Académique Documents
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DECLARATION
I, Mr. RAHUL SAWANT. of S.A.V. AACHARYA INSTITUTE OF MANAGEMENT & STUDIES of M.M.S. (Semester 3) hereby declare that I have completed the project on IPO for the academic year 2011 - 2012. The information submitted is true and original to the best of my knowledge.
ACKNOWLEDGEMENT
This project on INITIAL PUBLIC OFFER is a result of co-operation and hard work of many people. I, student of -------for her involvement in my project work and timely assessment that provided me inspiration and valued guidance throughout my study. I owe the debt to Mr. Ashok gauda (Director) of SAVIMS for giving me an opportunity to present a creative outcome in the form of project work. I also thank some employees from the organization without whose co-operation my research would not have been accurate. I also express my sincere gratitude to the library staff that has provided me with study material from time to time. I owe debt to my family, colleagues and friends who in some or the other way are responsible for the completion of this project. I am also thankful to all those people who have been of direct or indirect help in some or the other way in the completion of this project. S.A.V.AACHARYA INSTITUTE OF MANAGEMENNT& STUDIES would like to thank my Project Guide Prof.
CERTIFICATE
I, Prof. ----------------- hereby certify that MR. Rahul Sawant of SAVIMS of M.M.S. (Semester 3) has completed the project on IPO in the academic year 2011 - 2012 under my guidance. The information submitted is true and original to the best of my knowledge.
TABLE OF CONTENTS
CHAPTER
TOPIC
PAGE NOS.
NO.
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FOREX MARKET, PRIMARY MARKET, SECONDARY MARKET TYPES OF ISSUES PUBLIC ISSUE, RIGHTS ISSUE, PREFERENTIAL ISSUE
OVERVIEW
MEANING OF IPO
STAKE HOLDERS
PLAYERS IN IPO
IPO GRADING
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FUNDAMENTALS OF THE ISSUE OF IPO RECENT IPOs
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As we all know IPO INITIAL PUBLIC OFFERING is the hottest topic in the current industry, mainly because of India being a developing country and lot of growth in various sectors which leads a country to ultimate success. And when we talk about countrys growth which is dependent on the kind of work and how much importance to which sector is given. And when we say or talk about industries growth which leads the economy of country has to be balanced and given proper finance so as to reach the levels to fulfill the needs of the society. And industries which have massive outflow of work and a big portfolio then its very difficult for any company to work with limited finance and this is where IPO plays an important role. This report talks about how IPO helps in raising fund for the companies going public, what are its pros and cons, and also it gives us detailed idea why companies go public. How and what are the steps taken by the companies before going for any IPO and also the role of (SEBI) Securities and Exchange Board of India the BSE and NSE , what are primary and secondary markets and also the important terms related to IPO. It gives us idea of how IPO is driven in the market and what are various factors taken into consideration before going for an IPO. And it also tells us how we can more or less judge a good IPO. Then we all know that scams have always been a part of any sector you go in for which are covered in it and also few recommendations are given for the same. It also gives us some idea about what are the expenses that a company undertakes during an IPO. IPO has been one of the most important generators of funds for the small companies making them big and given a new vision in past and it is still continuing its work and also for many coming years.
Without financial markets, borrowers would have difficulty finding lenders themselves. Intermediaries such as banks help in this process. Banks take deposits from those who have money to save. They can then lend money from this pool of deposited money to those who seek to borrow. Banks popularly lend money in the form of loans and mortgages. A good example of a financial market is a stock exchange. A company can raise money by selling shares to investors and its existing shares can be bought or sold. B. TRANSFER OF RISKS - in Derivative Markets
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During the 1980s and 1990s, a major growth sector in financial markets is the trade in so called derivative products, or derivatives for short.
In the financial markets, stock prices, bond prices, currency rates, interest rates and dividends go
up and down, creating risk. Derivative products are financial products which are used to control risk or paradoxically exploit risk. It is also called financial economics. C. INTERNATIONAL TRADE - in Currency Market The most obvious buyers and sellers of foreign exchange are importers/exporters. While this may have been true in the distant past, whereby importers/exporters created the initial demand for currency markets, importers and exporters now represent only 1/32 of foreign exchange dealing, according to BIS.[1] The picture of foreign currency transactions today shows:
Banks/Institutions Speculators Government spending (for example, military bases abroad) Importers/Exporters Tourists
D. MATCH THOSE WHO WANT CAPITALTO THOSE WHO HAVE IT Without financial markets, borrowers would have difficulty finding lenders themselves. Intermediaries such as banks help in this process. Banks take deposits from those who have money to save. They can then lend money from this pool of deposited money to those who seek to borrow. Banks popularly lend money in the form of loans and mortgages. A good example of a financial market is a stock exchange. A company can raise money by selling shares to investors and its existing shares can be bought or sold.
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Stock markets, which provide financing through the issuance of shares or common Bond markets, which provide financing through the issuance of bonds, and enable
Commodity Markets, which facilitate the trading of commodities. Money Markets, which provide short term debt financing and investment. Derivatives Markets, which provide instruments for the management of financial risk.
Futures Markets, which provide standardized forward contracts for trading products at
Insurance Markets, which facilitate the redistribution of various risks. Foreign Exchange Markets, which facilitate the trading of foreign exchange.
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SECONDARY MARKET Secondary market refers to a market where securities are traded after being Initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. The secondary market enables participants who hold securities to adjust their holdings in response to changes in their assessment of risk and return. They also sell securities for cash to meet their liquidity needs. Once the new securities are issued in the primary market they are traded in the stock (secondary) market. The secondary market is operated through two mediums, namely, the Over-theCounter (OTC) market and the Exchange- Traded market.
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An Initial Public offer (IPO) is the selling of securities to the public in the primary market.
It is the largest source of funds with long or indefinite maturity for the company. Companies fall into two broad categories
A. B.
Private Public
A privately held company has fewer shareholders and its owners don't have to disclose much information about the company. Anybody can go out and incorporate a company: just put in some money, file the right legal documents and follow the reporting rules of your jurisdiction. Most small businesses are privately held. But large companies can be private too. It usually isn't possible to buy shares in a private company. You can approach the owners about investing, but they're not obligated to sell you anything. Public companies, on the other hand, have sold at least a portion of themselves to the public and trade on a stock exchange. This is why doing an IPO is also referred to as going public
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Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. In the United States, public companies report to the Securities and Exchange Commission (SEC). In other countries, public companies are overseen by governing bodies similar to the SEC. From an investor's standpoint, the most exciting thing about a public company is that the stock is traded in the open market, like any other commodity. If you have the cash, you can invest. The CEO could hate your guts, but there's nothing he or she could do to stop you from buying stock. The first sale of stock by a private company to the public, IPOs 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 obtains 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. IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock 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.
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An IPO allows a company to raise funds for utilizing in various corporate operational purposes like acquisitions, mergers, working capital, research and development, expanding plant and equipment and marketing.
LIQUIDITY
The shares once traded have an assigned market value and can be resold. This is extremely helpful as the company provides the employees with stock incentive packages and the investors are provided with the option of trading their shares for a price.
VALUATION
The public trading of the shares determines a value for the company and sets a standard. This works in favor of the company as it is helpful in case the company is looking for acquisition or merger. It also provides the share holders of the company with the present value of the shares.
INCREASED WEALTH
The founders of the companies have an affinity towards IPO as it can increase the wealth of the company, without dividing the authority as in case of partnership. Because of the increased scrutiny, public companies can usually get better rates when they
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issue debt.
Being on a major stock exchange carries a considerable amount of prestige. In the past, only private companies with strong fundamentals could qualify for an IPO and it wasn't easy to get listed. The internet boom changed all this. Firms no longer needed strong financials and a solid history to go public. Instead, IPOs were done by smaller startups seeking to expand their businesses. There's nothing wrong with wanting to expand, but most of these firms had never made a profit and didn't plan on being profitable any time soon. When a company lists its shares on a public exchange, it will almost invariably look to issue additional new shares in order to raise extra capital at the same time. The money paid by investors for the newly-issued shares goes directly to the company (in contrast to a later trade of shares on the exchange, where the money passes between investors). An IPO, therefore, allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital for future growth. The company is never required to repay the capital, but instead the new shareholders have a right to future profits distributed by the company and the right to a capital distribution in case of dissolution. The existing shareholders will see their shareholdings diluted as a proportion of the company's shares. However, they hope that the capital investment will make their shareholdings more valuable in absolute terms. In addition, once a company is listed, it will be able to issue further shares via a rights issue, thereby again providing itself with capital for expansion without incurring any debt. This regular ability to raise large amounts of capital from the general market, rather than having to seek and negotiate with individual investors, is a key incentive for many companies seeking to list.
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made to existing shareholders who are expected to know their company. The main entry norms for the companies making a public issue (IPO or FPO) are summarized as under:
ENTRY NORM I (EN I)
The company shall meet the following requirements: Net Tangible assets of as least Rs 3 crores for full 3 yrs. Distributable profits in at least three yrs. Net worth of at least three yrs. IF change in name , at least 50% revenue for preceding 1 yr should be from the new activity. The issue size does not exceed 5 times the pre-issue net worth
Issue shall be through book building route, with at least 50% to be mandatory allotted to Qualified Institutional Buyers (QIBs).
The minimum post-issue face value capital shall be Rs 10 crore or there shall be a compulsory market-making for at least 2 yrs.
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Banks of which at least 10% comes from the appraiser(s). The minimum post-issue value capital shall be Rs10 crore or there shall be a compulsory
market-making for at least2 yrs. In addition to satisfying the aforesaid eligibility norms, the company shall also satisfy the
1000 prospective allotees in its issue. For the companies which has not completed 12 months of its commercial operations. The 1st issue is to be at par A special resolution is to be passed Draft prospectus should be submitted to SEBI Minimum Public offer for listing is 25% of total paid up capital up to max of 75%.
Partly paid Up share to be made fully Paid up or forfeited in the manner specified, before the public offering.
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promoters or shareholders any option to receive equity shares after public offer.
IPO GRADING (Effective April 30, 2007) Grading to be obtained from at least 1 rating agency.
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BOOK BUILDING
Book Building is essentially a process used by companies raising capital through Public Offeringsboth Initial Public Offers (IPOs) or Follow-on Public Offers ( FPOs) to aid price and demand discovery. It is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices, which are within the price band specified by the issuer. The process is directed towards both the institutional as well as the retail investors. The issue price is determined after the bid closure based on the demand generated in the process.
The Issuer who is planning an offer nominates lead merchant banker(s) as 'book runners'. The Issuer specifies the number of securities to be issued and the price band for the bids.
The Issuer also appoints syndicate members with whom orders are to be placed by the The syndicate members input the orders into an 'electronic book'. This process is called The book normally remains open for a period of 5 days. Bids have to be entered within the specified price band. Bids can be revised by the bidders before the book closes. On the close of the book building period, the book runners evaluate the bids on the basis of The book runners and the Issuer decide the final price at which the securities shall be Generally, the number of shares are fixed, the issue size gets frozen based on the final price Allocation of securities is made to the successful bidders. The rest get refund orders.
investors.
issued.
per share.
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Difference between shares offered through book building and offer of shares through normal public issue / fixed price issue
BOOK BUILDING PROCESS Indicative price range is known PRICING DEMAND PAYMENT Can be known everyday as the book is built After allocation FIXED PRICE PROCESS Offered price is Known in advance to investors Known after the closure of issue At the time of subscription
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17)
18)
A. Letter of allotment B. Regret Letter 19) Refund cheque 20) Listing Of shares in NSE or BSE When a company wants to go public, the first thing it does is hire an investment bank, which does the underwriting. Underwriting is the process of raising money by either debt or equity (in this case we are referring to equity). You can think of underwriters as middlemen between companies and the investing public. The biggest underwriters are Goldman Sachs, Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan Stanley. The company and the investment bank will first meet to negotiate the deal. Items usually discussed include the amount of money a company will raise, the type of securities to be issued and all the details in the underwriting agreement. The deal can be structured in a variety of ways. For example, in a firm commitment, the underwriter guarantees that a certain amount will be raised by buying the entire offer and then reselling to the public. In a best efforts agreement, however, the underwriter sells securities for the company but doesn't guarantee the amount raised. Also, investment banks are hesitant to shoulder all the risk of an offering. Instead, they form a syndicate of underwriters. One underwriter leads the syndicate and the others sell a part of the issue. Once all sides agree to a deal, the investment bank puts together an offer document to be filed with the SEBI. This document contains information about the offering as well as company info such as financial statements, management background, any legal problems, where the money is to be used and insider holdings. The SEBI then requires a cooling off period, in which they investigate and make sure all material information has been disclosed. Once the SEBI approves the offering, a date (the effective date) is set when the stock will be offered to the public.
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Investors Qualified Institutional Investors Non Institutional Investors Retail Investors Issuer Book Running Lead Manager Underwriters Escrow Bankers Bidding Centers Registrars Legal Advisor Stock Brokers and Sub Brokers The Stock Exchanges The Depositories The Postal System
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Merchant Bankers play the most vital role amongst all intermediaries. They assist the
company right from preparing prospectus to the listing of securities at the stock exchanges. Merchant Bankers have to satisfy themselves about the correctness and propriety of all the information provided in the prospectus. It is mandatory for them to carry due diligence for all the information provided in the prospectus and they must issue a certificate to this effect to SEBI. A Company may appoint more than one Merchant Banker provided Inter-Se Allocation of Responsibilities between theMerchant Bankers are properly structured.
