CHAPTER-I

INTRODUCTION

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An initial public offering (IPO), referred to simply as an "offering" or "flotation", is when a
company (called the issuer) issues common stock or shares to the public for the first time.
They are often issued by smaller, younger companies seeking capital to expand, but can also
be done by large privately-owned companies looking to become publicly traded.

In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), best offering price and time
to bring it to market.

An IPO can be a risky investment. For the individual investor it is tough to predict what the
stock or shares will do on its initial day of trading and in the near future since there is often
little historical data with which to analyze the company. Also, most IPOs are of companies
going through a transitory growth period, and they are therefore subject to additional
uncertainty regarding their future value.

Capital market is an essential pre-requested for industrial and commercial development of a

country. Capital market refers to the institutional arrangement which facilitates the
borrowings and lending of long term fund. In capital market we can divided into two parts
they are primary and secondary market. In primary market also known as new issue market. It
represents primary market where new securities i.e. shares or bonds that have never been
previously offered. The importance of this study is analyzing the IPO scrip’s during the year
2006 to 2010. This study based on differences of Issue price and LTP. In order to whether the
IPO’s are overpriced or under priced. The investor how gets the gain or loss. The study
continued based on the only 2 parameters they are Issue price and LTP. The differences of
LTP & Issue price we can describe the scrip is overpriced or under priced. Not other
parameters considered. This study shows that sector wise scrip’s are overpriced or under
priced.
In this study find the IPO how gives the benefits and given the guidelines and
suggestions to the investor. Before selecting a company the investor should think about the
company. A good investor should diversify and reduces his risk by investing in different

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securities. Primary market returns are very attractive in short period especially on the day of
listing. But investor in IPO’s should take wise decision in choosing the best company.
SCOPE OF THE STUDY:

1) The study covers only NSE listed securities of primary market.

2) Only LTP and Issue price are taken into consideration for judging whether the scrip’s
are under priced or over priced not considering other parameters.
3) The study covers the period from year 2006-2012 only
4) Study covers randomly selected scrip’s under various sectors.

OBJECTIVES THE STUDY:

1. The objective of doing this project is mainly to make a study of trends in primary market
from 2006-2012 with special reference to LTP (Last Traded Price) and Issue Price.
2. To examine the difference between LTP and Issue Price of various scraps in different
sectors.
3. To assess whether the Issue Price are over priced or under priced based on difference
between LTP and Issue Price.
4. To examine gain or loss to the investor based on the above study.

METHODOLOGY OF THE STUDY:

The data collection methods include both primary and secondary collection methods.

Primary Data: This method includes the data collected from the personal interaction
with authorized members of ICICI.

Secondary Data: The secondary data collection method includes:

The lecturers delivered by the superintendents of respective departments.
The brochures and material provided by ICICI.
The data collected from the magazines of the NSE, economic times, NSE website, etc.
Various books relating to the investments, capital market and other related topics.

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TOOLS USED FOR ANALYSIS:

1) TABULATION: A Table is a systematic arrangement of statistical data in rows and

columns. Rows are horizontal arrangements whereas columns are vertical. Tabulation is a
systematic presentation of data in a form suitable for analysis and interpretation.
The tables used are as follows:
a) One way table: It presents only one characteristic and hence in answering one or
more independent questions with regard to those characteristics.
b) Two-way table: It contains sub divisions of a total and is able to answer two mutually
dependent questions.

2) DIAGRAMETIC AND GRAPHICAL REPRESENTATION OF DATA: A picture is

worth a thousand words. The impression created by a picture has much greater impact
than any amount of detailed explanation. Statistical data can be effectively presented in
the form of diagrams and graphs. Graphs and Diagrams make complex data simple and
easily understandable. They help to compare related data and bring out subtle data with
amazing clarity.

The Diagram used are as follows:

a) Bar diagrams: Bar diagrams are used specifically for categorical data or series. They
consist of the group of equi-distant rectangles, one for each group or category of data
in which the values of magnitudes are represented by length or height of rectangles.
b) Sample Bar diagram: It is used of comparative study of two or more aspects of a
single variable or single category of data.

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LIMITATIONS OF THE STUDY:

A good report sells the results of the study. But every project has its own limitations.
These limitations can be in terms of
1) The project doesn’t study the whole primary market due to time availability and
course requirement.
2) Project doesn’t consider whole issues under each sector due to time limitation. It
takes Into consideration randomly selected issues
3) Limited to a particular period: Data under consideration is taken from 2006-2012
Previous years are not taken into consideration.
4) Partial fulfillment: Project studied doesn’t fulfill all requirements because it does not
study the whole primary market due to time availability and course Requirement. It
only fulfills the partial requirement as it studies only certain Important aspects of
primary market.
5) Approximate results: The results are approximated, as no accurate data is Available.
6) Study takes into consideration only LTP and issue prices and their difference for
Concluding whether an issue is overpriced or under priced leaving other.
7) The study is based on the issues that are listed on NSE only.

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 CHAPTER-II

INDUSTRY PROFILE

&

COMPANY PROFILE

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Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used to
be transacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.

The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United States of Europe
was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about
200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began
(for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at Rs.
87).

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in Bombay,
the "Native Share and Stock Brokers' Association" (which is alternatively known as “The

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Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it
was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.

Other leading cities in stock market operations

Ahmadabad gained importance next to Bombay with respect to cotton textile industry. After
1880, many mills originated from Ahmadabad and rapidly forged ahead. As new mills were
floated, the need for a Stock Exchange at Ahmadabad was realized and in 1894 the brokers
formed "The Ahmadabad Share and Stock Brokers' Association".

What the cotton textile industry was to Bombay and Ahmadabad, the jute industry was to
Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After
the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which was
followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904 and
1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange
Association".

In the beginning of the twentieth century, the industrial revolution was on the way in India
with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company
Limited in 1907, an important stage in industrial advancement under Indian enterprise was
reached.

Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally
enjoyed phenomenal prosperity, due to the First World War.

In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning
in its midst, under the name and style of "The Madras Stock Exchange" with 100 members.
However, when boom faded, the number of members stood reduced from 100 to 3, by 1923,
and so it went out of existence.

In 1935, the stock market activity improved, especially in South India where there was a rapid
increase in the number of textile mills and many plantation companies were floated. In 1937,

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a stock exchange was once again organized in Madras - Madras Stock Exchange Association
(Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange Limited).

Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the
Punjab Stock Exchange Limited, which was incorporated in 1936.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was followed by a
slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.

On account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were
anxious to join the trade and their number was swelled by numerous others. Many new
associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated.

The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940)
and Hyderabad Stock Exchange Limited (1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the
Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947,
amalgamated into the Delhi Stock Exchange Association Limited.

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse during depression. Lahore Exchange
was closed during partition of the country and later migrated to Delhi and merged with Delhi
Stock Exchange.

Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963.

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Most of the other exchanges languished till 1957 when they applied to the Central
Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only
Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad and Indore, the well established
exchanges, were recognized under the Act. Some of the members of the other Associations
were required to be admitted by the recognized stock exchanges on a concessional basis, but
acting on the principle of unitary control, all these pseudo stock exchanges were refused
recognition by the Government of India and they thereupon ceased to function.

Thus, during early sixties there were eight recognized stock exchanges in India (mentioned
above). The number virtually remained unchanged, for nearly two decades. During eighties,
however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar
Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune Stock Exchange
Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock
Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh
Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989),
Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange
Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently
established exchanges - Coimbatore and Meerut. Thus, at present, there are totally twenty one
recognized stock exchanges in India excluding the Over The Counter Exchange of India
Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

The Table given below portrays the overall growth pattern of Indian stock markets since
independence. It is quite evident from the Table that Indian stock markets have not only
grown just in number of exchanges, but also in number of listed companies and in capital of
listed companies. The remarkable growth after 1985 can be clearly seen from the Table, and
this was due to the favoring government policies towards security market industry.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges is limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented

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companies with a paid-up capital of at least Rs.50 million and a market capitalization of at
least Rs.100 million and having more than 20,000 shareholders are, normally, put in the
specified group and the balance in non-specified group.

Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery
transactions "for delivery and payment within the time or on the date stipulated when entering
into the contract which shall not be more than 14 days following the date of the contract" :
and (b) forward transactions "delivery and payment can be extended by further period of 14
days each so that the overall period does not exceed 90 days from the date of the contract".
The latter is permitted only in the case of specified shares. The brokers who carry over the
outstanding’s pay carry over charges (cantango or backwardation) which are usually
determined by the rates of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional style of
face-to-face trading with bids and offers being made by open outcry. However, there is a great
amount of effort to modernize the Indian stock exchanges in the very recent times.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to many
functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long
settlement periods and benami transactions, which affected the small investors to a great
extent. To provide improved services to investors, the country's first ring less, scripless,
electronic stock exchange - OTCEI - was created in 1992 by country's premier financial
institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India,
Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation
of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.

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Trading at OTCEI is done over the centers spread across the country. Securities traded on the
OTCEI are classified into:

 Listed Securities - The shares and debentures of the companies listed on the OTC can
be bought or sold at any OTC counter all over the country and they should not be
listed anywhere else

 Permitted Securities - Certain shares and debentures listed on other exchanges and
units of mutual funds are allowed to be traded

 Initiated debentures - Any equity holding atleast one lakh debentures of a particular
scrip can offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges. That is,
certificates of listed securities and initiated debentures are not traded at OTC. The original
certificate will be safely with the custodian. But, a counter receipt is generated out at the
counter which substitutes the share certificate and is used for all transactions.

In the case of permitted securities, the system is similar to a traditional stock exchange. The
difference is that the delivery and payment procedure will be completed within 14 days.

Compared to the traditional Exchanges, OTC Exchange network has the following
advantages:

 OTCEI has widely dispersed trading mechanism across the country which provides
greater liquidity and lesser risk of intermediary charges.

 Greater transparency and accuracy of prices is obtained due to the screen-based scrip
less trading.

 Since the exact price of the transaction is shown on the computer screen, the investor
gets to know the exact price at which s/he is trading.

 Faster settlement and transfer process compared to other exchanges.

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  In the case of an OTC issue (new issue), the allotment procedure is completed in a
month and trading commences after a month of the issue closure, whereas it takes a
longer period for the same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information transparency investors
are gradually becoming aware of the manifold advantages of the OTCEI.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

(a) Wholesale debt market and

(b) Capital market.

Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper, certificate
of deposit, etc.

There are two kinds of players in NSE:

(a) Trading members and

(b) Participants.

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Recognized members of NSE are called trading members who trade on behalf of themselves
and their clients. Participants include trading members and large players like banks who take
direct settlement responsibility.

Trading at NSE takes place through a fully automated screen-based trading mechanism which
adopts the principle of an order-driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a communication network. The prices at
which the buyer and seller are willing to transact will appear on the screen. When the prices
match the transaction will be completed and a confirmation slip will be printed at the office of
the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:

 NSE brings an integrated stock market trading network across the nation.

 Investors can trade at the same price from anywhere in the country since inter-market
operations are streamlined coupled with the countrywide access to the securities.

 Delays in communication, late payments and the malpractice’s prevailing in the

traditional trading mechanism can be done away with greater operational efficiency
and informational transparency in the stock market operations, with the support of
total computerized network.

Unless stock markets provide professionalized service, small investors and foreign investors
will not be interested in capital market operations. And capital market being one of the major
sources of long-term finance for industrial projects, India cannot afford to damage the capital
market path. In this regard NSE gains vital importance in the Indian capital market system.

Preamble
Often, in the economic literature we find the terms ‘development’ and ‘growth’ are used
interchangeably. However, there is a difference. Economic growth refers to the sustained
increase in per capita or total income, while the term economic development implies sustained
structural change, including all the complex effects of economic growth. In other words,

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growth is associated with free enterprise, where as development requires some sort of control
and regulation of the forces affecting development. Thus, economic development is a process
and growth is a phenomenon.
Economic planning is very critical for a nation, especially a developing country like India to
take the country in the path of economic development to attain economic growth.

Why Economic Planning for India?

One of the major objective of planning in India is to increase the rate of economic
development, implying that increasing the rate of capital formation by raising the levels of
income, saving and investment. However, increasing the rate of capital formation in India is
beset with a number of difficulties. People are poverty ridden. Their capacity to save is
extremely low due to low levels of income and high propensity to consume. Therefor, the rate
of investment is low which leads to capital deficiency and low productivity. Low productivity
means low income and the vicious circle continues. Thus, to break this vicious economic
circle, planning is inevitable for India.

