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Executive Summary

IPO stands for Initial Public Offer. An IPO is the first sale of common stocks by a
corporation to the public.
I have undertaken the project at INDIA INFOLINE is a leading full service securities firm
providing the entire gamut of financial services. INDIA INFOLINE provides a breadth of
financial and advisory services including wealth management, investment banking, corporate
advisory, brokerage & distribution of equities, commodities, mutual funds and insurance,
structured products - all of which are supported by powerful research teams. INDIA
INFOLINE has opened its branch in Belgaum in 2005. Since 2005 it has delivered fair &
impressive services. At present INDIA INFOLINEs customer database is more than 7000.
These customers are loyal & are availing regular services from INDIA INFOLINE. It has got
more than 700 DEMAT account holders.

The project deals with the Awareness level of IPO among investors at INDIA
INFOLINE.

1. INTRODUCTION
, This Project Work focuses on the select subject and a project report. As a part of
fulfillment of this requirement a project was taken up at INDIA INFOLINE on Awareness
Level of IPO Investors at INDIA INFOLINE. The project covers detailed data collection,
interaction with the subject experts, interpretation analysis in the light of present economic
and stock market scenario. The final details are as under:

1.1 Statement of the Problem:


Initial Public Offer (IPO) is one of the financing means which is widely used by the
corporate world all over, for meeting the financing needs of the new as well as on going
companies. Therefore it is proposed to study the awareness level of IPO among Investors at
INDIA INFOLINE. Thus the statement of the problem is as under:
To study the awareness level of IPO among investors at INDIA INFOLINE
1.2 Objectives of the study:
MAIN OBJECTIVE:To study the awareness level of IPO among investors at INDIA INFOLINE.
Sub objectives:

To study how INDIA INFOLINE guides the Investors to apply for IPOs.

To study how INDIA INFOLINE is guiding their investors regarding the amount and
no of shares to apply for an IPO.

To study the factors considered by INDIA INFOLINE in knowing the company who
float IPOs.

To identify the difficulties faced by Investors while applying for IPO.

To study the marketing methods adopted by the companies for creating awareness
about their IPO.

1.3Scope of the Study:


The scope of the study covers

Marketing methods adopted by the INITIAL PUBLIC OFFER (IPOs).

Analysis based on the facts and figures at INDIA INFOLINE,

Interactions with the subject experts at INDIA INFOLINE,

Interactions with the IPO investors at INDIA INFOLINE etc.

1.4Research Methodology:
Primary Sources:
o Data comprising of Facts & Figures
o Statistical and Mathematical techniques
o Graphical analysis
o Analysis by the subject experts etc
o Online Trading on Major Stock Exchanges BSE and NSE
Secondary Sources:

o Data from print media and electronics media.


o Data Available in the websites, Company records etc.

1.5Limitations of the study:

Analysis is purely based on the historical data and its behavior in the past.

The future marketing behavior and the economic issues of national and global level
that might influence can not be envisaged at this point of time.

The findings are limited to the scope, survey records, selection of IPOs and the
limited analysis that could be arranged within the time available for completion of the
project.

2. RESEARCH DESIGN
The project has been carried out with the main focus on the subject of the project and
detailed research findings in the backdrop of Indian corporate, economic, stock market
scenario 2009-10. The research methodology adopted to arrive at the conclusion of the
project is underlined below:

Definition of the project theme.

Statement of the problem.

Collection of the Primary, Secondary and other data/information.

Source identification for data and information collection.

Use of identified sources for data and information collection which are Print media,
Outdoor publicity, Institutional marketing, Expert opinion, Sponsorship of Events,
Publicity events Business fairs, exhibitions etc.

Live working on the stock market with reference to project theme and statement of the
problem.

Analysis and interpretation of the data collected from selected sources.

Practical survey through a well defined questionnaire of 50 investors of INDIA


INFOLINE.

Discussions with subject experts to arrive at findings.

Arriving at conclusion/ findings of the project study

PROFILE
3.1 Industry Profile:
Earliest records of securities trading in India are available from the end of eighteenth
century. Before 1850 there was business conducted in Mumbai in the share of bank and the
securities of east India Company, which were consider as securities for buying, selling and
exchange. The share of commercial bank, mercantile bank and bank of Bombay were some of
the prominent shares traded. The business was conducted under a sprawling banyan tree in
front of the town hall, which is known in the horniman circle park.
In 1850, the companies act was passed and that heralded the commencement of join
stock companies in India.
It was the American civil war that helped Indians to established broking business. The
leading broker, Shri Premchand Roichand designed and developed a procedure to be followed
while dealing in shares.
In 1874 the dalal street became the prominent place for meeting of the brokers to
conduct there business. The broker organized an association on 9th July 1875 known as native
share and stock broker association to protect the character, status and internet of the native
brokers. That was the foundation of the stock exchange, Mumbai. The exchange was
established with 318 members. The stock exchange, Mumbai did not have to look back as it
started raiding high ladder of growth.

The stock exchange is a market place, like any other centralize market where buyers
and sellers can transacted business in securities at given point of a time in a convenient and
competitive manner at the fairest possible prizes.
In Jan 1899, Mr. James M MacLen, MP inaugurated the brokers hall. After the first
world war the stock exchange was housed properly at an old building near the Town hall
in1928, the present premises where acquired surrounded by Dalal street, Mumbai samachar
marg and hamam street. A new building a present location was constructed and was occupied
on 1st Dec 1930.
In 1950 the regulation of business in securities and stock exchange became an
exclusively central Government sub following adaptation of constitution of India. In 1956,
the security contract act was passed by the parliament of India. To regulate the securities
market, SEBI was initial established on Oct 12 1988 as an interim board under control of
ministry of finance, Government of India. In 1992, SEBI act was passed through which the
SEBI came into existence. Hence SEBI acquired statutory status on 30th Jan 1992 by passing
an ordinance, which was subsequently converted into an act passed by the parliament on
April 4th 1992. The main objective of SEBI is to protect the interest of investor, regulate and
promote the capital market by creating an environment, which would facilitate mobilization
of resources through epiciant allocation and to generate confidents among the investor. As
such SEBI is responsible for regulating stock exchanges and other intermediaries who may be
associated with capital market and the process of the public companies rising capital by
issuing instrument that will be traded on capital market. SEBI has been empowered by the
central government to develop and regulate capital markets in India and there by protect the
interest of investors.
In 1992, OTCI (Over the counter exchange of India) came in to existent where
equities of small companies are listed.
In 1994, NSE(national stock exchange) came in to existent which brought an and to
the open but cry system of trading securities which was in vogue for 150 years, and
introduced screen based trading system.
BSE (Bombay stock exchange) online trading system was launched on March 14th
1995. Know the trading in securities is down using screen based trading method through only
authorized members of the exchange.

In screen based trading, investor place there buy and sale orders with brokers whose
enter the orders in the automated trading system. When buy and sale order matches, a trade is
generated and trade details or given to respective brokers. After a trade has taken place, the
buyer has to pay money and seller has to deliver the securities
On the stock exchange hundred & thousands of trades take place every day. Buyers
and sellers are spread over a large geographical area. Due to these problems completing a
trade by paying cash to the seller & securities to buyer immediately on execution of trades on
an individually basis is virtually impossible. So the exchange allows trading to take place for
a specified period which is called trading cycle. A unique settlement number identifies each
trading cycle. Once the trading period is over, buyer broker pays money and seller broker
delivers securities to the CC/CH on a predefined day. This process is called as pay in. after
pay in securities are given to the buyer brokers and money is given to seller brokers by the
CC/CH. This process is called as pay out. This process pay in & pay out is called settlement.
Initially the trading cycle was of one fortnight, which was reduced to one week. The
transactions entered during this period, of a fortnight or one week, were used to be settled
either by payment for purchase or by delivery of shares certificates sold on notified days one
fortnight or one week of expiry of the trading. The settlement schedules are made known to
the members of the exchange in advance.
The weekly settlement period was reduced by daily settlement popularly known as
rolling settlement, in which each day is separate trading day. With effect from December
2001, t+% rolling settlement cycle was introduced for all equities where T is the trading day
and pay in & pay out for the settlement was done on the 5th business day after the trade day.
For e.g. If T was Monday, the pay-in & pay-out were done on next Monday as Saturday &
Sunday are not counted as business days. T+5 cycles were further shortened to T+3
settlement cycle.

3.2Company Profile:

India Infoline was Launched on 11 May 1999 with SEBI


REGN. NO. : INB 231097537 & CODE NO. : 10975,

Regd. &

Dealing Office : Building No. 24, 1st Floor, Nirlon Limited


Compound, Western Express Highway, Goregaon (E), Mumbai 400 063.www.indiainfoline.com is Indias leading and most
comprehensive business and financial information website. The
site made available quality information and analysis - earlier
restricted to a few people - to the common man absolutely
free. The site met with an overwhelming response and has
been reviewed as the most comprehensive financial content
website in India by BBC World - Money Watch, Business World,
Business Line and others. The company also won the Golden
Mouse Award in India Internet World 2000 for the Best Finance
site. In May 2001, our website was included in the Top 200 Best
of the Web list by Forbes Global under the Asia Investing
category. We were the only website from India to be featured in
any category. Since then it has been nominated twice to this
list.

In

its

last

review,

Forbes

editors

have

said,

"www.indiainfoline.com is a must read for the investors in


South Asia..."Our research is also disseminated electronically
through Bloomberg, Investext, First Call/Thomson Financial and
Internet Securities. On First Call/Thomson Financial, we have
been one of the largest read research houses from Asia, which
is a testimony to the quality and timeliness of our reports.

The offerings on the site include a combination of


information and transaction services. Transaction services
include mutual funds, personal loans and online broking
through www.5paisa.com. India Infoline was the first company
to offer many of these services in the country. In online
broking, we have emerged as a leading player offering online
trading facilities with significant market share. As on date, the
Group employs 4000 plus employees, most of them are placed
at its various branches across India. About INDIA INFOLINEIt is
a one-stop financial services shop, most respected for quality
of its advice, personalized service and cutting-edge technology

Vision

Its vision is to be the most respected company in the financial


services space India Infoline Ltd. India Infoline Ltd is listed on
both the leading stock exchanges in India, viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange
(NSE).

The

India

Infoline

group,

comprising

the

holding

company, India Infoline Ltd and its subsidiaries, straddles the


entire financial services space with offerings ranging from Equity
research, Equities and derivatives trading, Commodities trading,
Portfolio Management Services, Mutual Funds, Life Insurance,
Fixed deposits, GoI bonds and other small savings instruments
to loan products and Investment banking. India Infoline also

owns and manages the websites, www.indiainfoline.com and


www.5paisa.com .

India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and Exchange Board of India). It undertakes equities research
which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's
research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call
and Internet Securities where it is amongst the most read Indian brokers.
Its various subsidiaries are in different lines of business and hence are governed by different regulators. The subsidiaries of India
Infoline Ltd are India Infoline Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the businesses of
Equities broking and Portfolio Management Services. It holds memberships of both the leading stock exchanges of India viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers broking services in the Cash and Derivatives segments of
the NSE as well as the Cash segment of the BSE.A SEBI authorized Portfolio Manager, it offers Portfolio Management Services to
clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the
varied risk-return preferences of client

India Infoline Commodities Pvt Ltd


India Infoline Commodities Pvt Ltd is a 100% subsidiary of
India Infoline Ltd, which is engaged in the business of
commodities broking. Our experience in securities broking
empowered us with the requisite skills and technologies to
allow us offer commodities broking as a contra-cyclical

alternative to equities broking. We enjoy memberships with the


MCX and NCDEX, two leading Indian commodities exchanges,
and recently acquired membership of DGCX. We have a multichannel delivery model, making it among the select few to
online as well as offline trading facilities.

India Infoline Distribution Co Ltd (IILD)

India

Infoline.com

Distribution

Co

Ltd

is

100%

subsidiary of India Infoline Ltd and is engaged in the business


of distribution of Mutual Funds, IPOs, Fixed Deposits and other
small savings products. It is one of the largest 'vendorindependent' distribution houses and has a wide pan-India
footprint of over 232 branches coupled with a huge number of
'feet-on-street', which help source and service customers
across the length and breadth of India. Its unique value
proposition of free doorstep expert advice coupled with free
pick-up and delivery of cheques has been met with an
enthusiastic response from customers and fund houses alike.
Our business has expanded to include the online distribution of
mutual funds, wherein users can view and compare different
product offerings and download application forms which they
can later submit to the product provider
Mortgages & Loans IILD has also entered the business ot
distribution of mortgages and loan products during the year
2005-2006. The business is still in the investing phase and We
plan to roll the business out across its pan-Indian network to
provide it with a truly national scale in operations.

India Infoline Insurance Services Ltd

India Infoline Insurance Services Ltd is also a 100%


subsidiary of India Infoline Ltd and is a registered Corporate
Agent

with

the

Insurance

Regulatory

and

Development

Authority (IRDA). It is the largest Corporate Agent for ICICI


Prudential Life Insurance Co Ltd, which is India's largest private
Life Insurance Company

India Infoline Investment Services Ltd

India Infoline Investment Service Ltd is also a 100%


subsidiary of India Infoline Ltd. It has an NBFC licence from the
Reserve Bank of India (RBI) and offers margin-funding facility
to the broking customers

India Infoline Insurance Brokers Ltd


India Infoline Insurance Brokers Ltd is a 100% subsidiary of
India Infoline Ltd and is a newly formed subsidiary which will
carry out the business of Insurance broking. We have applied
to IRDA for the insurance broking licence and the clearance for
the same is awaited.

Services Offered By India Infoline.

Heres a look at the rocketing list of whats on offer from The India
Infoline Group:
Equity Trading and Stock Broking :Cash and Derivatives segments. Member - BSE and NSE, DP
with NSDL.
Portfolio Management :-

SEBI-registered, backed by a pool of analysts with over 200


man-years in managing portfolios.

Research & Analysis :-

Exhaustive information and data mining, covering the spectrum


of Indian business, industry and financial markets.

Mutual Funds :-

Primary agent for the entire phalanx of leading funds.


Something to suit every risk profile.

Life Insurance :Leading corporate agent of ICICI Prudential Life Insurance


Company, miles ahead of the runner-up!

Commodities Broking :Member of the Multi- Commodities Exchange (MCX). Again,


rock-bottom brokerage and quality research support. Fixed
Income Instruments: From Fixed Deposits, Post Office Saving
schemes to RBI Tax Saving and Infrastructure Bonds.

3.3 SERVICE PROFILE: IPO & ITS MARKETING SCENARIO IN BRIEF


INDIA INFOLINE is one of the leading companies providing services to subscribe to
the IPOs along with regular stock broking services. The company provides very vital
information about all the forthcoming IPOs which is very helpful for the investors to decide
about the investing in the IPOs. It also provides for margin money for IPOs based on the
investment of the investor.

Theoretical Background
Since beginning IPO is one of the major and low cost financing to meet the financial

needs of the corporate world. IPO is the means of financing for setting up a new company as
well as expansion, diversification of the existing companies. Some of the key aspects of IPOs
are as under:

What is an IPO?

An Initial Public Offering of the shares of a companys stock


A way for companies that need capital for growth to sell ownership stakes to
Investors who believe in a companys future prospects. The first offering of the
companies shares to the public. The shares offered may be the existing one held privately, or
the company may issue new shares to the public. A formal public offer consist of an
invitation to the public for subscription of the equity shares, preference shares or debentures
has to be made by a company highlighting the details such as future prospectus, financial
viability and analyze the risk factor so that an investor can take an informed decision to make
an investment for this purpose, the company issue a prospectus in case of public issue and a
letter of offer in case of right issue which is essentially made to its existing share holders this
document generally known as offer document. It has information about business of the
company, promoters and business collaboration, management the board of directors, cost of
the project and the means of finance, status of the project, business prospectus and
profitability, the size of the issue, listing, tax benefits if any and the names of underwriters
and the managers to the issue etc.

Identify Issues
Composition of working group
Structure of offering
Time schedule and assignment of tasks
Legal considerations
Publicity
Financial and accounting matters

Composition of Working Group


Hire the Team
Co-managers
Issuers counsel
Underwriters counsel
Accountants

Organize the Internal Team to Address the Following


Structure
Strategy
Due diligence
Disclosure

Structure of Offering
Size of offering
Primary and secondary components
Number of shares authorized
Existing shareholder list
Lock-up agreements with company, principal shareholders, officers, directors
Selection of listing exchange
Selection of stock symbol
Use of proceeds

Publicity and Promotion of IPO

Quiet period

Industry presentations

Press releases/other corporate announcements

Interviews or articles on company to be published

Extensive use of electronic media such as TV, Website, Mobile Phones etc.

Publicity on hoardings and other public place advertisements.

Road Shows and exhibitions.

Use of Call Center services

Pricing Overview

Once the intended pricing date has been determined, investors are informed of the day
and time on which the book will be closed (i.e., the deadline for submitting
indications of interest)

Once the book has been closed, the lead manager, in consultation with the comanagers, reviews the book of demand in order to assess:
Strength of demand
Price sensitivity
Investors allocation expectations
Likelihood of aftermarket buying/selling

At the time of pricing, the lead manager reviews the book with the Issuer and
recommends an offering price which, in his judgment, will maximize the offering
proceeds to the Issuer consistent with a favorable after market performance.

Once the Issuer and the managers have agreed on an offering price, the underwriting
agreement and the inter syndicate agreements are signed.

Factors Deciding IPO Price:

Promoters and their background.

Current National and Global economic scenario.

Sector specific issues in which company will be operating.

Tie up with financial institutions.

Investors outlook for the company.

Merits of IPO:

Low cost financing

No commitment of fixed returns.

No restrictions attached to financing.

No issues such as mortgaging, hypothecation etc.

Entire money received in one stroke without linking to any milestones.

No issues with returning of finance.

Demerits:

Success of IPO has an element of risk.

IPO can only finance part of the project

IPO performance post listing has also bearing.

For new promoters and new company it is difficult to market their IPOs

3.4 Marketing of INITIAL PUBLIC OFFERs

Introduction:
As stated earlier in the study IPO is one of the low cost financing of new companies

as well as existing companies.


The success of IPOs depends upon many factors such as:

Project Feasibility

Promoters background and past experience

Economic factors

Sector growth

Others

However, the most vital factor influencing success of IPO is marketing of IPOs which
aims at presenting the right kind of information about the above factors in the most
appropriate and impressive way to the target investors so that investors are convinced to
invest in the IPOs

Channels of Marketing:
A detailed study made under this project reveals that most of the good IPOs are using

the following marketing channels widely to have a focused and far reaching impact on the
investors and their decision of investment.
1. Print media
2. Outdoor publicity
3. Institutional marketing
4. Expert opinion
5. Sponsorship of Events
6. Publicity events Business fairs, exhibitions etc

Marketing Mix:
Most of the companies have different marketing (channel) mix to promote their IPOs,

though one can use exhaustively all channels for better marketing of IPOs, but the cost of
IPOs will proportionally increase accordingly.
The company will have to select the marketing mix based on the budgeted cost of the
IPOs. The marketing challenge lies in selecting the right channels wherein the cost is
minimum and the marketing impact on the investors is maximum.

Cost of Marketing:
The cost of marketing of an IPO is the most important factor and every company

wants to keep it at minimum. For each IPO, the cost is fixed well in advance (budget) and the
companies will be operating the marketing of IPOs within this budgeted cost. From the
current study conducted. It is seen that the organization spend heavily on the marketing of
IPOs, as most of them use e-media which is the costliest channel of marketing.
The cost of IPOs varies 5% to 15%. Following are some of the IPO cost which went
into public during 2009-2010

4. Analysis and Interpretation


4.1 PART A: Analysis and Interpretation:
Marketing of IPOs and Channels of Marketing Used:
For the purpose of this study a select list of 10 companies has been used which went
into IPO issue during 2009-10 which used different channels of marketing for their IPOs.
This select list of IPO comprises of Small, Medium and Big IPO issues of 2009-10.
The findings are as under:

Name of the Company:


Godrej Properties Limited
Sector
Real Estate
Size
Rs. 94 Lakhs
Price Band
Rs. 490-530
IPO amount (Rs lakhs)
Rs 584 Lakhs
Channels of Marketing used
Print
Television
Websites
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


Cox & Kings India Limited
Sector
Travel
Size
Rs. 185 Lakhs
Price Band
Rs. 316-330
IPO amount (Rs lakhs)
Rs 61039 Lakhs
Channels of Marketing used
Print
Television
Websites
Mobile
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


India Bulls Power Limited
Sector
Power
Size
Rs. 3398 Lakhs
Price Band
Rs. 40-45
IPO amount (Rs lakhs)
Rs 152970 Lakhs
Channels of Marketing used
Print
Television
Websites
Mobile
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


Pipava Shipyard Limited
Sector
Shipping
Size
Rs. 855 Lakhs
Price Band
Rs. 55-60
IPO amount (Rs lakhs)
Rs 49561 Lakhs
Channels of Marketing used
Print
Television
Websites
Mobile
Hoardings
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


Oil India Limited
Sector
Oil
Size
Rs. 264 Lakhs
Price Band
Rs. 950-1050
IPO amount (Rs lakhs)
Rs 277725 Lakhs
Channels of Marketing used
Print
Websites
Mobile
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


National Hydro Power Corporation (NHPC) Limited
Sector
Power (Public Sector Unit)
Size
Rs. 16774 Lakhs
Price Band
Rs. 30-36
IPO amount (Rs lakhs)
Rs 603855 Lakhs
Channels of Marketing used
Print
Television
Websites
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


Mahindra Holidays & Resorts India Limited.
Sector
Tourism
Size
Rs. 93 Lakhs
Price Band
Rs. 275-325
IPO amount (Rs lakhs)
Rs 27796 Lakhs
Channels of Marketing used
Print
Websites
Hoarding
Publicity/ Expert Opinion
Brokers/ Agents

Name of the Company:


Hathway Cable & Datacom Limited.
Sector
Telecom
Size
Rs. 228 Lakhs
Price Band
Rs. 240-265
IPO amount (Rs lakhs)
Rs 54612 Lakhs
Channels of Marketing used
Print
Websites
Brokers/ Agents

Name of the Company:


Vascon Engineers Limited
Sector
Engineering
Size
Rs. 108 Lakhs
Price Band
Rs. 160-185
IPO amount (Rs lakhs)
Rs 17820 Lakhs
Channels of Marketing used
Print
Websites
Brokers/ Agents

Name of the Company:


Infinite Computer Solutions (India)
Sector
Information Technology
Size
Rs. 115 Lakhs
Price Band
Rs. 155-165
IPO amount (Rs lakhs)
Rs 18980 Lakhs
Channels of Marketing used
Print
Websites
Brokers/ Agents

PERFORMANCE OF IPOs BASED ON MARKETING


For the purpose of this study a select list of 10 companies has been used which went
into IPO issue during 2009-10. This select list of IPO comprises of Small, Medium and Big
IPO issues of 2009-10. The performance is analyzed based on IPO issue price band vis--vis
52 weeks high low and the current market price (closing market price of 10.5.2010)
The findings are as under:

Name of the Company:


Godrej Properties Limited
Sector
Real Estate
Size
Rs. 94 Lakhs
Price Band
Rs. 490-530
IPO amount (Rs lakhs)
Rs 584 Lakhs
Date of IPO
Open: 12-9-2009
Close: 14-9-2009
Listing Date: 5-1-2010
52 Weeks
High: Rs 586.70
Low: Rs 446.90
Current Price: Rs. 486.45
Performance Rating: Average
Grade: 4

Name of the Company:


Cox & Kings India Limited
Sector
Travel
Size
Rs. 185 Lakhs
Price Band
Rs. 316-330
IPO amount (Rs lakhs)
Rs 61039 Lakhs
Date of IPO
Open: 18-11-2009
Close: 20-11-2009
Listing Date: 12-11-2009
52 Weeks
High: Rs. 586.80
Low: Rs. 304.10
Current Price: Rs. 471.00
Performance Rating: Good
Grade: 4

Name of the Company:


India Bulls Power Limited
Sector
Power
Size
Rs. 3398 Lakhs
Price Band
Rs. 40-45
IPO amount (Rs lakhs)
Rs 152970 Lakhs
Date of IPO
Open: 10-10-2009
Close: 15-10-2009
Listing Date: 30-10-2009
52 Weeks
High: Rs. 45.50
Low: Rs 26.00
Current Price: Rs. 30.25
Performance Rating: Bad
Grade: 3

Name of the Company:


Pipava Shipyard Limited
Sector
Shipping
Size
Rs. 855 Lakhs
Price Band
Rs. 55-60
IPO amount (Rs lakhs)
Rs 49561 Lakhs
Date of IPO
Open: 16-9-2009
Close: 18-9-2009
Listing Date: 30-9-2009
52 Weeks
High: Rs. 89.50
Low: Rs. 47.65
Current Price: Rs. 82.90
Performance Rating: Very Good
Grade: 3

Name of the Company:


Oil India Limited
Sector
Oil
Size
Rs. 264 Lakhs
Price Band
Rs. 950-1050
IPO amount (Rs lakhs)
Rs 277725 Lakhs
Date of IPO
Open: 9-9-2009
Close: 12-9-2009
Listing Date: 30-9-2009
52 Weeks
High: Rs. 1374.80
Low: Rs. 1019.00
Current Price: Rs. 1122.10
Performance Rating: Good
Grade: 4

Name of the Company:


National Hydro Power Corporation (NHPC) Limited
Sector
Power (Public Sector Unit)
Size
Rs. 16774 Lakhs
Price Band
Rs. 30-36
IPO amount (Rs lakhs)
Rs 603855 Lakhs
Date of IPO
Open: 17-08-2009
Close: 11-08-2009
Listing Date: 01-09-2009
52 Weeks
High: Rs. 39.75
Low: Rs. 29.5
Current Price: Rs. 29.90
Performance Rating: Bad
Grade: 3

Name of the Company:


Mahindra Holidays & Resorts India Limited.
Sector
Tourism
Size
Rs. 93 Lakhs
Price Band
Rs. 275-325
IPO amount (Rs lakhs)
Rs 27796 Lakhs
Date of IPO
Open: 23-6-2009
Close: 26-6-2009
Listing Date: 16-07-2009
52 Weeks
High: Rs. 574.00
Low: Rs. 306.64
Current Price: Rs. 490.10
Performance Rating: Very Good
Grade: 4

Name of the Company:


Hathway Cable & Datacom Limited.
Sector
Telecom
Size
Rs. 228 Lakhs
Price Band
Rs. 240-265
IPO amount (Rs lakhs)
Rs 54612 Lakhs
Date of IPO
Open: 2-09-2010
Close: 2-11-2010
Listing Date: 25-05-2010
52 Weeks
High: Rs. 246.00
Low: Rs. 189.10
Current Price: Rs. 206.15
Performance Rating: Bad
Grade: 3

Name of the Company:


Vascon Engineers Limited
Sector
Engineering
Size
Rs. 108 Lakhs
Price Band
Rs. 160-185
IPO amount (Rs lakhs)
Rs 17820 Lakhs
Date of IPO
Open: 27-01-2010
Close: 29-01-2010
Listing Date: 15-02-2010
52 Weeks
High: Rs. 173.45
Low: Rs. 119.00
Current Price: Rs. 152.15
Performance Rating: Bad
Grade: 3

Name of the Company:


Infinite Computer Solutions (India)
Sector
Information Technology
Size
Rs. 115 Lakhs
Price Band
Rs. 155-165
IPO amount (Rs lakhs)
Rs 18980 Lakhs
Date of IPO
Open: 11-01-2010
Close: 13-01-2010
Listing Date: 02-03-2010
52 Weeks
High: Rs. 222.90
Low: Rs. 152.75
Current Price: Rs 155.50
Performance Rating: Average
Grade: 2

4.2 PART B: Analysis and Interpretation:


Keeping in mind with the theme of the project and statement of the problem, in order
to facilitate analysis and interpretation of the data and information collected a well defined
questionnaire containing selected 18 questions was framed and given to the various invertors
of INDIA INFOLINE comprising of big, medium and small investors in order to arrive at the
most realistic and correct findings

QUESTIONNAIRES
1. Are you aware of IPOs?

Are you aware about IPO

Valid

Yes
No
Total

Frequency
45
5
50

Percent Valid Percent


90.0
90.0
10.0
10.0
100.0
100.0

Cumulative
Percent
90.0
100.0

Interpretation: 90% investors are well aware of IPOs

2. Do you invest in IPOs?

Do you invest in IPOs?

Valid

Yes
No
Total

Frequency
41
9
50

Percent
82.0
18.0
100.0

Valid Percent
82.0
18.0
100.0

Cumulative
Percent
82.0
100.0

Interpretation: 82% of the investors, invest in IPOs

3. How much do you invest in IPOs?

How much do you invest in IPO's?

Valid

1000-10000
10000-50000
50000-500000
500000 and above
Total

Frequency
2
22
19
7
50

Percent
4.0
44.0
38.0
14.0
100.0

Valid Percent
4.0
44.0
38.0
14.0
100.0

Cumulative
Percent
4.0
48.0
86.0
100.0

Interpretation: 44% of the investors, invest around 10,000 to 50,000


and 38% of investors, invest around 50,000 to 5, 00,000

4. What is your expectation on IPO returns on listing?

What is your expectation on IPO returns?