Escrow Bankers
They receive Bid-cum-Application forms from Bidding centers Sort tehm according to the category (employees, shareholders, NRIs, public) Affix unique running bank serial numbers for each of the application and the
accompanying payment instruments. Prepare bank schedules giving details of bank serial number, application number, name of the investor, amount collected, cheque number paying bank and branch name. Schedules are to be serially numbers and totaled. Send cheques / drafts in clearing Account for cheque returns
Send provisional collection certificates on or before the 3rd day from the date of closure.
Reconcile and send final certificates in respect of all the branches Prepare and forward cheque return statements Transfer funds to public issue / offer and refund order accounts
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Honour refund orders after matching the same with master Make available periodic reconciliation of the refund account
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Registrar
Receive / collect bid-cum-application forms from the escrow collection branches along
Prepare 3 day report for submission to SEBI Enter details of applications received lot wise Prepare bunchs of uniform no. of applications Capture the data from the applications Print chek list and verify the data entered with applications Update corrections and verify correction check lists Send beneficiary account details to the depositories for validation Obtain demographic details of valid beneficiary accounts Match application details with the depository details Print mismatches and manually identify cases where discretion is taken Enter cheque return details and mark them in as such in data Reconcile amount collected as per application with the schedule; seek clarifications from
the bankers in repect of mismatches Do a branch wise reconciliation of the amount received as per data captured at their end
and as per bank final certificate Identify applications to be rejected on technical grounds Verify the identified applications physicaly
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Bidding Centers
They accept bid cum application forms from investors along with cheque / demand draft Register Bid (for options) through online / offline terminals Generate transaction registration slips (TRS) for each of the options Lodge Bid- cum- Applications with an Escrow Bankers
Bankers to the Issue are banks which accept application from the public on behalf of
the company. These applications are then forwarded to Registrar & Share Transfer Agent for further processing.
Stock Brokers & Sub-Brokers are those intermediaries who through their contacts /
sources invite the public for subscribing shares for which they get commission.
Underwriters are those intermediaries who underwrite the securities offered to the
public. In case there is under subscription (in short, the company does not receive good response from public and amount received from is less than the issue size), underwriters subscribe to the unsubscribed amount so that the issue is successful.
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Stock exchanges have stipulated minimum threshold for the purpose of IPOs, which are as under
BSE
Minimum issue size Rs. 10 crores Minimum post issue paid up capital- Rs 20 crores Minimum market capitalization Rs 25 crores
NSE
Post issue paid up capital should not be less than Rs 10 crores Capitalization i.e Issue price multiplied by post issue no of shares should not be less than Rs 25 crores
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FEMA ACT
OCBs are de-recognized as a class of investors FIIs investment limits
Single FII : up to 10% of the post issue capital Aggregate : up to 24% of the post issue capital, can be increased up to sectoral limit, with the approval of Board of Directors followed by shareholders approval by a special resolution. Single sub- account : up to 10% of the post issue capital, 5% in case the sub account is a foreign corporate or an individual
PAN No. not provided in application for Rs. More than 50,000 HNIs / QIBs applying at cut off Applications not bid but banked Application bid but not banked DP ID / Client ID not provided Multiple bids Bids by minors Bids outside the price band
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PROSPECTUS
An IPO prospectus is a document filed by companies attempting to sell shares to the public in an Initial Public Offering, or IPO. It's a critical document for any investors interested in purchasing IPO shares. The prospectus will describe the company's operations, competitive landscape and risk factors as well as the planned uses for the proceeds that are raised through the IPO. Unfortunately, IPO prospectuses are very long and dense documents that contain a tremendous amount of confusing legal jargon. Understanding the key sections of the prospectus will help you get through the document more effectively and will increase your ability to extract critical information from the prospectus.
AGREEMENT
MOU with BRLMs MOU with RTI and STA Escrow Agreement
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Syndicate Agreement Agreement with Post Monitoring Agency Comfort Letters from Auditors and Due Diligence Certificates from BRLMs
The form for applying/bidding of shares is available with all Syndicate members, collection centers, the brokers to the issue and the bankers to the issue.
The listing on the stock exchanges is done within 7 days from the finalization of the issue. Ideally, it would be around 3 weeks after the closure of the issue. Going public requires a Registration Statement which is a carefully crafted document that is prepared by your attorneys and accountants. It requires detailed discussions on information pertaining to:
Business product/service/markets Company Information Risk Factors Proceeds Use (How are you going to use the money) Officers and Directors Related party transactions Identification of your principal shareholders
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Audited financials
After your registration statement is prepared, it is submitted to the Securities and Exchange Commission and various other regulatory bodies for their detailed review. When this process is completed, you and your management team will do a "road show" to present your company to the stock brokers who will then sell your stock to the public investors. Assuming they can successfully sell your issue, youll receive your money.
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PROMOTERS
Is the company a family run business or is it professionally owned? Even with a family run business what are the credibility and professional qualifications of those managing the company? Do the top level managers have enough experience (of at least 5 years) in the specific type of business?
INDUSTRY OUTLOOK
The products or services of the company should have a good demand and scope for profit.
BUSINESS PLANS
Check the progress made in terms of land acquisition, clearances from various departments, purchase of machinery, letter of credits etc. A higher initial investment from the promoters will lead to a higher faith in the organization.
FINANCIALS
Why does the company require the money? Is the company floating more equity than required? What is the debt component? Keep a track on the profits, growth and margins of the previous years. A steady growth rate is the quality of a fundamentally sound company. Check the assumptions the promoters are making and whether these assumptions or expectations sound feasible.
RISK FACTORS
The offer documents will list our specific risk factors such as the companys liabilities, court cases or other litigations. Examine how these factors will affect the operations of the company.
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PUBLIC SCRUTINY
A major reason why firms resist going public is the loss of confidentiality in company operations and policies. For example, a company could be destroyed if the company were to disclose its technology or profitability to its competitors. Public companies are also open to public scrutiny. Quarterly financial reports, internal transactions, and balance sheets are all open to inspection. This is more of a problem for some companies than others, particularly companies who might have made illegal deals or altered financial reports.
LOSS OF CONTROL
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Outsiders are often in a position to take control of corporate management and might even fire the entrepreneur/company founder. While there are effective anti-takeover measures, investors are not willing to pay a high price for a company in which poor management could not be replaced.
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IPO EXPENSES
An IPO is a costly undertaking. A typical firm may spend about 15-25% of the money raised on direct expenses. Even more resources are spent indirectly (management time, disruption of business). Immediate Cash-out Usually Not Permitted Typically, IPO entrepreneurs face various restrictions that do not permit them to cash out for many months after the IPO.
LIABILITY
The company, its management, and other participants may be subject to liability for false or misleading statements and omissions in the registration documents or in the reports filed by the company after it becomes public. In addition management may be subject to law suits by the stockholders for breaches of fiduciary duty, self dealing and other claims.
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RECENT IPOs
Issuer Company
Astec LifeSciences Limited IPO Den Networks Limited IPO Indiabulls Power Limited IPO Thinksoft Global Services Ltd IPO Euro Multivision Limited IPO Pipavav Shipyard Limited IPO Oil India Limited IPO Globus Spirits Limited IPO Jindal Cotex Limited IPO NHPC Limited IPO Adani Power Limited IPO Raj Oil Mills Limited IPO Excel Infoways Limited IPO Mahindra Holidays and Resorts India Limited IPO Rishabhdev Technocable Limited IPO
Issue Open
Oct 29, 2009 Oct 28, 2009 Oct 12, 2009
Issue Close
Nov 04, 2009 Oct 30, 2009 Oct 15, 2009
Issue Type
IPO-BB IPO-BB IPO-BB
IPO-BB IPO-BB
45.58 66.00
Sep 16, 2009 Sep 07, 2009 Aug 31, 2009 Aug 27, 2009 Aug 07, 2009 Jul 28, 2009 Jul 20, 2009
Sep 18, 2009 Sep 10, 2009 Sep 02, 2009 Sep 01, 2009 Aug 12, 2009 Jul 31, 2009 Jul 23, 2009
IPO-BB IPO-BB
48.17 277.96
29/- to 33/-
IPO-BB
22.62
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CASE STUDY
KABIRDAS MOTOR COMPANY PLANS EXPANSION, TO RAISE FUNDS THROUGH IPO
Chennai, 2nd July, 2009: Kabirdass Motor Company Ltd. plans expansion, To introduce ecofriendly two- wheelers in India Incorporated in November 2006, Kabirdass Motor Company Limited (KMCL) is engaged in the manufacture and distribution of electric bikes and scooters under the brand name 'Xite'. The Company belongs to the Kabirdass group of companies that also comprises Best Cast IT Ltd., S.R.K. Casters and Shareway Securities Ltd. The Company decided to manufacture battery-operated electric vehicles to encash on the vast experience of the promoters in the auto component industry, their time-tested ability in vendor development and the growing demand for non- polluting vehicles. PRODUCT SPECIFICS
An electric bike or scooter is a battery-operated vehicle that is very economical with low maintenance cost and zero pollution. They use rechargeable batteries that can be charged easily using a power connection. Battery-operated scooters provide clean, affordable and eco-friendly city transportation. The operating costs of the electric bikes and scooters is very low (less than one unit of per charge for every 50 km), which is a major attraction for the Indian market. The vehicle does not require regular maintenance, and is targeted at college students, senior citizens, and housewives. In a span of 21 months, the company has sold over 1,852 bikes and scooters
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The first of a series of electric bikes and scooters manufactured by Kabirdass are an advanced zeroemission, battery-powered (250 Watt to 1500 Watt) scooter. With the rising cost of fuel, which is a constant worry to most consumers and the ever-increasing pollution levels through vehicle emissions, these environment-friendly bikes/scooters seem to be the best bet for genNext consumers. KMCL has found wide acceptance for its products in Tamil Nadu, and is planning to introduce the same in the other Southern states like Karnataka, Andhra Pradesh and Kerala. Kabirdass which has been selling XITe bikes and scooters for over a year now, maps its customer profile under 18 years, or above 40 years. The XITE RELIANT
It is an innovative electric scooter that is powered by maintenance-free battery 20Ah, that ensures a smoke-free and noise-free ride. It is also easy to maintain and comes with one year warranty. Major Events And Achievements - Winner of the 2007 New Ventures India Business Plan Competition - certificate received from Investor Forum 2007 First batch of scooters assembled and delivered to customers in Jan 2007. 5 models of electric scooters launched in Feb 2007.
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The Company's umbrella brand "Xite" is well-established in Tamil Nadu, Andhra Pradesh and Karnataka. Continuous investment and efforts by the company to spread the brand has resulted in increasing the market share. The credit for the establishment of "Xite" brand across the southern region of the country goes to the strong marketing and distribution network. Currently, the Company has nearly 33 dealers and it plans to increase this number in a phased manner in every part of India. The Company has embarked upon Localization Program of key components. The focus on sales forces effectiveness as a key business driver has given a strong competitive edge to the Company over its competitors. Implementation of business planning tools, focus on technical support, field coaching and constant evaluation of product knowledge and training has helped in improving effectiveness and field force productivity.
R&D
Presently the Company has assembled scooters upto 1500 watts of motor power. After expansion, the company plans to have higher capacity electric scooter having 2,000 watts to 3,000 watts with long range of 150 to 200 km on single charge. Further it proposes to have standardization and unification of spares for all types of electric scooter.
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INDUSTRY SUMMARY Indian two-wheeler industry has embraced the new concept of electric bikes and scooters that are a very popular mode of transport in developed countries like America, Japan and China. With the rising cost of fuel, increasing levels of pollution and congestion in urban areas, higher running and maintenance cost of vehicle, the electrically charged bikes and scooters have a very bright future in the area of personal transportation.
FINANCIALS There has been a marginal increase in sales for the financial year 2009 to Rs.260.48 lacs, from Rs. 249.46 lacs in 2008, an increase of 4.42%. During the year, the company entered into an agreement with Hero Ecotech Ltd. for transfer of rights of the KMC product K1500SI along with the license and approvals for the same.
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CHAPTER 8 CONCLUSION
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Initial public offering (IPO), also referred to simply as a "public offering" or "flotation," is when a company 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 privatelyowned 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. However, in order to make money, calculated risks need to be taken. IPO Grading is a service aimed at facilitating the assessment of equity issues offered to public. The grade assigned to any individual issue represents a relative assessment of the fundamentals of that issue in relation to the universe of other listed equity securities n India. Such grading is assigned on a five-point scale with higher score indicating stronger fundamentals
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CHAPTER 9 BIBLIOGRAPHY
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BIBLIOGRAPHY
www.sebi.gov.in
www.investopedia.com www.nseindia.com www.bseindia.com www.chittorgarh.com www.intimespectrum.com NCFM Financial markets modules (Capital market, Derivatives market)
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