The market mechanism works imperfectly in developing nations due to the ignorance and
unfamiliarity with it. Therefore, to improve and strengthen market mechanism planning is
very vital. In India, a large portion of the economy is non-monitised; the product, factors of
production, money and capital markets is not organized properly. Thus the prevailing price
mechanism fails to bring about adjustments between aggregate demand and supply of goods
and services. Thus, to improve the economy, market imperfections has to be removed;
available resources has to be mobilized and utilized efficiently; and structural rigidities has to
be overcome. These can be attained only through planning.

In India, capital is scarce; and unemployment and disguised unemployment is prevalent. Thus,
where capital was being scarce and labour being abundant, providing useful employment
opportunities to an increasing labour force is a difficult exercise. Only a centralized planning
model can solve this macro problem of India.

Further, in a country like India where agricultural dependence is very high, one cannot ignore
this segment in the process of economic development. Therefore, an economic development
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model has to consider a balanced approach to link both agriculture and industry and lead for a
paralleled growth. Not to mention, both agriculture and industry cannot develop without
adequate infrastructural facilities which only the state can provide and this is possible only
through a well carved out planning strategy. The government’s role in providing infrastructure
is unavoidable due to the fact that the role of private sector in infrastructural development of
India is very minimal since these infrastructure projects are considered as unprofitable by the
private sector.

Further, India is a clear case of income disparity. Thus, it is the duty of the state to reduce the
prevailing income inequalities. This is possible only through planning.

Planning History of India

evelopment of planning in India began prior to the first Five Year Plan of independent India,
long before independence even. The idea of central directions of resources to overcome
persistent poverty gradually, because one of the main policies advocated by nationalists early
in the century. The Congress Party worked out a program for economic advancement during
the 1920’s, and 1930’s and by the 1938 they formed a National Planning Committee under the
chairmanship of future Prime Minister Nehru. The Committee had little time to do anything
but prepare programs and reports before the Second World War which put an end to it. But it
was already more than an academic exercise remote from administration. Provisional
government had been elected in 1938, and the Congress Party leaders held positions of
responsibility. After the war, the Interim government of the pre-independence years appointed
an Advisory Planning Board. The Board produced a number of somewhat disconnected Plans
itself. But, more important in the long run, it recommended the appointment of a Planning
Commission.

The Planning Commission did not start work properly until 1950. During the first three years
of independent India, the state and economy scarcely had a stable structure at all, while
millions of refugees crossed the newly established borders of India and Pakistan, and while
ex-princely states (over 500 of them) were being merged into India or Pakistan. The Planning

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Commission as it now exists was not set up until the new India had adopted its Constitution in
January 1950.

Objectives of Indian Planning

The Planning Commission was set up the following Directive principles:

 To make an assessment of the material, capital and human resources of the country,
including technical personnel, and investigate the possibilities of augmenting such of
these resources as are found to be deficient in relation to the nation’s requirement.
 To formulate a plan for the most effective and balanced use of the country’s resources.

 Having determined the priorities, to define the stages in which the plan should be
carried out, and propose the allocation of resources for the completion of each stage.

 To indicate the factors which are tending to retard economic development, and
determine the conditions which, in view of the current social and political situation,
should be established for the successful execution of the Plan.

 To determine the nature of the machinery this will be necessary for securing the
successful implementation of each stage of Plan in all its aspects.

 To appraise from time to time the progress achieved in the execution of each stage of
the Plan and recommend the adjustments of policy and measures that such appraisals
may show to be necessary.

 To make such interim or auxiliary recommendations as appear to it to be appropriate

either for facilitating the discharge of the duties assigned to it or on a consideration of
the prevailing economic conditions, current policies, measures and development
programs; or on an examination of such specific problems as may be referred to it for
advice by Central or State Governments.

The long-term general objectives of Indian Planning are as follows:

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  Increasing National Income

 Reducing inequalities in the distribution of income and wealth

 Elimination of poverty

 Providing additional employment; and

 Alleviating bottlenecks in the areas of : agricultural production, manufacturing

capacity for producer’s goods and balance of payments.

Economic growth, as the primary objective has remained in focus in all Five Year Plans.
Approximately, economic growth has been targeted at a rate of five per cent per annum. High
priority to economic growth in Indian Plans looks very much justified in view of long period
of stagnation during the British rule

COMPANY PROFILE
Page 18
ICICI Securities Ltd is an integrated securities firm offering a wide range of services
including investment banking, institutional broking, retail broking, private wealth
management, and financial product distribution.

ICICI Securities sees its role as 'Creating Informed Access to the Wealth of the Nation' for
its diversified set of client that includes corporates, financial institutions, high net-worth
individuals and retail investors.

Headquartered in Mumbai, ICICI Securities operates out of 66 cities and towns in India and
global offices in Singapore and New York.

ICICI Securities Inc., the step down wholly owned US subsidiary of the company is a member
of the Financial Industry Regulatory Authority (FINRA) / Securities Investors Protection
Corporation (SIPC). ICICI Securities Inc. activities include Dealing in Securities and
Corporate Advisory Services in the United States.

Page 19
ICICI Securities Inc. is also registered with the Monetary Authority of Singapore (MAS) and
operates a branch office in Singapore.

ICICI Securities Limited.

 Ms. Chanda D. Kochhar,Chairperson
 Mr. Uday Chitale
 Mr. Narendra Murkumbi
 Mr. Ketan Patel
 Mr. Pravir Vohra
 Ms Zarin Daruwala
 Mr. Anup Bagchi, Managing Director and CEO
 Mr. Ajay Saraf, Executive Director

ICICI Securities Holding Inc.

 Mr. Gopakumar Puthenveettil
 Mr. Pramod Rao
 Mr. Sriram Iyer
 Mr. Ashish Kakkar
 Mr. Raghav Iyengar
 The social initiatives program of ICICI Securities has over the years focused mainly
on two areas: providing education and health to the poor and marginalized children
from our society.
 Under the aegis of ICICI Foundation, ICICI Securities provides both financial and
volunteering support to the following two organisations:

 Door Step School - One of the most long standing associations has been with Door
Step, a NGO focused on spreading education to children residing in the slums. The
Colaba Municipal School, which is managed by the Mumbai Municipal Corporation
along with Door Step, was adopted by ICICI Securities in 2004. The firm not only
provides funds for hiring teachers, books and other educational needs but also
encourages its employees to spend some quality time with the children through

Page 20
 various activities like Diya making during Diwali or playing a cricket match with the
children.

 Muktangan - ICICI Securities has also adopted the pre-primary section of a

municipal school in Lower Parel, Mumbai. This school is run by the Paragon
Charitable Trust through their CSO called Muktangan. Managed in collaboration with
the Brihanmumbai Municipal Corporation (BMC), Muktangan conducts its classes
in English. ICICI Securities supports this educational program that offers alternatives
to orthodox educational practices

Retail
 ICICIdirect.com, won the Outlook Money ' Best e- Brokerage Award' seventh time
in a row. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009 and
2010.
 ICICI Securities' Business Partners (Sub Broker channel) won the 'Franchisor of the
Year 2011' for the third consecutive year.
 Anup Bagchi, MD & CEO has been honored with the Zee Business 'Industry
Newsmaker Award 2010' for his tremendous and unmatched contribution in the field
of Finance
 Pankaj Pandey, Head- Research - ICICIdirect has won the Zee Business Best Market
Analyst 2010 award in the Equities Fundamental Category
 CMO Asia Awards for Excellence in Branding and Marketing 2010:

o Brand Leadership Award (overall)

o 'Campaign of the Year' for the Trade Racer Campaign
o Brand Excellence in Banking and Financial Services for the store format
o Award for Brand Excellence in the Internet Business

 Frost and Sullivan 2009 Award for Customer Service Leadership

 ICICIdirect, the neighborhood financial superstore won the prestigious Franchise
India `Service Retailer of the Year 2008 award.
 ICICIdirect has also won the CNBC AWAAZ 2007 Consumer Award for the Most
Preferred Brand of Financial Advisory Services.

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  Best Broker - Web 18 Genius of the Web Awards 2007
 Franchisor of the year award 2009
 Retail concept of the year awards 2009

Institutional
 Vikash Mantri tops The Wall Street Journal's Asia's Best Analysts survey in the media
sector for 2010
 ICICI Securities is awarded as the Best Investment Bank 2008 by Global Finance
Magazine
 The Corporate Finance group also was awarded a runner-up Best Merchant Banker
by Outlook Money in 2007.
 ICICI Securities (I-Sec) topped the Prime Database League Tables 2007 for money
raised through IPOs/FPOs.
 The equities team was adjudged the 'Best Indian Brokerage House-2003' by Asia
money.

Technology
 IDG India's CIO magazine has recognized ICICI Securities as a recipient of CIO 100
award in 2009, 2010 and 2011
 ICICI Securities conferred the Gold CIO award jointly by CIOL and Dataquest at the
Enterprise Awards 2010
 Indian Bank's Association Business Technology Awards for Best Online Trading
Platform in 2006 and 2007

Special Category
 Mr Charanjit Attra, Chief Financial Officer (CFO), ICICI Securities Ltd was conferred
the 'CFO100 recognizing the Winning Edge in 2010' award by CFO India. He won the
award for the 'Winning Edge in Cost Management' category.

Legal
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or entity in any jurisdiction or country where such distribution or use would be contrary to

Page 22
law or regulation or which would subject ICICI Securities Limited ( I-Sec ) or its affiliates to
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information, nor any opinion contained in this site constitutes a solicitation or offer by I-Sec
or its affiliates to buy or sell any securities, futures, options or other financial instruments or
provide any investment advice or service.

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of the information given herein, either expressly or impliedly, for any particular purpose and
expressly disclaims any warranties of merchantability or suitability for any particular purpose.
Although the information provided to you on this website is obtained or compiled from the
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Page 23
Should you leave this site via a link contained herein, and view content that is not provided by
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Research

The information contained in the Research Reports uploaded herein has been obtained from
various sources; we do not guarantee its authenticity or validity or completeness. Neither any
information nor any opinions expressed constitute an offer, or an invitation to make an offer,
to buy or sell any securities or any derivative instruments related to such securities. Investors
should take financial advice with respect to the suitability of investing their monies in any
securities discussed or recommended in on this website and should understand that statements
regarding future prospects may not materialize. Investors should note that each security's
price or value may rise or fall and accordingly, investors may even receive the amounts,
which are less than originally invested. Past performance is not necessarily a guide to future
performance. Please carefully read the detailed disclosures given at the end of every research
report.

Contact:
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Tel: +91-22-2288 2460 /70
email: complianceofficer@icicisecurities.com

SEBI Registration details:

NSE SEBI Registration Number Capital Market: - INB 230773037 | BSE SEBI Registration
Number Capital Market: - INB 011286854
NSE SEBI Registration Number Derivatives: - INF 230773037 | NSE SEBI Registration
Number Currency Derivatives: - INE 230773037

Page 24
ICICI Securities empowers over 2 million Indians to seamlessly access the capital market
with ICICIdirect.com, an award winning and pioneering online broking platform. The
platform not only offers convenient ways to invest in Equity, Derivatives, Currency Futures,
Mutual Funds but also other services Fixed Deposits, Loans, Tax Services, New Pension
Systems and Insurance are available. ICICIdirect.com offers a convenient and easy to use
platform to invest in equity and various other financial products using its unique 3-in-1
account which integrates customers saving, trading and demat accounts.

Apart from convenience, ICICIdirect.com also offers access to comprehensive research

information, stock picks and mutual fund recommendations among other offerings. Tailored
services and trading strategies are available to different types of customers; long term
investors, day traders, high-volume traders and derivatives traders to name some.

ICICIdirect.com uses the most advanced commercially available 128-bit encryption

technology enabled Secure Socket Layer (SSL), to ensure that the information transmitted
between the client and ICICIdirect.com across the internet is safe and cannot be accessed by
any third party.

ICICIdirect.com is the first broker in India to introduce `Digitally Signed Contract Note' to its
customers. As a result, the process of generating contract notes has been automated and the
same would be instantly available to its customers in a safe and secure manner through the
website.

ICICI Securities has set-up neighborhood financial stores which offer a variety of financial
products and services under one roof. It is a one-stop shop that facilitates existing and
potential customers to speak to our team and understand their financial plans and goals. ICICI
Securities has 250 stores across 66 cities in India.

Another unique concept called the ICICIdirect Money Kitchen was launched in late 2009. An
extension of the superstore model, the money kitchen is an innovative financial store where
visitors can create their profiles to not only analyze their investment strategy by using various
financial tools but also monitor it from time-to-time.

Page 25
To enable our customers to maximize their returns and plan for their future, ICICIdirect has
also started financial planning services at these stores. Customized financial plans can be
created for our customers by dedicated Relationship Managers who will understand the
customer's requirements and future goals.

Based on this information, the Relationship Manager works on creating a comprehensive and
easy-to-read financial plan. This enables ICICIdirect to move from just a transactional based
relationship to a meaningful and value-added long-term relationship with our customers.
ICICIdirect? S services and offerings evolve according to the customer's ever changing
requirements and goals.

Customers can walk-in to the financial superstores for products like ICICIdirect 3-in-1 online
trading account, equities, mutual funds, IPO, Life and General insurance, Fixed Deposits and
many other financial products. The stores also conduct periodic training sessions on markets
and demo sessions of the trading website

ICICI Securities understands the need for insightful research to make the right investment
decision. An independent equity research team provides strong and timely updates to ensure
that customer can avail of market opportunities.

The research team focuses on both large cap as well as small and mid-cap. Large cap
companies provide an overview of industry environments, while small and mid-cap
companies are chosen 'bottom-up', providing a unique perspective to a generally under-
researched end of the market. The focus is on identifying companies, which we believe are
likely to generate wealth for investors on a sustained basis through in-depth fundamental
research.
We cater to the entire gamut of investment and return horizon requirements of an investor
through our flagship offerings like Detailed Company Report, Pick of the Week, Model
Portfolio, Stock on the Move, Daily & Weekly derivatives, Intra-day calls, Daily, Weekly &
Monthly Technical with a regular update on the performance of our calls.

Page 26
The Active Trader Service is an innovative offering from ICICI Securities which is ideal for
those who are truly 'born traders'.

As a customer of the Active Trader Service, we assure you truly personalized service with a
dedicated relationship manager assigned to your account.

We have also set up a special research team who is focused on helping you achieve your
targets .The research team has developed a robust set of research products to help you make
informed investment decisions, depending on your risk profile, by analysing derivative market
cues and other news as well as market and corporate information.

Some of the research products which we offer are as follows : Positional Calls, Technical
Picks, Momentum Picks, Roll Over Monitor, Open Interest Insight, Special Situation
Arbitrage, Pair Calls.

The Equity Advisory Group (EAG) is a team of advisors dedicated to providing customers
personalized advisory services. It is aimed at maximizing the customer's investment returns
and keeping him updated on the stock markets and the economy.

A Personal Equity Advisor will closely monitor the client's portfolio and keep him updated on
the latest happenings in equity market with the help of our fundamental and technical
research.

EAG services are customized according to the client's risk appetite and investment horizon. A
personal equity advisor, backed by our research team, provides the customer with timely
advice on the stock market.

The Wealth Management Group is a team of specialists who offer specific advisory services
to meet both personal and business wealth requirements of HNIs.

The team creates customized strategies to meet Customer's investment goals of wealth
accumulation, wealth preservation and liquidity. In addition to mutual funds, fixed deposits
and other traditional products, we also offer alternate investment avenues of Private Equity,

Page 27
Structured / Customized products for investors with specific views on the markets and
Portfolio Protection Strategies for large investors.

The attempt is to bring world class investment products to our customers through over 15
centres of ICICIdirect.

ICICI Securities is the member of NSE & BSE and registered as Broker. It provides business
opportunity to entrepreneurs by registering them as Sub-Brokers / Authorised Person. ICICI
Securities provides trading terminals through which the Sub-broker can offer a range of
financial products like Equities, Derivatives, Currency Derivatives, IPO, MF, Bonds, Fixed
Deposits etc.

Another way to get associated with ICICI Securities, As an Independent financial Advisor and
gain access to a wide range of financial products like MF, IPOs, Bonds, Corporate Fixed
Deposits.

One can also be associated as an Investment Advisor to sell a range of financial products like
IPO, Bonds, Fixed Deposits, etc. to their set of customers. In addition, they cal also sell asset
products like Home Loans, Education Loans, etc. to the customers.

ICICI Securities facilitates access to capital for the growth engine of the Indian economy
which is the corporate sector including large, medium and small enterprises; both from the
public and private markets.

ICICI Securities' engagements include Equity Capital Markets, Private Equity Intermediation
and Public Issuance of Debt.

A team of professionals, which is organized by sector helps clients assess their business
models and advises them on specific financing alternatives. The company's advice is based on
the specific circumstances and strategic considerations relevant to the client.
ICICI Securities is a SEBI registered Category I Merchant Banker

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Key Recent Deals
In FY2010, ICICI Securities has helped companies raise ~ US$ 1.86 billion through QIPs and
IPOs. (Source: Prime Database).

Some of the recent transactions for FY2010 and FY 2011 include:

IPOs

 Jaypee Infratech: In 2010, Book Running Lead Manager, Rs. 22.6 bn

 A2Z Maintenance & Engineering Services: In 2010, Book Running Lead Manager,
Rs. 8.6 bn
 Punjab & Sind Bank: In 2010, Book Running Lead Manager, Rs. 4.7 bn
 Nitesh Estates: In 2010, Book Running Lead Manager, Rs. 4.1 bn
 Shree Ganesh Jewellery House:: In 2010, Book Running Lead Manager, Rs. 3.7 bn
 Claris Life Sciences : In 2010, Book Running Lead Manager, Rs. 3 bn
 Parabolic Drugs: In 2010, Book Running Lead Manager, Rs. 2 bn
 Commercial Engineers & Body Builders Co: In 2010, Book Running Lead
Manager, Rs. 1.7 bn
 Adani Power: In 2009, Book Running Lead Manager, Rs. 30.2 bn
 JSW Energy: In 2009, Book Running Lead Manager to the IPO of Rs. 27 bn
 Godrej Properties: In 2009, Book Running Lead Manager, Rs 4.7 bn

Indian Depository Receipts (IDRs)

 Standard Chartered: In 2010, Syndicate Member? first-ever issuance of an IDR, Rs.

24.8 bn

FPOs

 NTPC: In 2010, Book Running Lead Manager, Rs 84.8 bn

 Power Grid Corp. Of India: In 2010, Book Running Lead Manager, Rs 74.4 bn
 Rural Electrification Corporation: In 2010, Book Running Lead Manager, Rs 35.3
bn

Page 29
  Shipping Corporation Of India: In 2010, Book Running Lead Manager, Rs 11.6 bn
 Engineers India: In 2010, Book Running Lead Manager, Rs 9.6 bn

Public Issue of Debt

 Shriram Transport Finance Company: In 2010 & 2009 , Lead Manager, Rs 15 bn
 L &T Infrastructure Finance Company: In 2010, Lead Manager, Rs 2.6 bn

QIPs

 Adani Enterprises: In 2010, Book Running Lead Manager, Rs. 40 bn

 GMR Infrastructure: In 2010, Lead Manager, Rs. 14 bn
 Lanco Infratech: In 2009, Book Running Lead Manager, Rs. 7.3 bn
 Alok Industries : In 2010, Book Running Lead Manager, Rs. 4.2 bn
 Network18 Media & Investments: In 2009, Book Running Lead Manager, Rs. 2 bn
 3I Infotech: In 2010, Book Running Lead Manager, Rs. 1.8 bn
 Texmaco: In 2009, Sole Book Running Lead Manager, Rs. 1.7 bn
 Adhunik Metaliks: In 2009, Book Running Lead Manager, Rs. 1.4 bn

Rights Issues

 Adani Enterprise: In 2010, Lead Manager, Rs. 14.8 bn

 IBN18 Broadcast: In 2010, Sole Lead Manager, Rs. 5.1 bn
 Television Eighteen India: In 2009, Lead Manager, Rs. 5.04 bn
 Infomedia18 : In 2009, Lead Manager, Rs. 1 bn Open Offer
 Fame India : In 2010, Sole Manager to the Offer, Rs. 1.8 bn
 Zenotech Laboratories : In 2010, Sole Manager to the Offer, Rs. 1.1 bn
 OCL Iron & Steel : In 2009, Sole Manager to the Offer, Rs. 0.56 bn

Delisting

 Sulzer India : In 2010, Sole Manager, Rs. 0.81 bn

 Lotte India Corp: In 2009, Sole Manager, Rs. 0.4 bn
 Avery India : In 2009, Sole Manager, Rs. 0.29 bn

Page 30
Landmark Transactions

 Tata Motors: First Rights Issue of shares with Differential Voting Rights
 Tata Capital: First public issue of secured Non Convertible Debentures (NCD)
 Daiichi Sankyo Co: Sole Managers to the one of the largest open offers of Rs 68.2 bn
 Bharti Airtel: First 100% Book-Built IPO in India
 HP: First delisting transaction in Indian markets using the Reverse Book-building
mechanism
 Punjab National Bank: Initiated the Book Building mechanism for Public Sector
Banks
 NTPC: First FPO under alternate book building (French Auction) route
 Network 18 : First Rights Issue done on the basis of Partly Convertible Cumulative
Preference Shares with a three in one structure
 Television Eighteen : First IPO of a News Channel
 Maruti Suzuki: First Government Of India Divestment through IPO
 Sify: Sponsored ADR of an unlisted Indian company
 Man Industries (India): The first Indian offering on the Dubai Financial Exchange to
tap liquidity in the Middle East
 Infoedge India (Naukri.com): First IPO of a pure-play Internet Company in India

ICICI Securities assists global institutional investors to make the right decisions through
insightful research coverage and a client focused Sales and Dealing team. A dedicated and
specialized research team ensures flow of well thought-out and well-researched stock ideas
and portfolio strategies.

The Sales and Dealing team has demonstrated strong sales and execution capabilities of
actionable ideas to clients which have resulted in good relationships across geographies.
ICICI Securities enjoys the first mover and market leader advantage in the derivatives
segment and offers the entire spectrum, from set-up to trading strategy.

Page 31
The equity group leverages research and distribution reach to domestic and foreign
institutional investors in case of public offerings.

The research team tracks over 15 key sectors of the Indian economy and publishes in-depth
research reports every year. The equity group acts as a bridge for institutional investors and
corporate clients with the markets.

ICICI Securities is the first domestic Investment Bank to organize theme based conferences in
New York, Shanghai, Singapore & Hong Kong.

CHAPTER-III

Page 32
 LITERATURE REVIEW

This project focuses on the relatively unexplored area of primary equity markets in India.
Its broad goal is to begin the process of understanding how and why primary markets
develop.
Primary markets are where the firms raise capital through the issuance of financial
securities traded after insurance. The research will examine the development of domestic
primary market, focusing on macro economic factors. With the abolition of Control over
Capital Issues prior approval of capital issue proposals by companies has been dispensed
with. The companies are required now to be fair and honest to the investing public by
disclosing all material facts along with the risk factors associated with their projects to the
public. The present practice of brochure which is circulated widely to the investors along
with application form has been replaced with abridged prospectus to be attached to the
New Issue application forms.

The word “market” can have different meanings but it is used most often as a catchall
term to denote both primary and secondary market. Infact primary market and secondary

Page 33
market are both distinct terms that refers to the market where securities are created and the
one in which they are traded among investors respectively. Knowing the functions of
primary and secondary market is the key to understanding how stocks trade. Without
them, the stock market would be much harder to navigate and much less profitable. We
will help you to understand how these markets work and how they relate to individual
investors.
The primary market is that part of capital markets that deals with issuance of new
securities. Companies, government or Public sector institutions can obtain funding
through the sale of new stock or bond issue. This is typically done through a syndicate of
securities dealers .The process of selling new issues to the investors is called
Underwriting. In the case of new stock issue, this sale is called an IPO (Initial public
offering). Dealers earn a commission that is built into the price of the security, though it
can be found in the prospectus.

The market in which investors have the first opportunity to find a newly issued security.
After the first purchases, subsequent trading is said to occur in secondary market. The
primary market is where securities are created. It is in this market that firms sell (float)
new stock and bonds to the public for the first time. For our purposes, you can think of a
primary market as being synonymous with an IPO. Simply put, an IPO occurs when a
private company sells stocks to the public for the first time.

