IPO structure
IPO structure in INDIA
Initial Public offering or stock market launch or commonly known as ‘IPO’ which takes place in primary market is a type of public offering where the shares of the stock of the companies which seeks the capital in order to finance their investments for expansion of existing structure is sold on a securities market regulated by SEBI (Securities exchange Board of India) & commonly done by privately owned companies which transforms into publicly traded company.
Steps involved in an IPO
Initial Public offering objective varies company to company. Few objectives are
Funding capital for growth
Expansion existing Projects
Diversification
Funding Joint Venture and Collaborations needs
Funding Infrastructure Requirements, Marketing Initiatives and
Financing Working Capital Requirements
Funding General Corporate Purposes
Repaying debt if enough profit is not generated & also to strengthen the Balance Sheet
Meeting Issue Expenses.
Regulatory frameworks associated with IPO
India Companies Act, 1956
Securities exchange board of India: Power to SEBI under section 55 A relating to Issue & transfer of securities.
Securities contract regulation, 1956
According to securities contract regulation rule, 1956 earlier it provides that a company can get listed with just 10 per cent holding with the public provided the minimum net offer to the public is Rs 100 crore (Rs 1 billion), a minimum of 20 lakh (2 million) shares are offered to the public in an IPO through book-building method and allocation to qualified institutional buyers is 60 per cent of the size of an issue.
But after its amendment in 2010, the minimum threshold level of public holding will be 25%for all listed companies.
Every listed company shall maintain public shareholding of at least 25%. If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum
Initial Public offering or stock market launch or commonly known as ‘IPO’ which takes place in primary market is a type of public offering where the shares of the stock of the companies which seeks the capital in order to finance their investments for expansion of existing structure is sold on a securities market regulated by SEBI (Securities exchange Board of India) & commonly done by privately owned companies which transforms into publicly traded company.
Steps involved in an IPO
Initial Public offering objective varies company to company. Few objectives are
Funding capital for growth
Expansion existing Projects
Diversification
Funding Joint Venture and Collaborations needs
Funding Infrastructure Requirements, Marketing Initiatives and
Financing Working Capital Requirements
Funding General Corporate Purposes
Repaying debt if enough profit is not generated & also to strengthen the Balance Sheet
Meeting Issue Expenses.
Regulatory frameworks associated with IPO
India Companies Act, 1956
Securities exchange board of India: Power to SEBI under section 55 A relating to Issue & transfer of securities.
Securities contract regulation, 1956
According to securities contract regulation rule, 1956 earlier it provides that a company can get listed with just 10 per cent holding with the public provided the minimum net offer to the public is Rs 100 crore (Rs 1 billion), a minimum of 20 lakh (2 million) shares are offered to the public in an IPO through book-building method and allocation to qualified institutional buyers is 60 per cent of the size of an issue.
But after its amendment in 2010, the minimum threshold level of public holding will be 25%for all listed companies.
Every listed company shall maintain public shareholding of at least 25%. If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum