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Public Issue

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PUBLIC ISSUE

IPO

Initial Public Offer• When an unlisted company makes either

a fresh issue of securities or offers its existing securities for sale or both for the first time to the public, it is called an IPO. This paves way for listing and trading of the issuer‟s securities in the Stock Exchanges.

Eligibility for IPO
• a) Net tangible assets of at least Rs. 3 crore in each of the

preceding three full years
• b) Distributable profits for at least three out of the

immediately preceding five years
• c) Net worth of at least Rs. 1 crore in each of the

preceding three full years

• d) The issue size should not exceed 5 times the pre-issue

net worth
• e) If there has been a change in the company‟s name, at

least 50% of the revenue for preceding one year should be from the new activity denoted by the new name

• Alternative routes

Recognizing that many good companies, for one reason or the other, may not be able to comply with all the eligibility norms, two other alternative routes are available to such companies:
• Alternative I:
• Issue shall be through book building route, with at least 50% to

be mandatory allotted to the Qualified Institutional Buyers (QIBs). (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 OR

• Alternative II:

• A) The “project” is appraised and participated to the extent of

15% by FIs/Scheduled Commercial Banks of which at least 10% comes from the appraiser(s).
• 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. In addition to satisfying the aforesaid eligibility norms, the company shall also satisfy the criteria of having at least 1000 prospective allottees in its issue.

Draft Offer Documents• Draft offer document is

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