METHODS OF FLOATING NEW ISSUES:

The various methods which are used in floatation of new securities in the new issue
market are
1) Public Issue / Offer through Prospectus
2) Offer for sale
3) Private Placement
4) Right Issues
5) Stock Exchange Pricing

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6) Subscription by inside coteries

1) PUBLIC ISSUES: This is the most common method followed by joint stock
companies to raise capital through the issue of new securities. Under this method, the
issuing company directly offers to the general public or institutions a fixed number of
shares at a stated price through a document called prospectus.
The purpose of raising the new capital is to finance some capital expenditure,
it is usual for companies to issue a prospectus inviting the public to take up the new
securities. Legally no public limited company can raise capital from public without
issuing prospectus.
2) OFFER FOR SALE: Under this method the company sells the shares /securities to
the issue house / brokers at an agreed price . The issue house/brokers sell their
shares / securities to the investors at a higher price.
The company is relieved from the problem of printing and advertisement of
prospectus and making allotment of shares . Offer for sale is not common in India
3) PRIVATE PLACEMENT: The promoters sell their shares to their friends , relatives
and well wishers to obtain the minimum subscription which is a precondition for issue
of shares to the public.
Once this precondition for issue of shares is met , the issue house/brokers buy
the securities out right with the intention of placing them with their clients afterwards.
The issue house/brokers maintain their own list of clients and through
customer contact sell the securities. The main disadvantage of this method is that the
securities are not widely distributed to the large section of investors.
4) RIGHT ISSUES: Rights issue is a method of raising funds in the market by an
existing company. A right means an option to buy certain securities at a certain
privileged price within a specified period.
Shares so offered to the existing shareholders are called Right shares. Right
shares are offered to the existing shareholders in a particular proportion to their
existing shareholders. The company should abide with section 81 of the companies
act.

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 If the shareholders fail to take the Right shares within a specified period, the
balance is to be equally distributed among applicants for additional shares. Any
balance still left over may be disposed off in the market.
5) STOCK EXCHANGE PLACING: this method has been discontinued in India due to
strict regulations and statutory rules for listing of securities. According to it, “A
company used to place its shares privately with the aid of brokers, and then secured
permission for dealing on stock exchange”. This method involved little cost but often
led to concentration of new shares in few hands.
6) SUBSCRITION BY INSIDE COTERIES: when a company goes to the new issue
market a certain percentage of the capital is kept in reserve for subscription by inside
coteries.
SEBI GUIDELINES FOR NEW ISSUE MARKET:
The SEBI guidelines for different category of companies are as follows
A) NEW COMPANY: A new company is a company which has not completed twelve
months of production and where the promoters do not have a track record. These
companies have to issue shares only at par.
B) PRIVATE AND CLOSELY HELD COMPANIES: These companies having a track
record of consistent profitability for last three years, are permitted to price their issues
freely.
C) EXISTING LISTED COMPANIES: The existing limited companies will be allowed
to raise fresh capital by freely pricing its shares provided the promoters contribution is
50% on first 100 crores of issue.
D) DIFFERENTIAL PRICING: Issue to the public can be priced differentially as
compared to issue to right shareholders justification for the price difference should be
mentioned in the offer document.
E) LOCK IN PERIOD: Lock in period is five years for promoters contribution from the
date of allotment or from commencement of commercial production whichever is
later.
F) GUIDELINES FOR PUBLIC ISSUE:
 Every application should be accompanied with an abridged prospectus.

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  The risk factors should be highlighted in the abridged prospectus.
 Company’s management, Past history and present business of the firm should
be highlighted in the prospectus.
 Justification for premium should be stated
 The public issues should be kept open for a minimum of three days and a
maximum of ten working days.
 The quantum of issue should not exceed the amount specified in the prospectus
 Compliance report in the prescribed form should be submitted to SEBI within
forty five days from the date of closure of issue.
 The allotment of shares has to be made in multiples of tradable lots if the
minimum of subscription of ninety percent has not been received the entire
amount is to be refunded to the investors within 120 days.
 Underwriting has been made mandatory
 The gap between the closure date of various issues i.e. rights and public should
not exceed thirty days.

RECENT TRENDS AND DEVELOPMENTS IN NEW ISSUE MARKET:

The recent economical changes i.e. privatization, liberalization, foreign private

participation, disinvestment in public sector have given a new direction to the capital market.
The number of issues made and the amount of capital raised from the market has been
phenomenal in the last decade. The public sector organizations like financial institutions,
public sector undertaking have started dominating the primary market. In 1996-97, all public
financial institutions including IDBI, IFCI, ICICI and many public sector backs have
mobilized resources through public issue route. There is a major decline in the equity at
premium issues over the years.

Page 37
CAPITAL MOBILISED THROUGH DEBT: the late 90’s have witnessed the bent of
capital market for the issue of debt as that period is characterized with high interest rates and
negative returns from the secondary market.
MUTUAL FUNDS: New mutual funds were set up during the last decade. Many investors
are turning towards mutual funds to take the advantage of expertise in investments and
lowering of investment risk.
SEBI has dispensed with the requirement of a minimum promoters contribution and lock
in for listed companies with a three year dividend track record in the past five years
The lock in period for employees in their stock option schemes was withdrawn but
lock in will still apply to any preferential allotment made to promoters. The pricing of such
issues would be based on market prices.
The market reforms include the introduction of electronic trading with the setting up
of OCTEI and NSE.th process of Book building was encouraged and IPO through Book
building has picked up.
Credit rating was made mandatory for some issues. This step has built the customer
confidence in the market. Qualitative changes included the introduction of new innovative
financial instruments. Certain innovative financial instruments were designed to suit the
investor’s requirement. With the globalization of business, foreign markets have welcomed
Indian companies. The Indian companies have issued GDR (global depository receipts) and
ADR (American depository receipts) , foreign currency bomds , euro currency bonds etc.

TO SUGGEST GUIDELINES TO INVESTORS:

1. The investor should purchase the shares after a detailed study about the company.
(That includes fundamental analysis, economical analysis and technical analysis.)

2. Liquidity and intrinsic value of the scrip should be high.

3. The investor should have a clear idea about the financial position, than determine an
appropriate allocation mix of the assets, which maximizes the returns.

Page 38
4. An easy solution to investor is to invest in to mutual fund schemes through a
systematic investment plan (sip) the mutual fund gives you a well diversified,
professionally managed portfolio at low cost

5. Investor need to develop a long term investment mindset rather than short term
investment to get more returns or for achieving financial goals

6. Investor’s emotions and judgment plays a dynamic role in investment process. The
investor should control his emotion and impatience and he should take strong decision

7. A good investor should diversifies and reduces his risk by investing in different
securities which contained different risks and returns in order to achieve his goals

8. The investor should understand the market psychology apart from fundamental
analysis. Because these psychological factors have a greater impact on market.

9. The investor must to review and revise the portfolio periodically. Based on
circumstances he should change the production of the stock

10. Investor need to aware of new information, which reflects wider changes in share
prices.

11. The investor can get certain tax benefit from investing in stock markets

a) Investment on government fixed deposits

b) Dividend on certain shares

c) UTI units

12. If investor wants to manage their investment aggressively, you have to monitor
important developments affecting the economy, various industrial sectors, and
individual companies. Investor has to develop sound standards for selecting growth
stocks and hold growth stocks as long as they remain growth stocks

Page 39
13. For purchasing stock of any company the investor to analyze the potentiality or
worthiness of the product, profitability, treatment of HR, innovative ideas of the
company, integrity

14. Avoid certain kinds of shares for ex; shares of unlisted companies

15. Participate in different schemes of mutual funds and high liquidity stocks.

Investors more crazy about the new issues because:

i. The issues are often offered at par and they feel they are getting shares at
“reasonable price”

ii. If the company does well their capital appreciation and premium will be
more

iii. But before selecting a company the investor should think about that
company in a following way

iv. What is track record of the company

v. Is there adequate assurance of the availability of inputs

vi. How strong they are developing the market for product

vii. What are the competitions etc… need to analyze.

PROBLEMS OF NEW ISSUE MARKET:

The problems of new issue market can be summarized as follows:
A) The new issue market failed to mobilize adequate savings from the household sector.
Only 10 % of the financial savings was mobilized. One reason for such failure is lack of
awareness among these sector and private placement of capital by the companies.
B) The new issue market has failed to communicate to the public the benefits of
investing in new instruments.

Page 40
C) Merchant banks have failed to bridged the gap between the investors and the
companies . They have failed to evaluate the projects taken up by companies, credentials
of promoters, technical and managerial aspects, etc. this has led to customers being duped
by companies. SEBI has now brought out stringent guidelines for companies and
merchant bankers.
D) Investment in capital markets are considered to be risky. So the risk averse attitude of
customer have diverted the investment from shares to fixed deposits and debentures.
E) Abnormally high cost of flotation has kept away small companies from the primary
market.
F) NIM has not reached to the semi urban and rural areas. An investor from this region
has to spend additional cost for post and bank charges to access the NIM.
G) Delay in allotment of shares, refunding of application money, posting of share
certificates etc are common anomalies in NIM
H) New companies failed to gain the favor of underwriter. Caution investors have stayed
away from new companies, which led to devolution on underwriters.
I) Timing of an issue is very important. But companies failed to keep an eye on the other
issues which are made during the same time. Thus crowding of new issues at one time
has made the investor to select the one which he considered to be worthy.
INITIAL PUBLIC OFFERING

IPO is an acronym for initial public offering. This is the first sale of stock by a company to the
public. A company can raise money by issuing either debt or equity. If the company has never
issued equity to the public, it is known as an IPO. Corporate may raise capital in the primary
market by way of an IPO, right issue or private placement.
Companies fall into two broad categories private and public. A privately held company
has fewer shareholders. Anybody can come out and incorporate a private company, put in
some money file the right legal documents and follow the reporting rules. Most small
businesses are privately held, but large companies can be private too. IKEA, Domino’s pizza
and Hallmark cards are all privately held. It usually is not possible to buy shares in private
company. The shares of private company are not offered to general public.

Page 41
 On the other hand public companies can sold at least a portion of themselves to the
public and trade on stock exchange. This is why doing an IPO is also referred to as going
public. Public companies have thousands of share holders and are subjected to strict rules and
regulations.
WHY GO PUBLIC?
Going public raises cash , being publicly traded also opens many financial doors .Because of
increased scrutiny public companies can usually get better rates when they issue debt. As long
as there is a market demand a public company can always issue more stock.
Trading in open market means liquidity. Being on a major stock exchange carries a
considerable amount of prestige. In past companies with strong fundamentals could only
qualify for an IPO, but Internet boom changed all this. Firms no longer needed strong
financial and a solid history to go public. Instead, IPO’s were done by smaller start ups
seeking to expand their business. There is nothing to worry for expansion of IPO but most of
these firms had never made a profit and didn’t plan on being profitable any time. In cases like
this companies might be suspected of doing an IPO just to make the founders rich. The IPO
then becomes the end of the road rather than beginning.
How can this happen? Remember an IPO is just selling stock; it is all about the sales
job. If you can convince people to buy stock in your company, you can raise a lot of money.
In our opinion IPO’s came just to collect money are extremely risky and should be avoided.

IPO BASICS: HOW TO GET INTO AN IPO?

1) UNDERWRITING PROCESS: Getting a piece of a hot IPO is very difficult, if not

impossible. To understand why we need to know how an IPO is done, a process known as
underwriting.
When a company wants to go public, the first thing it does is hire an investment bank.
A company could theoretically, sell its shares on its own but realistically, an investment bank
is required. Underwriting is the process of raising money by either debt or equity. Underwriter
acts as a middleman between companies and the investing public.
The company and the investment bank will first meet to negotiate the deal. Items
usually discussed includes the amount of money company will raise, the types of securities to

Page 42
be issued and all details in underwriting agreement. The deal can be structured in a variety of
ways. For example, in a “firm commitment” deal the underwriter guarantees that a certain
amount will be raised by buying the entire offer and then reselling to the public. In a “best
effort” deal the underwriter sells the securities, but doesn’t guarantee the amount raised.
Once all sides agree to deal, the investment bank puts together a registration statement
to be filed with SEC, governing bodies. This document contains information about offering as
well as company information such as financial statements, management background, legal
problems and insider holdings. The SEC then requires a “cooling off period” in which they
investigate and make sure all material information has been disclosed. Once SEC approves
the offering, a date is set when the stock will be offered to the public.
During the cooling off the period the underwriters put together what is known as red
herring. This is an initial prospectus containing all information about the company except for
the offer price and effective date , which aren’t known at the time with the red herring in hand
, the underwriter and the company attempt to hype and build up interest for the issue. They
go on a road show also known as “the dog and pony show” where the big institutional
investors are courted.
As an effective date approach the underwriter and company sit down and decide on the
price. This is not an easy decision; it depends on the company, the success of the road show
and most importantly current market conditions. Of course it is in both parties interest to get
as much as possible. Finally the securities are sold on the stock market and money is collected
from investors.

2) INDIVIDUAL INVESTOR: As you can see, the road to an IPO is a long and complicated
one. You may have noticed that individual investors are not involved until the very end,
because small investors are not the target market. They do not have more cash and therefore
hold little interest for the underwriters. If the underwriters think that an IPO will be successful
they will usually pad the pockets of their favorite institutional client with shares at IPO price.
The only way for individual investor to get shares is to have an account with one of the
investment banks that is part of the underwriting syndicate. But an individual cannot expect to
open an account with $1000 and be showered with an allocation. He has to be frequently
trading client with a large account to get into a hot IPO.

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POINTS TO BE CONSIDERED TO GET INTO AN IPO:
1) NO HISTORY: It’s hard enough to analyze the stock of an established company. An IPO
company is even trickier to analyze since there won’t be a lot of historical information. The
main source of data is Red herring prospectus, so make sure you examine this document
carefully. Look for the usual information but also pay special attention to the management
team and how they plan to use the funds generated from an IPO.
2) LOCK UP PERIOD: If you look at the charts following many IPO’s, you will notice that
after few months the stock takes a sleep downturn, this is often because of lockup period.
When a company goes public, the underwriters make company officials and employees sign a
lock up agreement. Lock up agreements are legally binding contracts between underwriters
and insiders of the company, prohibiting them from selling any shares of stock for a specified
period of time. The period can be anything from 3 to 24 months. 90 days is minimum period
stated under rule, but lockup specified by the underwriters can last much stronger. The
problem is when lockups expire all the insiders are permitted to sell their stock. The result is a
rush of people trying to sell their stock to realize their profit. This excess supply can put
severe downward pressure on the stock price.
3) FLIPPING: Flipping is reselling a hot IPO stock in the first few days to earn a good profit.
This is not easy to do and you will be strongly discouraged by your broker. The reason behind
this is that, the companies want long term investors who hold their stock, not traders. There
are no laws that prevent flipping, but your broker may black list you from future offering or
just smile less when you shake hands.
4) Of course, institutional investors flip stocks all the time and make big money. The double
standard exists and there is nothing we can do about it as they have buying power. Because of
flipping, it is a good rule not to buy shares of an IPO if you don’t get in on the initial offering.
Many IPO’s that have big gains on the first day will come back to earth as the institutions take
their profits.
5) AVOID THE HYPE: It’s important to understand that underwriters are salesmen . The
whole underwriting process is intentionally hyped up to get as much attention as possible.
Since IPO’s only happen once for each company, they are often presented as “once in a

Page 44
lifetime” opportunities. Of course some IPO soar high and keep soaring. But many end up
selling below their offering prices within the year. Don’t buy a stock because it is an IPO do it
because it is a good investment.

BOOK BUILDING PROCESS:

The abolition of the capital issues control act, 1947 has brought a new era in the primary
market in India. The control over the pricing of the issues, designing and tenure of capital
issues were abolished. The issuers at present are free to make the price of issue. The main
drawback of pricing was the process of pricing of issues. The issue price was determined
around 60 to 70 days before the opening of the issue and the issuer had no clear idea abut the
market perception of the price determined. The traditional fixed price method of tapping
individual investor from two defects

1) Delay in initial public process.

2) Under pricing/over pricing of issues.

In fixed price method, public offers do not have any flexibility in terms of prices as well as
number of issues. From experience it can be stated that a majority of the public issues come
through fixed price method are either underpriced or overpriced. Retail investors are unable to
distinguish good issues from bad one. That is why book building mechanism, a new (product)
process of price discovery has been introduced to overcome this limitation and determine
issue price effectively.
SEBI guidelines defines book building as a process undertaken by which a demand for the
securities proposed to be issued by a corporate body is elicited and build up and the price for
such securities is assessed for the determination of the quantum of such securities to be issued
by means of a notice, circular, advertisement, document or information memoranda or offer
document.
Book building is basically a capital issuance process used in IPO which aids price and
demand discovery. It is a process used for marketing a public offer of equity shares of a
company. It is a mechanism where during a period fro which a book for IPO is open, bids are
collected from the investors at various prices, which are above or equal to the floor price. The

Page 45
process aims at tapping both wholesale and retail investors. The offer/issue price is then
determined after the bid closing date based on certain evaluation criteria.
FEATURES OF BOOK BUILDING PROCESS:

1) Public offers in fixed price method involves a pre issue cost of 2-3 percent and carry the
risk of failure if it does not receive 90 percent of total subscription. In Book building such
cost and risk can be avoided because Issuer Company can withdraw the market if demand
for security does not exist.
2) Institutional investor like to participate largely in book built transactions as in this process
the time taken for completion of entire process is less than the fixed price issues
3) Here the price is determined on the basis of the demand received or at the price above or
equal to the floor price whereas in fixed price option the price of issues is fixed first and
then securities are offered to the investors.
4) Book is built by book running lead manager to know the everyday demand whereas in case
of fixed price of public issues, the demand is known at the close of the issue.
5) Book should remain open for minimum of 5 days.
BOOK BUILDING PROCESS IN INDIA:
The main parties who are directly associated with book building process are issuer company.
BRLM (Book Running Lead Managers) and the syndicate members. The BRLM (merchant
banker) and the syndicate members who are the intermediaries are both eligible to act as
underwriters. The steps involved in book building process are as under:
1) The issuer company proposing an IPO appoints a lead merchant banker as BRLM.
2) Initially the issuer company consults with the book running lead manager in drawing up a
draft prospectus which does not mention the price of the issues but includes other details
about the size of the issues, past history of a company and a price band. The securities
available to the public are separately identified as net offer to the public.
3) The draft prospectus is filed with SEBI which gives it a legal standing.
4) A definite period is fixed as a bid period and BRLM conducts awareness campaign
like advertisements, road shows etc.
5) The BRLM appoints a syndicate member, a SEBI register intermediary who underwrite
the issues to the extent of net offer to the public

Page 46
6) The BRLM is entitle to remuneration for conducting the book building process
7) The copy of draft prospectus may be circulated by BRLM to the institutional investors as
well as to the syndicate members
8) The syndicate members create demand and ask each investor for the number of shares and
offer price
9) The BRLM receives the feedback about the investors bid through syndicate members
10) The prospective investors may revise their bids at any time during the bi d period
11) The BRLM on receipt of feedback from the syndicate embers about the bid price and
quantity of share apply has to build up an order book showing the demand for the shares
of the company at various prices. The syndicate members must also maintain a record
book for orders received from institutional investors for subscribing to the issue of private
portion.
12) On receipt of above information, the BRLM and the issuer company decides the issue
price. This is known as market clearing price.
13) The BRLM then closes the book in consultation with the issuer company and determine
the issue size of placement portion and public offer portion.
14) Once the final price is determined the allocation of securities should be made by BRLM
based on prior commitment, investors quality, price aggression, earliness of bids etc. the
bid of an institutional bidder, even if he has paid full amount may be rejected without
being assigned any reason as the book building portion of institutional investors is left
entirely at the discretion of issuer company and the BRLM.
15) The final prospectus if filed with the registrar of companies within 2 days of
determination of issue price and receipts of acknowledgement card from SEBI.
16) Two different accounts for collection of application money, one for the private placement
portion and the other for the public subscription should be opened by Issuer Company.
17) The placement portion is closed a day before the opening of public issue through faxed
price method. The BRLM is required to have the application forms along with
application money from the institutional buyers and underwriters to the private placement
portion.
18) The allotment for the private placement portion shall be made on the second day from the
closure of the issue and the private placement portion is ready to be listed.

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19) The allotment an listing of issues under the public portion i.e. fixed price portion must be
as per the existing statuary requirements
20) Finally the SEBI has the right to inspect such records and books which are maintained by
BRLM and the intermediaries involved in the Book building process.

DIIFFERENCE BETWEEN SHARE OFFERED THROUGH BOOK BUILDING AND

THROUGH NORMAL PUBLIC ISSUE:

1) In normal public issue method the price at which the securities are offered/allotted is
known in advance to the investor whereas the price at which these securities will be
offered/allotted is not known in advance to the investor in book building process. Only
indicative price range is known.
2) In normal public issue method demand for the securities offered is known only after the
closure of the issue whereas in book building method demand for the securities offered can
be known everyday as the book is built
3) In normal issue method payment is made at the time of subscription wherein refund is
given after allocation whereas in book building method payment is made only after
allocation.
4) In book building securities are offered a t prices above or equal to the floor prices, whereas
securities are offered at a fixed price in case of normal public issues.

OFFER TO THE PUBLIC THROUGH BOOK BUILDING PROCESS

The oxford dictionary of business jumps from “bonus shares to book keeping” and
then on “book of primary entry” without devoting an entry for book building. Book building
is the process by which an underwriter attempts to offer an IPO based on demand form
institutional investors.
An underwriter “builds a book” by accepting orders from fund managers, indicating
the number of shares they desire and the price they are willing to pay. Book maker is not the
same as the book builder. The former takes bets and pays out money to the people who win.
The IPO can be made through fixed price method, book building method or a combination of

Page 48
both. In case the issuer choose to issue securities through book building route then as per
SEBI guidelines, an issuer company can issue securities in the following manner.

A) 100 percent of the net offer to the public through book building route
B) 75 percent of the net offer to the public through the book building process and 25 percent
through fixed price portion.
C) Under 90 percent scheme this percentages will be 90 and 10 respectively.

A) 100 % THROUGH BOOK BUILDING PROCESS: In the 100 percent of the net offer
to the public, entire issue is made through book building process. In case of 100 percent book
building process, the bidding centers should be at all the places where recognized stock
exchanges are situated.
B) 75 % THRUOGH BOOK BUILDING PROCESS: The option of 75 percent book
building is available through the book building process are indicated as placement portion
category and securities available to public are identified as net offer to the public. In this
option, underwriting is mandatory to the extent of net offer to the public. The issue price for
placement portion and offers to public are required to be same.
C) 90 % THROUGH BOOK BUILDING PROCESS: This option is not available in
India.

TYPES OF INVESTORS

There are three kinds of investors in book building issue. The retail individual investor
(RII), the non-institutional investor (NII) and the qualified institutional buyers (QIB). RII is
an investor who applies for stocks for a value of not more than rupees 100000. Any bid
exceeding this amount is considered in the NII category. NIIs are commonly referred to as
high net worth individuals. On the other hand QIBs are institutional investors who posses the
expertise and the financial muscle to invest in securities markets.
Mutual funds, financial institutions, scheduled commercial banks, insurance
companies, provident funds, state industrial development corporations fall under the

Page 49
definition of being a QIB. Each of these is allotted a certain percentage of total issue. The
total allotment of RII category has to be at least 35 percent of the total issue. RII also have an
option of applying at cut-off price. This option is not available to other classes of investors.
NIIs are to be given at least 15 percent of the total issue and QIBs are to be issued not more
than 50 percent of the total issue

REVERSE BOOK BUILDING PROCESS:

The reverse book building is a mechanism provided for capturing the sell orders online basis
from the shareholders through respective BRLMs which can be used by the companies
intending to delist its shares through buy back process. In reverse book building scenario, the
acquirer/company offers to buy back shares from the shareholders. The reverse book building
is basically a process used for efficient price discovery. It is a mechanism where during the
period for which the reverse book building is open offers are collected from the shareholders
at various prices, which are above or equal to the floor price. The buy back price is
determined after the offer closing date.
Business process for delisting through book building is as follows
1) The acquirer shall appoint designated BRLM for accepting offers form the shareholders
2) The company/acquirer intending to delist its shares through book building process is
identified by way of a symbol assigned to it by BRLM.
3) Orders for the offer shall be placed by the shareholders only through the designated
trading members, duly approved by the exchange.
4) The designated trading members shall ensure that the security/shareholder deposit the
securities offered with the trading members prior to the placement of an order.
5) The offer shall be open for N number of days
6) The BRLM shall intimate the final acceptance price and provide the valid accepted
order file to the National Securities Clearing Corporation Limited (wholly owned
securities of NSE carrying out clearing and responsible for settlement operation.).
SEBI guidelines shall be applicable to delisting of securities of companies and specifically
apply to:
1) Voluntary delisting being sought by the promoters of a company.

