National Securities Depository Limited · BSE:NSDL
National Securities Depository — Investor Presentation (July 2023)
48 slides from National Securities Depository's investor presentation, July 2023
Slide 1: Primary Market - Initial Public Offerings (IPOs)
Primary Market - Initial Public Offerings (IPOs)
Slide 2: Disclaimer
DISCLAIMER The information contained in this material is for only educational and awareness purposes related to securities market and shall be used for non-profitable educational and awareness activities for general public. No part of this material can be reproduced or copied in any form or by a
Slide 3: Flow of Presentation
Flow of Presentation Introduction to Primary Market. IPO – Initial Public Offering: How to apply for Public Issues? Rights & Responsibilities of A Shareholder. Pre – Application Analysis. Information in Offer Document. Price Discovery of Shares: Fixed Price and Book Building Mechanism.
Slide 4: Introduction to Primary Market
Introduction to Primary Market New issues market where Company/ institutions raise funds or capital from public by issuing new securities. Objective: To raise capital. Two major types of issuers of securities: - Corporate Entities (Companies) - Government (Central and State) Major types of I
Slide 5: Introduction to Primary Market
Introduction to Primary Market New Projects Objects Expansion of Up-gradation existing of projects/ Issue modernization Diversification Objects of the issue and intended utilization of funds Given by issuers in the Offer Document 5
Slide 6: Introduction to Primary Market
Introduction to Primary Market New Issues market Money Market (Primary market) Financial Securities markets Market Capital Market Secondary Markets Other forms of lending and borrowing 6
Slide 7: Primary v/s Secondary Market: Key Differentiation
Primary v/s Secondary Market : Key Differentiation Features Primary Market Secondary Market Definition Securities issued first time to Trading of already issued and listed the public. securities. Also called as New Issue Market. Post Issue Market. Price By Issuer Company in Supply and Demand Forces
Slide 8: Modes of Public issues
Modes of Public issues Issues Private Public Issues Rights Issues Bonus Issues Placements Preferential Qualified IPO FPO Issue Institutional Placement Fresh Issues Offer for sale Fresh Issues Offer for sale 8
Slide 9: Modes of Capital Issuances
Modes of Capital Issuances • Initial Public Offering. • Done by unlisted company. IPO • Fresh issue of securities/ offers its existing securities for sale/ Combination of both. • Securities issued for the first time to the public. • Paves way for listing and trading of the issuer’s securities in the
Slide 10: Modes of Capital Issuances
Modes of Capital Issuances • Done by already listed company. • Issue of shares to existing shareholders (as on a record date). Bonus Issue • Existing shareholders need not make any payment for “Bonus” shares. • Shares are issued out of the company’s free reserve or share premium account. • Issued in
Slide 11: IPO - Initial Public Offering
IPO - Initial Public Offering Process of a company to be publicly listed and traded company. IPO: Fresh issue of shares / Offer for Sale of shares by existing investors/ Combination of both. Process of IPO is as follows: Issuer files an Offer Document in prescribed format with Securities and E
Slide 12: How to apply in Public Issue?
How to apply in Public Issue? ONLINE MODE - Application Supported by Blocked Amount. ASBA - Facility provided by Self Certified Syndicate Banks (SCSBs) - Full Bid Amount blocked in the bank account of the bidder. - For a) Retail Individual Investors. UPI in ASBA b) Shareholders bidding in Sharehol
Slide 13: Rights of a Shareholder
Rights of a Shareholder • Part-owner of the company, in proportion to their holding in the company. • Right to receive corporate benefits like dividend, whenever declared. • Right to receive: - Annual Reports - Audited Financial Statements - Notices of General Meetings and other notices - Other info
Slide 14: Rights of a Shareholder
Rights of a Shareholder (subject to certain limitations/ restrictions) • Right to: - Ask questions to the board of directors. - Place items on the agenda of general meetings. - Propose resolutions, etc. • Right to participate in matters needing shareholder approval like: - To vote in company proceed
Slide 15: Responsibilities of Shareholder: Stay informed!
Responsibilities of Shareholder Stay informed! ANNUAL REPORT : - Circulated to all Shareholders (via Post / Email). - Available on website of Company and Stock Exchanges. - NOTICE : for shareholder meetings with details of the agenda. - MD’s NOTE : the managing director's note in the annual report
Slide 16: Pre-Application Analysis: Broad Contours
Pre-Application Analysis : Broad Contours Product, Plant and Pricing Investors should take a well- informed decision of investing / Sustainability & Growth applying in an IPO / FPO / Scalability and Addressable Points to be Market Rights issue. considered as Business Beyond Numbers a part of pre- ap
Slide 17: Information in Offer Document - Sample Snapshots
Information in Offer Document – Sample Snapshots 17
Slide 18: Information in Offer Document - Table of Contents
Information in Offer Document – Table of Contents TIP: Before investing in any prospective offering of shares, always go through such offer documents, available on websites of SEBI and Merchant Bankers. 18
Slide 19: Information in Offer Document
Information in Offer Document About the Company: Financials Management and Promoter - Business: Company’s business Section model, strategies and - Company's income statement manufactured products/ and balance sheet. process/ services. - Background and the experience of the company’s - Understand com
Slide 20: Information in Offer Document
Information in Offer Document Objects of the Issue Capital Structure - Basic purpose of the company for - Capital formation of the company, going public and / or raising funds. - Existing shareholders and their percentage shareholdings etc. - Informs how the funds will be utilized. Basis for Issue P
Slide 21: Other key Sources of Information for Analysis
Other key Sources of Information for Analysis Minutes of the meetings ROC Filings made by of the Board / Research Reports the Company since Shareholders of the Inception; issuer company Collaboration Industry Reports; Agreements/Sharehold Credit Ratings; ers Agreements Third Party Techno Economic Re
Slide 22: Price Discovery of Shares in a Public Offering
Price Discovery of Shares in a Public Offering Mode of Price Type of Issue Discovery Fixed Price issue IPO Book Building More common Issue mode of IPO 22
Slide 23: Price Discovery - Fixed price issue
Price Discovery of Shares in a Public Offering - Fixed price issue Fixed price issue: Price at which the securities are offered and will be allocated is fixed by Company along with Merchant banker Fixed price is printed in the Offer Document, usually along with reasoning behind the price at which sh
Slide 24: Price Discovery - Fixed price issue
Price Discovery of Shares in a Public Offering - Fixed price issue Illustration of Fixed Price Issue: First page of the prospectus contains: - Number of shares to be issued - Price of issuance Price is already fixed prior to the IPO. No price discovery mechanism is used. All application for sh
Slide 25: Price Discovery of Shares in a Public Offering
Price Discovery of Shares in a Public Offering Book Built Issue: Floor Price: Lower Company may offer end of Price Band Price Band is a maximum of independent of Face Cap Price: Higher 20% price band in Value (FV) of end of Price Band which one can bid for shares. shares. Eg: Rs.100/- to Rs.120/- In
Slide 26: Stages in Book Building
Price Discovery of Shares in a Public Offering Stages in Book Building: Company who is planning an IPO appoints the Lead Merchant banker(s) as “Book Runner”. Investors give their bids for these shares to “Syndicate Members”. Bids have to be entered within the specified price band. Investor can revis
Slide 27: Illustration of Book Building issue
Price Discovery of Shares in a Public Offering Illustration of Book Building issue: Price band = Rs. 20.00 (Floor Price) to Rs. 24.00 (Cap Price) per share Total available shares (issue size) = 3,000 shares. Company received five bids from bidders as mentioned below: Bid Quantity Bid Price (Rs
Slide 28: Book Building v/s. Fixed Price Issue
Book Building v/s. Fixed Price Issue Features Fixed Price Process Book Building Process Pricing - Price at which securities are - Price at which securities will be offered /allotted is known in offered/allotted is not known in advance advance to the Investor. to the investor. - An indicative price r
Slide 29: Process Flow: Fixed Price Method
Process Flow : Fixed Price Method Receipt of In- Issuer Appoints Lead Manager files Principle Approval SEBI Registered Due Diligence Draft Prospectus from Stock Intermediary except with SEBI/Stock Exchange and Syndicate Member Exchange observations from SEBI Applicant submits Determination of applic
Slide 30: Process Flow: Book Building Method
Process Flow : Book Building Method Book Running Lead Receipt of In- Issuer Appoints Manager files Draft Principle Approval Merchant Banker, Red Herring from Stock Legal Advisor, RTA, Due Diligence Prospectus with Exchange and Syndicate Member, SEBI/Stock observations from Underwriter etc. Exchange
Slide 31: Book Building Process: Sample Form
Book Building Process : Sample Form Investors may refer this application form – filled for applying in the IPO. Only Retail Individual Bidders have the option to tick at the ‘cutoff price’. Others need to specify the price (within the price band) at which they wish to apply. Forms available
Slide 32: Sample Application Form
Sample Application Form 1 [COMPANY NAME] BID CUM APPLICATION FORM BID/ ISSUE OPENS ON: [MAY 1, 2010] [TYPE OF ISSUE] BID/ ISSUE CLOSES ON: [MAY 3, 2010] ul SCSB IFSC CODE Bid CUM APPLICATION NUMBER [name and code] [11 digit code] Jauto generated as per logical sequence] SYNDICATE MEMBER CODE BROKER
Slide 33: Sample Application Form
i Sample Application Form IX BID DETAILS (Refer instruction No. 5) Bid Options No. of Equity Shares bid (Bids must be in multiples of (@) Equity Shares) Write Price per share (Rupees)! "Cut-off" (Decimals not allowed) (Price {in figures) should be in multiples of Re. 1/- only) (in figures) Option 1
Slide 34: Sample Application Form
Sample Application Form Sample is only for illustrative purpose and may not be exactly same as actual application form 34
Slide 35: ASBA Application via Online Mode
ASBA Application via Online Mode Source : https://www.onlinesbi.com/ 35
Slide 36: IPO Application Form via UPI
IPO Application Form via UPI Create UPI ID w ith Enter UPI ID on IPO Check notification Check application Enter UPI PIN to Confirmation of any of IPO enabled Application on your BHIM UPI details and proceed approve the transaction BHIM UPI apps app and approve mandate block Source : https://www.bhim
Slide 37: Illustration for IPO Application Confirmation
Illustration for IPO Application Confirmation (From bank / Stock Broker) 37
Slide 38: Allotment Intimation, Transfer of Shares and Debit/Credit of Funds
Allotment Intimation, Transfer of Shares and Debit/Credit of Funds Basis of Allotment : - Finalized by the Company with the Lead Mangers, Registrar to Issue, and Stock Exchanges. - Published and gives details of category wise demand for shares and how shares have been allotted. Intimation of all
Slide 39: Allotment Intimation, Transfer of Shares and Debit/Credit of Funds
Allotment Intimation, Transfer of Shares and Debit/Credit of Funds Issue gets oversubscribed (demand > shares available for subscription) Shares are allotted on proportional basis / lottery system. Registrar prepares and releases the fund transfer instruction for transfer of funds to Public Is
Slide 40: Illustration for Checking Allotment and Listing Dates
Illustration for checking details of Allotment and Listing Dates These details can be found in the Section on “Offer related information – Terms of the offer”. 40
Slide 41: Illustration for Basis of Allotment
Illustration for Basis of Allotment 41
Slide 42: Checking Allotment Status and Grievance Mechanism
Checking Allotment Status and Grievance Mechanism Status of allotment/ refund related to IPO application - informed to investors by SMS/ email/ letter. - May be checked by visiting “Investor Services” section on the website of the Registrar and Transfer Agent (RTA) for the Issue on the indicativ
Slide 43: Checking Allotment Status and Grievance Mechanism
Checking Allotment Status and Grievance Mechanism Contact Details of Registrar and Transfer Agent (RTA): - Provided in Offer Document of IPO - Available on SEBI Website at: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&in tmId=10 Non-Satisfactory Resolution by RTA -> F
Slide 44: Illustration for Allotment Status (Email)
Illustration for Allotment Status (Email) 44
Slide 45: Illustration for Allotment Status on RTA Website
Illustration for Allotment Status on RTA Website 45
Slide 46: Illustration for Allotment Status (Bank / Stock Broker Website)
Illustration for Allotment Status (Bank / Stock Broker Website) 46
Slide 47: Advice to investors
Advice to investors Don’t invest with Do not deal in shares in anticipation of making Black market / Grey Invest in IPOs for the long term. quick profits on listing of Market shares. One person (identified Use your own funds to by PAN number) is apply for an IPO. Funds permitted to make only routed
Slide 48: Thank You
Thank You 48
National Securities Depository — Investor Presentation (July 2023) on 6ix