorneys for advice.

      We make the investor understand the view and objectives of such an issue and also make them acquainted with all the aspects of floating an IPO/FPO with due clarity.
      We just don’t make them plunge in for something as big as this before appraising our client with the current investment climate, performance of the industry as such and give a glimpse of the investor’s appetite
      we guide our clients thru the entire process of issuance, registration, and administration of IPO and FPOs.
      Help them in following special regulations, guidelines & rules.
      We help on overall coordination and act as an interface between the company and the SEBI/NSE/BSE
      We help In overall coordination of appointment of lead managers and the syndicate if the services are to be taken from outside
      After completing the due diligence we help finalize the disclosure document.

       

      Alternately Call our Legal Expert Now For Free Consultation at 09599653306

      Frequently Asked Questions on IPO/FPO (Public Issue)

      • We undertake fresh issue of IPO by an unlisted company
      • Listing – filing with SEBI and Stock exchanges
      • SEBI clearance and ROC guidelines
      • ROC filing of final prospectus
      • Being a facilitator between the company and the investment banking firm, assisting during underwriting service
      • Perform the task of a book runner and lead underwriters ourselves
      • Help them in IPO grading for assessment of IPO in relation to other listed IPOs
      • Helping investor decide whether to go for fixed price issue or a book built issue method of pricing based on investors demand.
      • Taking prior approval of the registrar on the right issue
      • What are all the stage-wise Documentation & process of IPO issue:
      • All documents needed in principle approval stage
      • Handling all the fast track issues
      • Book Building Issue Checklist
      • Fixed Price Issue Checklist
      • Obtaining NOC for 1% of issue amount
      • Basis of allotment Stage
      • Finalization and filing of offer document
      • Listing and Trading Approval Stage
      • documents required in rights, bonus, preferential issue checklist
      • Listing of unlisted company pursuant to amalgamation or demerger
      • Name change
      • Buyback of Equity Shares
      • Debt issue check list
      • Listing on BSE SME platform

      Yes, indeed. We make the company follow all the acts and furnish disclosures necessary while listing. Including like preparation of Letter of Application to be submitted to the stock exchange where the company wishes to be listed.Timely payment of annual listing fees, submission of results in form of P&L, balance sheet, shareholding pattern, corporate governance report etc.

      Procuring Permission to Use the Name of BSE in an Issuer Company’s Prospectus

      Completing trade permission formalities at all stock exchange and deposit of 1% issue amount

      Where do I start and what are are the initial help I can expect from MUDS?

      At MUDS, we Provide a compliance certificate on IPO/FPO, including guiding thru the formalities and procedures connected to the issuance right from Pre-IPO to Listing and complying all the regulatons connected thereof

      Issuance of a confirmation of compliance of conditions and stipulations as prescribed by SEBI is a must

      IPO Grading service aimed at facilitating the assessment of equity issues

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