Page 50
2) Any acquisition of shares of the company (either by a promoter or by any other
person)or scheme or arrangement, by whatever name referred to, consequent to which
the public shareholding falls below the minimum limit specified in the listing conditions
or listing agreement that may result in delisting of securities.
3) Promoters of the company who voluntarily seek to delist their securities from all or
some of the stock exchanges.
4) Case where a person in control of the management is seeking to consolidate his holding
in a company in a manner which would result in the public share holdings or in the
listing agreement that may have affect of company being delisted.
5) The companies which may be compulsorily delisted by stock exchanges

Advantages of Reverse book building process

1) It provides a fair, efficient and transparent method for collecting offer using latest
electronic trading systems.
2) The NSE system offers a nationwide bidding facility in securities.
3) Costs involved in issue are far less than those in a normal IPO.

RED HERRING PROPECTUS:

A preliminary registration statement that must be filed with the SEC describing a new
issue of stock and the prospects of the issuing company.
"Red Herring Prospectus" is a prospectus which does not have details of either price or
number of shares being offered or the amount of issue. This means that in case the price is not
disclosed, the number of shares and the upper and lower price bands are disclosed. On the
other hand, an issuer can state the issue size and the number of shares are determined later. An
RHP for and FPO can be filed with the RoC without the price band and the issuer, in such a
case will notify the floor price or a price band by way of an advertisement one day prior to the
opening of the issue. In the case of book-built issues, it is a process of price discovery and the
price cannot be determined until the bidding process is completed. Hence, such details are not

Page 51
shown in the Red Herring prospectus filed with the RoC in terms of the provisions of the
Companies Act.
Only on completion of the bidding process, the details of the final price are included in the
offer document. The offer document filed thereafter with ROC is called a prospectus.
“Abridged Prospectus” means contains all the salient features of a prospectus. It accompanies
the application form of public issues.

GREEN SHOE OPTION:

In most of the case it is experienced that IPO through book building method in India turns out
to be over priced or under priced after their listing and ultimately the small investor becomes
the net loser. If the prices in open market fall below the issue price, small investors may start
selling their securities to minimize losses. Therefore there was a vital need of a market
stabilizer to smoothen swing in the open market price of a newly listed shares after an IPO.
Market stabilization is the mechanism by which stabilizing agent acts on behalf of the issuer
company, buys a newly issued securities for the limited purpose of preventing a decline in the
new securities in open market price in order to facilitate its distribution to the public. It can
prevent the IPO from huge price fluctuation and save investors from potential loss. Such
mechanism is known as Green Shoe Option. Green Shoe Option can rectify the demand and
supply imbalances and can stabilize the price of the stock. It owes its origin to the green shoe
option company, which used this option for the first time in the world.
SEBI recognized GSO system of initial public 2004 August. According to SEBI
Guidelines “A company desirous of availing GSO shall pass the resolution in the general body
meeting authorizing the public issue, seek authorization, also for possibility of allotment of
further shares to the stabilizing agent. The company shall appoint one of the Lead book
runners among the issue management team as stabilizing agent, will be responsible for price
stabilization process if required.
The stabilizing agent shall enter into an agreement with the promoters who will lend
their share, specifying the maximum number of shares that may be borrowed from the
promoters, which shall not be in excess of fifteen percent of the total issue size. The
stabilization mechanization shall be available for the period disclosed by the company in the

Page 52
prospectus, which shall not exceed 30 days from the date when trading permission was given
by the exchanges.
Ideally, with the intervention of the stabilizing agent the share price should not fall
below the issue price for a period of 30 days from the listing date. Due to this option, the
investor has a time period of 30 days up to which he is safe and his chances of incurring the
losses are minimum.
A GSO is a clause contained in the underwriting agreement of IPO. The GSO is also
referred to as an over allotment provision, allows the underwriting syndicate to buy up an
additional 15 % of the shares at the offering price if public demand for the shares exceeds
expectations and the stock trades above its offering price.
The GSO provides extra incentive for the underwriters of a new stock offering. In
addition this investment banks, brokerages and other financing parties also often exercise the
GSO the cover some of the short position. They may have create an effort to maintain a stable
market after a new stock begins to trade as well as to meet after market demand.
AN INTERESTING FACT:
The Green shoe company was the first issuer to allow the over allotment option to its
underwriters, hence the name. The provision that has become standard in firm commitment
underwriting is the over allotment option or green shoe option. Where the company and other
sellers of securities grant and option to the underwriters to purchase additional shares (around
15 % in total offerings) on the same term as the original shares offer to the underwriters. The
GSO allows the underwriters to exercise significant market clout in stabilizing activities
during a 30 day period immediately following a public offering. The over allotment gives the
underwriters buying power to cover their short position in order to stem a falling stock price,
without the risk of having to buy stock at higher prices to cover their short position is the
stock price increases.

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 CHAPTER-IV
DATA ANALYSES AND INTERPRETATION

IPO Issues in 2012

Equity Issue Price Current Price %Gain/Loss

January-2013
Eco Friendly 25.00 25.60 2.40
December-2012
Bharti Infratel 220.00 209.90 -4.59

Page 54
PC Jeweller 135.00 141.90 5.11
CARE 750.00 820.35 9.38
Veto Switch 50.00 50.75 1.50
Tara Jewels 230.00 212.00 -7.83
November-2012
Bronze Infra 15.00 14.65 -2.33
October-2012
RCL Retail 10.00 9.70 -3.00
Anshus Clothing 27.00 31.50 16.67
September-2012
Comfort Comm 10.00 17.55 75.50
Thejo Engg 402.00 17.55 -95.63
SRG Housing Fin 20.00 21.25 6.25
Jointeca Edu 15.00 15.90 6.00
August-2012
Jupiter Infomed 20.00 24.50 22.50
Sangam Advisors 22.00 23.95 8.86
July-2012
VKS Projects 55.00 189.10 243.82
Max Alert Syste 20.00 94.95 374.75
May-2012
Monarch Health 40.00 142.50 256.25
Speciality Rest 150.00 173.40 15.60
Tribhovandas 120.00 226.25 88.54
April-2012
NBCC 106.00 158.15 49.20
MT Educare 80.00 107.60 34.50
March-2012
Olympic Cards 30.00 60.60 102.00
BCB Finance 25.00 25.00 0.00
MCX India 1032.00 1343.25 30.16
November-2011
Indo Thai Secu 74.00 10.70 -85.54
October-2011
Vaswani Ind 49.00 4.73 -90.35
M and B Switch 186.00 25.95 -86.05
Flexituff Inter 155.00 223.45 44.16
Taksheel Solut 150.00 8.36 -94.43

Page 55
INTERPRETATION:
The above table projects the difference between LTP and Issue price of different
companies in the current year and the positions in the companies are dependent on the market
value only.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Rushil Decorand Capital got highest benefit respectively.
IPO Issues in 2011

Equity Issue Price Current Price %Gain/Loss

November-2011
Indo Thai Secu 74.00 12.93 -82.53
October-2011
Vaswani Ind 49.00 10.99 -77.57
M and B Switch 186.00 68.30 -63.28
Taksheel Solut 150.00 13.53 -90.98
Flexituff Inter 155.00 249.70 61.10
Onelife Capital 110.00 299.20 172.00
Tijaria Polypip 60.00 8.94 -85.10

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Prakash Constro 138.00 131.70 -4.57
September-2011
PG Electroplast 210.00 171.00 -18.57
SRS 58.00 34.25 -40.95
TD Power System 256.00 244.05 -4.67
Brooks Labs 100.00 14.08 -85.92
August-2011
Tree House Edu 135.00 214.15 58.63
L&T Finance 52.00 48.95 -5.87
Inventure Grow 117.00 210.20 79.66
July-2011
Bharatiya Glob 82.00 8.30 -89.88
Readymade Steel 108.00 63.75 -40.97
Birla Pacific 10.00 7.01 -29.90
Rushil Decor 72.00 161.05 123.68
June-2011
Timbor Home 63.00 28.70 -54.44
VMS Industries 40.00 44.55 11.37

Page 57
INTERPRETATION:

The above table projects the difference between LTP and Issue price of different
companies in the current year and the positions in the companys are dependent on the market
value only.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Rushil Decorand Onelife Capitalgot highest benefit respectively.

TABLE SHOWING SCRIPS OF FINANCIAL SERVICES

ISSU DIFFRENCE
ISSUE PRICE
DATE OF E BETWEEN
S.NO NAME OF THE ISSUE SIZE RANG LTP
ISSUE PRIC ISSUE
(LAKHS) E
E PRICE &LTP
Motilal Oswal Financial 20/08/10- 971.2
1 services Ltd 29.8271 725-825 825 +146.20
23/8/10 0
ICRA Ltd 20/03/10-
2 25.811 275-330 330 1030 +700
23/03/10

Page 58
 Power finance 31/01/10- 200.9
3 Corporation Ltd 1173.167 73-85 85 +115.90
06/02/10 0
Transwarranty Finance 23/01/10-
4 Ltd 60 48-55 52 29.15 -22.85
02/02/10
Emkay share&stock 31/03/09- 140.1
5 brokers Ltd 62.50 100-120 120 +20.10
07/04/09 0
Mahindra&Mahindra 21/02/09- 233.9
6 Financial services Ltd 200 170-200 200 +33.95
24/02/09 5
Infrastructure
development Financial 15/07/08- 140.1
7 4036 29-34 34 +106.10
co. Ltd 22/07/08 0

IL&FS Investment Ltd 4/07/09- 194.1

8 114 110-125 125 +69.10
08/07/09 0
India Infoline Ltd 21/04/08- 118.7813 849.5
9 70-80 76 +773.50
27/04/08 8 0
Indian Bulls Financial 06/10/07- 271.8751 593.1
10 16-19 19 +574.10
Services Ltd 10/09/07 9 0

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INTERPRETATION:

The above table reveals that the difference between LTP and Issue Price of Motilal Oswal
Financial services Ltd , ICRA Ltd, Power finance Corporation Ltd ,Transwarranty Finance
Ltd , Emkay share&stock brokers Ltd , Mahindra&Mahindra Financial services Ltd,
.Infrastructure development Financial co. Ltd , IL&FS Investment Ltd , India Infoline Ltd ,
Indian Bulls Financial Services Ltd is (+)146.20, (+)700 , (+) 115.90 , (-)22.85 , (+)20.10 ,
(+)33.95 , (+)106.10 , (+)69.10 , (+)773.50 , (+)574.10 respectively.
Based on LTP & Issue price differences we can conclude that the investor who
invested in India infoline Ltd and ICRA Ltd got highest gain of Rs.773.50 and Rs.700
respectively.
It can be concluded that the all the above scrip’s are under priced except
Transwarranty Finance Ltd, which is overpriced.

Page 60
TABLE SHOWING SCRIPS OF ELECTRONICS & ELECTRICAL

ISSUE PRIC DIFFERENC

DATE
S.N NAME OF SIZE E ISSUE E BETWEEN
OF LTP
O ISSUE (LAKH RANG PRICE ISSUE PRICE
ISSUE
S) E & LTP

MIC
Electronics 30/04/10- 129-
1 51 150 525.05 +375.05
Ltd 08/05/10 150

Redington
22/01/10-
2 (Indian) Ltd 132.31 95-113 113 320 +207
25/01/10
Autoline
08/01/10- 200-
3 Industries 37.5 225 209.95 -15.05
12/01/10 225
Ltd
FIEM
21/09/08- 125-
4 Industries 41 137 102.95 -34.05
27/09/08 145
Ltd
Voltamp
Transformer 24/08/08- 295- 1342.2
5 48.8384 345 +997.25
s Ltd 29/08/08 345 5

Opto
circuits(Indi 31/03/08- 240-
6 40 270 532 +262
a) Ltd 05/04/08 270

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INTERPRETATION:

The above table shows that the difference between LTP and Issue Price of MIC electronics
Ltd , Redington (India) Ltd , Autoline industries Ltd , FIEM industries Ltd , Voltamp
Transformers Ltd , Opto circuits (India) Ltd is (+) 375.05 , (+)207 , (-)15.05 ,
(-) 34.05, (+) 997.25, (+) 262 respectively.
Based on LTP and Issue Price differences we can conclude that the investor
who invested in Voltamp Transformers Ltd, MIC Electronics Ltd, Opto Circuits (India) Ltd,
Redington (India) Ltd got benefits of Rs.997.25, Rs.375.05, Rs.262, and Rs.207 respectively.
It can be interpreted that the conclusion all the above scrip’s are under priced
except Autoline industries Ltd and FIEM industries Ltd , which are over priced.

TABLE SHOWING SCRIPS OF INFRASTRUCTURE

Page 62
 DIFFRENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF THE SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
IVR Prime
Urban 23/07/10- 407.9
1 141.5 510-600 550 -142.05
developers 26/07/10 5
Ltd
DLF Ltd 11/06/10- 757.4
2 29 150-175 175 +582.45
14/06/10 5
Lanco 06/11/08-
3 444.72381 200-240 240 363 +123
Infratech Ltd 10/11/08
Atlanta Ltd 1/09/08- 285.9
4 43 130-150 150 +135.90
07/10/8 0
GMR
31/07/08- 807.6
5 Infrastructur 381.3698 210-250 210 +597.65
04/08/08 5
e Ltd.
Patel
03/05/08- 470.1
6 Engineering 106.24965 400-440 440 +30.10
09/05/08 0
Ltd
AIA
17/11/07- 1396.
7 Engineering 47 275-315 315 +1081.50
22/11/07 50
Ltd
IVRCL
Infrastructur 18/03/07- 415.4
8 31.89870 385-415 395 +20.40
e & Projects 23/03/07 0
Ltd

Page 63
INTERPRETATION:
The above table reveals that the difference between LTP and Issue Price of in case of DLF
Ltd , Lanco Infratech Ltd , Atlanta Ltd , GMR Infrastructure Ltd , Patel Engineering Ltd , AIA
engineering Ltd , IVRCL Infrastructure and projects Ltd is (+)582.45 , (+)123 , (+)135.90 ,
(+)597.65 , (+)30.10 , (+)1081.50 , (+)20.40 and IVR Prime Urban developers Ltd is
(-)142.05.
Based on LTP and Issue price differences we can concluded that the investor who
invested in IVR Prime Urban Developers Ltd got loss of Rs.(-)142.05 and other (who invested
in other scrip’s) investor got benefit.
At the end it can be concluded that the scrip IVR Prime Urban Developers ltd has
been over priced and the others DLF Ltd, Lanco Infratech Ltd, Atlanta Ltd, GMR
Infrastructure Ltd, Patel Engineering Ltd, AIA engineering Ltd, IVRCL Infrastructure and
projects Ltd have been under priced.

Page 64
TABLE SHOWING SCRIPS OF TOYS AND TEXTILES

DIFFERENCE
NAME OF DATE ISSUE
PRICE ISSUE BETWEEN
S.NO THE OF SIZE LTP
RANGE PRICE ISSUE PRICE
ISSUE ISSUE (LAKHS)
& LTP
Gangothri 18/05/08-
1 134.14634 41-46 41 21.05 - 19.95
textiles ltd 23/05/08
Mudra 08/02/10-
2 95.8 75-90 90 66.40 - 23.60
Lifestyle ltd 14/02/10
Indus Fila 12/02/10-
3 48.43789 170-185 170 216.30 + 46.30
Ltd 14/02/10
Kewal kiran 20/03/08-
4 31 250-275 260 300 + 40
clothing Ltd 23/03/08
Raj Royan 12/01/08-
5 85 55-65 65 23.80 - 41.20
Ltd 18/01/08
Nitin
06/01/08-
6 Spinners 222.22222 18-21 21 13.50 - 7.50
12/01/08
Ltd
Ginni
19/12/07-
7 Filaments 252.63158 19-22 22 13.90 - 8.10
23/12/07
Ltd
Celebrity
19/12/07-
8 Fashions 45.50 160-180 180 67.40 - 112.60
22/12/07
Ltd
Bombay
11/11/07-
9 Rayon 134.75 60-70 70 248 + 178
17/11/07
Fashion Ltd
Provogue 10/06/07- + 736
10 40.49402 130-150 150 886
(India) Ltd 16/06/07

Page 65
INTERPRETATION:

It is understood from the above table the difference between LTP and Issue price of Gangothri
textiles ltd , Mudra Lifestyle ltd , Indus Fila Ltd , Kewal kiran clothing Ltd , Raj Royan Ltd ,
Nitin Spinners Ltd , Ginni Filaments Ltd , Celebrity Fashions Ltd , Bombay Rayon Fashion
Ltd , Provogue (India) Ltd is (-)19.95 , (-)23.60 , (+)46.30 , (+)40 , (-)41.20 , (-)7.50 , (-)8.10 ,
(-)112.60 , (+)178 , (+)736 respectively.
Based on LTP and Issue Price differences we can concluded that the investor who
invested in Indus Fila Ltd , Kewal kiran clothing Ltd , Bombay Rayon Fashion Ltd and
Provogue (India) Ltd got benefit of Rs.46.30 , Rs.40 , Rs.178 and Rs.736 respectively.

It can be concluded that the all the above scrip’s are overpriced except Indus Fila Ltd ,
Kewal kiran clothing Ltd , Bombay Rayon Fashion Ltd and Provogue (India) Ltd which is
under priced.

Page 66
TABLE SHOWING SCRIPS OF AVIATION INDUSTRY

DIFFERENCE
DATE ISSUE
S.N NAME OF PRICE ISSUE BETWEEN
OF SIZE LTP
O THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
Global Vectra 29/09/08-
1 35 175-200 185 188 +3
Helicop Ltd 06/10/08
Deccan 18/05/08-
2 245.46 146-175 148 143.70 - 4.30
Aviation ltd 26/05/08
Jet Airways 18/02/07- 950-
3 172.66801 1100 912.60 - 187.40
(India) Ltd 24/02/07 1125

INTERPRETATION:
From the above table shows the difference between the Issue price and Last Traded Price in
case of global vector helicop ltd is (+)3 and that of Deccan aviation Ltd and Jet Airways Ltd is
(-)4.30 and (-)187.40 respectively.

Page 67
 Based on LTP and Issue price differences we can conclude that the investors who
invested in Global vector Helicop Ltd of Rs.3 and the investor of Deccan Aviation Ltd and Jet
Airways Ltd got a loss of Rs.4.30 and 187.40 respectively.
At the end it can be concluded that the scrip Global Vector Helicop Ltd has been under
priced and the others Deccan and Jet Airways Ltd have been over priced.
TABLE SHOWING SCRIPS OF PETROLEUM INDUSTRY
DIFFERENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
Cairn India 11/12/08-
1 3287.99675 160-190 160 173.35 + 13.35
Ltd 15/12/08
Reliance 13/04/08-
2 4500 57-62 60 134.45 + 74.45
petroleum Ltd 20/04/08
Gujarat state 24/01/08-
3 1380 23-27 27 60.85 + 33.85
Petronet Ltd 28/01/08
Oil & Natural
Gas 05/03/06-
4 1425.93300 680-750 750 912.55 + 162.55
Corporation 13/03/06
Ltd
Gas Authority 27/02/06-
5 845.6516 195 195 348.95 + 153.95
of India Ltd 05/03/06
Indian
Petrochemicals 20/02/06-
6 718.5006 170 170 429.05 + 259.05
Corporation 27/02/06
Ltd
Indra Prastha 28/11/05-
7 400 40-48 48 120.10 + 72.10
Gas Ltd 05/12/05

Page 68
INTERPRETATION:

It is understood from the above table the difference between LTP and issue price of Cairn
India Ltd , Reliance petroleum Ltd , Gujarat state Petronet Ltd , Oil & Natural Gas
Corporation Ltd , Gas Authority of India Ltd , Indian Petrochemicals Corporation Ltd , Indra
Prastha Gas Ltd is (+)13.35 , (+)74.45 , (+)33.85 , (+)162.55 , (+)153.95 , (+)259.05 ,
(+)72.10 respectively.

Based on LTP and Issue price differences we can say that the investor who invested in
Indian Petrochemicals Corporation Ltd and Oil & Natural Gas Corporation Ltd got highest
benefit of Rs.259.05 and Rs.162.55 respectively.
It can be concluded that the all the above scrip’s are under priced.

Page 69
 TABLE SHOWING SCRIPS OF IT SERVICES / TECHNOLOGIES

DIFFERENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
Everonn
05/07/10-
1 Systems India 5000 125-140 140 752.50 + 612.50
11/07/10
Ltd
Take Solutions 01/08/10-
2 21 675-730 730 1043.20 + 313.20
Ltd 07/08/10
HOV Services 04/10/08-
3 40.50 200-240 200 183.20 - 16.80
Ltd 07/10/08
Tech mahindra 01/08/08-
4 127.46 315-365 365 1317.50 + 952.50
Ltd 04/08/08
Tulip IT 09/12/07-
5 90 100-120 120 880 + 760
Services Ltd 15/12/07
Info Edge 30/10/08-
6 53.23851 290-320 320 1106.05 + 786.05
(India) Ltd 02/11/08
Tata
29/07/06-
7 Consultancy 554.526 775-900 850 1001 + 151
05/08/06
Services Ltd
Datamatic Tech 12/04/06-
8 103 101-110 110 44.50 - 65.50
Ltd 19/04/06
CMC Ltd 23/02/06-
9 39.76374 485 485 1010 + 525
28/02/06
Educomp 19/12/07-
10 40 110-125 125 3015 + 2890
Solutions Ltd 22/12/07
I-Flex Solutions 05/06/04-
11 39.617 530 530 1865 + 1335
Ltd 11/06/04

Page 70
INTERPRETATION:

The above table reveals that the difference between LTP and issue price in case of
Everonn Systems India Ltd , Take Solutions Ltd , Tech mahindra Ltd , Tulip IT Services Ltd ,
Info Edge (India) Ltd , Tata Consultancy Services Ltd , CMC Ltd , Educomp Solutions Ltd ,
I-Flex Solutions is (+)612.50, (+)313.20 , (+)952.50 , (+)760 , (+)786.05 , (+)151 , (+)525 ,
(+)2890 , (+)1335 and HOV Services Ltd , Datamatic Tech Ltd is (-) 16.80 , (-)65.50
respectively.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Educomp Solutions Ltd, I-Flex Solutions and Tech mahindra Ltd got more gain of
Rs.2890, Rs.1335 and Rs.952.50 and the investor of HOV Services Ltd, Datamatic Tech Ltd
got loss of Rs.16.80, Rs.65.50 respectively.
At the end it can be concluded that the above all scrip’s are under priced except HOV
Services Ltd , Datamatic Tech Ltd which is overpriced.

TABLE SHOWING SCRIPS OF POWER / ENERGY INDUSTRY

Page 71
 DIFFERENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
Indowind 21/08/10-
1 125 55-65 65 130.25 + 65.25
Energy Ltd 24/08/10
Godawari
28/03/08-
2 Power & 86.95 70-81 81 226.50 + 145.50
04/04/08
Ispat Ltd
Gujarat
Industries 13/10/07-
3 317.4597 63-75 68 79.70 + 11.70
Power co. 19/10/07
Ltd
Suzlon 23/09/07-
4 293.40 425-510 510 1465 + 955
Energy Ltd 29/09/07
National
Thermal
07/10/06-
5 Power 8658.30 52-62 62 191.60 + 129.60
14/10/06
Corporation
Ltd
GVK Power
& 02/02/08-
6 82.75556 260-310 310 584.05 + 274.05
Infrastructur 07/02/08
e Ltd
JaiPrakash
22/03/07-
7 Hydro-power 1800 27-32 32 53.80 + 21.80
29/03/07
Ltd
Power
Trading 01/03/06-
8 584.9999 14-16 16 85.10 + 69.10
Corporation 08/3/06
of India Ltd

Page 72
 Petronet 01/03/06-
9 2609.799 13-15 15 68.55 + 53.55
LNG Ltd 09/03/06

INTERPRETATION:

It is understood from the above table the difference between LTP and issue price of Indowind
Energy Ltd , Godawari Power & Ispat Ltd , Gujarat Industries Power co.Ltd , Suzlon Energy
Ltd , National Thermal Power Corporation Ltd , GVK Power & Infrastructure Ltd , Jai
Prakash Hydro-power Ltd , Power Trading Corporation of India Ltd , Petronet LNG Ltd is
(+)65.25 , (+)145.50 , (+)11.70 , (+)955 , (+)129.60 , (+)274.05 , (+)21.80 , (+)69.10 ,
(+)53.55 respectively.

Based on LTP and Issue price differences we can concluded that the investor who invested in
Suzlon Energy Ltd and GVK Power & Infrastructure Ltd got highest benefit of Rs.955 and
Rs.274.05 respectively.
It can be interpreted the conclusion all the above scrip’s are under priced.

Page 73
TABLE SHOWING SCRIPS OF MEDIA & ENTERTAINMENT /
BROADCAST /FILM INDUSTRY

DIFFERENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP
Raj Television 14/02/10-
1 35.6825 221-257 257 222.25 - 34.75
Network Ltd 23/02/10
Broadcast 09/02/10-
2 85.5 100-120 120 57.60 - 62.40
Initiatives Ltd 14/02/10
Global
15/01/10-
3 Broadcast 105 crore 230-250 250 912 + 662
18/01/10
News Ltd
Prime Focus 25/05/08-
4 100 crore 417-500 417 1040 + 623
Ltd 03/06/08
Sun TV Ltd 03/04/08-
5 68.89 730-875 875 347 - 528
07/04/08
PVR Ltd 08/12/07-
6 74 200-240 225 209.30 - 15.70
14/12/07
UTV Software
21/02/07-
7 communication 69.99950 115-130 130 595.05 + 465.05
25/02/07
Ltd
TV Today 18/12/05-
8 145 80-95 95 151 + 56
Network Ltd 27/12/05

Page 74
INTERPRETATION:
The above table reveals that the difference between LTP and Issue price of Raj
Television Network Ltd , Broadcast Initiatives Ltd , Global Broadcast News Ltd , Prime
Focus Ltd , Sun TV Ltd , PVR Ltd , UTV Software communication Ltd , TV Today Network
Ltd is (-)34.75 , (-)62.40 , (+)662 , (+)623 , (-)528 , (-)15.70 , (+)465.05 , (+)56 respectively.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Global Broadcast News Ltd , Prime Focus Ltd , UTV Software communication
Ltd , TV Today Network Ltd got benefit of Rs.662 , Rs.623 , Rs.465.05 , Rs.56 and the
investor of Raj Television Network Ltd , Broadcast Initiatives Ltd , Sun TV Ltd and PVR Ltd
got a loss of Rs.34.75 , Rs.62.40 , Rs.528 and Rs.15.70 respectively.
At the end it can be concluded that the scrip’s Global Broadcast News Ltd , Prime
Focus Ltd , UTV Software communication Ltd , TV Today Network Ltd have been under
priced and the other scrip’s Raj Television Network Ltd , Broadcast Initiatives Ltd , Sun TV
Ltd and PVR Ltd have been over priced
TABLE SHOWING SCRIPS OF MANUFACTURING INDUSTRY
Page 75
 DIFFERENCE
NAME OF DATE ISSUE
PRICE ISSUE BETWEEN
S.NO THE OF SIZE LTP
RANGE PRICE ISSUE PRICE
ISSUE ISSUE (LAKHS)
& LTP
Bharat
27/06/07- 1020-
1 Earthmovers 49 1075 1246.20 + 171.20
03/07/07 1090
Ltd
Decolight
24/05/07-
2 ceramics 4254.60 45-54 54 28.45 - 25.55
29/05/07
Ltd
Nissan 04/12/06-
3 2500 33-39 39 33.15 - 5.85
Copper Ltd 08/12/06
NITCO 22/02/06-
4 100 140-168 168 241.50 + 73.50
Tiles Ltd 27/02/06
Gitanjali 16/02/08-
5 170 170-195 195 295.50 + 100.50
Gems Ltd 21/02/08
Triveni
Engineering 18/11/07-
6 500 42-50 48 136.55 + 88.55
& Industries 25/11/07
Ltd
Shree
07/10/07-
7 Renuka 40 250-300 285 700.50 + 415.50
14/10/07
Sugars Ltd
Emami Ltd 04/03/07-
8 50 60-70 70 222.30 + 152.30
10/03/07
Bharathi
02/12/06-
9 Shipyard 125 55-66 66 558.55 + 492.55
08/12/06
Ltd
Maruthi 12/06/05-
10 794.676 115 125 920.25 + 795.25
Udyog Ltd 19/06/05

Page 76
INTERPRETATION:

It is understood from the above table the difference between LTP and Issue price of Bharat
Earthmovers Ltd , Decolight ceramics Ltd , Nissan Copper Ltd , NITCO Tiles Ltd , Gitanjali
Gems Ltd , Triveni Engineering & Industries Ltd , Shree Renuka Sugars Ltd , Emami Ltd ,
Bharathi Shipyard Ltd , Maruthi Udyog Ltd is (+)171.20 , (-)25.55 ,(-)5.85 , (+)73.50 ,
(+)100.50 , (+)88.55 , (+)415.50 , (+)152.30 , (+)492.55 , (+)795.25 respectively.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Maruthi Udyog Ltd, Bharathi Shipyard Ltd, and Shree Renuka Sugars Ltd got
highest gain of Rs.795.25, Rs.492.55 and Rs.415.50 respectively.
It can be interpreted the conclusion all the above scrip’s are under priced except
Decolight ceramics Ltd and Nissan Copper Ltd which is overpriced.

TABLE SHOWING SCRIPS OF BANK INDUSTRY

Page 77
 DIFFERENC
ISSUE ISSU
PRICE E BETWEEN
S.N NAME OF DATE OF SIZE E
RANG LTP ISSUE
O THE ISSUE ISSUE (LAKH PRIC
E PRICE &
S) E
LTP
Central Bank of 24/07/07- 142.2
1 800 85-102 102 + 40.25
India 27/07/07 5
ICICI Bank Ltd 19/06/07- 87,500 885-
2 940 971 + 31
22/06/07 million 950
Indian Bank 05/02/07-
3 859.5 77-91 91 161 + 70
09/02/07
Development 29/09/06- 108.9
4 715 22-26 26 + 82.90
Credit Bank Ltd 06/10/06 0
Union Bank of 15/02/06- 100-
5 450 110 152 + 42
India 21/02/06 110
Andhra Bank 16/01/06-
6 850 82-90 90 95.80 + 5.80
20/01/06
Bank of Baroda 16/01/06- 210- 311.1
7 710 230 + 81.10
20/01/06 230 0
Syndicate Bank 07/07/05-
8 500 46-50 50 89.05 + 39.05
13/07/05
Yes Bank Ltd 15/06/05- 186.3
9 700 38-45 45 + 141.30
21/06/05 0
Oriental Bank of 25/04/05- 235- 234.5
10 580 250 - 15.50
Commerce 29/04/05 260 0
Allahabad Bank 06/04/05-
11 1000 75-82 82 97.75 + 15.75
12/04/05
Punjab National 07/03/05- 350-
12 800 390 514 + 124
Bank 11/03/05 390

Page 78
INTERPRETATION:

The above table depicts that the difference between LTP and Issue price of Central Bank of
India , ICICI Bank Ltd , Indian Bank , Development Credit Bank Ltd , Union Bank of India ,
Andhra Bank , Bank of Baroda , Syndicate Bank , Yes Bank Ltd , Allahabad Bank , Punjab
National Bank is (+)40.25 , (+)31 , (+)70 , (+)82.90 , (+)42 , (+)5.80 , (+)81.10 , (+)39.05 ,
(+)141.30 , (+)15.75 , (+)124 and that of Oriental Bank of Commerce is (-) 15.50.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Yes Bank Ltd and Punjab National Bank got highest benefit of Rs.141.30, Rs.124
and the investor of Oriental Bank of Commerce got a loss of Rs.15.50 respectively.
At the end it can be concluded that the above all scrip’s have been under priced except
Oriental Bank of Commerce which is overpriced.

TABLE SHOWING SCRIPS OF PHARMA / CHEMICAL /HEALTH /

BIO-PHARMA INDUSTRY

Page 79
 DIFFERENCE
DATE ISSUE
NAME OF PRICE ISSUE BETWEEN
S.NO OF SIZE LTP
THE ISSUE RANGE PRICE ISSUE PRICE
ISSUE (LAKHS)
& LTP

Advanta India
26/03/10-
1 Ltd 33.8 600-650 640 1036 + 396
30/03/10
AMD Metplast
15/02/10-
2 Ltd 90.9652 65-75 75 45.70 - 29.30
23/02/10
SMS
Pharmaceuticals 05/02/10-
3 25.77 360-380 380 293.45 - 86.55
Ltd 08/02/10

Plethico
Pharmaceuticals 10/04/08-
4 39.2856 280-300 300 402 + 102
Ltd 17/04/08

Nectar Life
22/06/07-
5 sciences Ltd 38.70 200-240 240 248.50 + 8.50
28/06/07
Indoco
17/12/06-
6 Remedies Ltd 30 220-245 245 246.75 + 1.75
23/12/06
Dishman
Pharmaceutical 29/03/06-
7 34.33500 155-175 175 298.30 + 123.30
& Chemical Ltd 07/04/06

Biocan Ltd
11/03/06-
8 100 270-315 315 451.95 + 136.95
18/03/06

Page 80
INTERPRETATION:

The above table projects the difference between LTP and Issue price of Advanta
India Ltd , AMD Metplast Ltd , SMS Pharmaceuticals Ltd , Plethico Pharmaceuticals Ltd ,
Nectar Life sciences Ltd , Indoco Remedies Ltd , Dishman Pharmaceutical & Chemical Ltd ,
Biocan Ltd is (+)396 , (-)29.30 , (-)86.55 , (+)102 , (+)8.50 , (+)1.75 , (+)123.30 , (+)136.95
respectively.
Based on LTP and Issue price differences we can conclude that the investor who
invested in Advanta India Ltd and Biocan Ltd got highest benefit of Rs.396 and Rs.136.95
respectively.
It can be interpreted that the conclusion all the above scrip’s are under priced except
AMD Metplast Ltd and SMS Pharmaceuticals Ltd which is overpriced.

Page 81
 CHAPTER-V

 FINDINGS
 SUGGESSIONS
 CONCLUSIONS
 BIBLIOGRAPHY

Page 82
FINDINGS:

 The IPO returns are more when comparing with nifty returns for the year 2006 to
2012.
 Educomp Solution, Rushil Decorand Onelife Capitalhas given highest benefit to the
investor.
 Sun TV Ltd has given highest negative benefit to the investor.
 This study reveals IPO given 77% positive result and 33% negative result or benefit to
investor.
 Investors more crazy about the new issues or IPO.

Page 83
SUGGESTIONS:

 The returns of IPO’s are higher when compare to benchmark portfolio of Nifty. So an
investor can invest in IPO’s for better returns.

 There is a probability of listing a stock returns in positive is 77% and negative is 33%.

 Investor need to develop a long term investment mindset rather than short term
investment to get more returns or for achieving financial goals

 A good investor should diversifies and reduces his risk by investing in different
securities which contained different risks and returns in order to achieve his goals

 An easy solution to investor is to invest in to mutual fund schemes through a

systematic investment plan (sip) the mutual fund gives you a well diversified,
professionally managed portfolio at low cost

 Investor need to aware of new information, which reflects wider changes in share
prices.

Page 84
CONCLUSIONS

 It can be observed that it is safe for the general public to invest in different sectors of
primary market in present than in the past because SEBI has been introduced and it
controls the operations and working of new issue market

 Primary market returns are very attractive in short period especially on the day of
listing. But investors in IPO’s should take wise decision in choosing the best company.

 From the overall study it can be concluded that the highest positive difference between
Issue price and LTP is Educomp Solutions Ltd. scrip.

 The conclusion from the study is that the highest negative difference between Issue
price and LTP is Sun TV Ltd scrip.

 The study reveals that the scrip’s of Textiles and Media industries have highest
negative difference between LTP and Issue price.

 The study shows that the scrip’s of Bank and Power or Energy industries have highest
positive difference between LTP and Issue price.

BIBLIOGRAPHY
Page 85
Books Referred:-

 SECURITY ANALYSIS AND

PORTFOLIO MANAGEMENT ---- PUNITHAVATHY PANDIAN
 ESSENTIALS OF FINANCIAL
MANAGEMENT ---- I.M. PANDEY
 INDIAN CAPITAL MARKETS ---- SANJEEV AGARWAL

Website Referred:-
 www.nseindia.com
 www.capitalmarket.com
 www.sebi.com
 www.google.com
 www.icicisecurities.com

Page 86