Valid

upto 10%
10%-50%
50%-100%
100% and above
Total

Frequency
3
17
23
7
50

Percent
6.0
34.0
46.0
14.0
100.0

Valid Percent
6.0
34.0
46.0
14.0
100.0

Cumulative
Percent
6.0
40.0
86.0
100.0

Interpretation: 46% of investors expect about 50% to 100% and


34% investors expect the returns upto 10% - 50%

5. What are your assessments of IPOs that have hit the market in 2010-11?

What are your assessments of IPO that have hit the market for the year
2010-11

Valid

very good

Frequency
3

Percent
6.0

Valid Percent
6.0

Cumulative
Percent
6.0

good

17

34.0

34.0

40.0

average

23

46.0

46.0

86.0

bad

14.0

14.0

100.0

Total

50

100.0

100.0

Intrepretation: 36% of the investors feel the IPOs of the 2009-10


mraket were average and 24 % of investors feel both good and bad.

6. Is it better to invest in IPO or pick the same stocks on listing?

Is it better to invest in IPO or pick the same stock on listing

Valid

invest in IPO
Pick the same stock on
listing
partely invest in IPO and
pick the stock on listing
wait sometime after
listing
Total

Frequency
3

Percent
6.0

Valid Percent
6.0

Cumulative
Percent
6.0

17

34.0

34.0

40.0

23

46.0

46.0

86.0

14.0

14.0

100.0

50

100.0

100.0

Intrepretation: 32% of the investors feel that its better to pick the
same stock on the listing. 28% investors feel they would partly invest
in IPO and pick the stock on listing.
7. What do you see before investing in IPOs?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

Promoters background

18.0

18.0

18.0

sector performance

18

36.0

36.0

54.0

16

32.0

32.0

86.0

premium amount

14.0

14.0

100.0

Total

50

100.0

100.0

performance of existing
companies

Intrepretation: 36% of the investors say they go by sector


performance and 32% of them say they go by the performance of the
existing companies.

8. What is the source of information you use?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

print

15

30.0

30.0

30.0

Electronic media

16.0

16.0

46.0

experts opinion

14

28.0

28.0

74.0

friends advice

13

26.0

26.0

100.0

Total

50

100.0

100.0

Intrpretation: 30% of investor say the source of information is print


media, 16% say electronic media, 28% go with expert opinion and
26% agree to their friends advice.

9. How long are you trading in stock market and IPOs?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

1year-2years

12.0

12.0

12.0

2years-5years

24

48.0

48.0

60.0

5years-10years

14

28.0

28.0

88.0

10years and above

12.0

12.0

100.0

Total

50

100.0

100.0

Intrepretation: 48% investors are trading for 2 years to 5 years

10. What is your advice to new investors in IPO?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

Go by only promoters

14.0

14.0

14.0

go by only premium

15

30.0

30.0

44.0

go by sector performance

21

42.0

42.0

86.0

go by all of the above

14.0

14.0

100.0

Total

50

100.0

100.0

Intrepreatation: 42% investors advice the new investors to go by


only sector performance.

11. Do you go by the grading before investing?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

yes

24

47.1

47.1

47.1

no

27

52.9

52.9

100.0

51

100.0

100.0

Total

Intrepretation: 52% investors does not go by the grading before


investing.

12. How much percentage have you gained on IPO listing?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

below 10%

10

19.6

19.6

19.6

up to 10%

17

33.3

33.3

52.9

10%-15%

17

33.3

33.3

86.3

15% and above

13.7

13.7

100.0

Total

51

100.0

100.0

Intrepretation: 34% of investors say they have gained upto 10% and
10% to 15%
13. How do you come to know about the new IPO listings?

Cumulative

Valid

Frequency

Percent

Valid Percent

Percent

through brokers

10

19.6

20.0

20.0

through television

10

19.6

20.0

40.0

through friends

19

37.3

38.0

78.0

through newspaper

11

21.6

22.0

100.0

Total

50

98.0

100.0

Intrepretation: 38% of the investors come to know about the new


IPO listings through their friends

14. How do you feel about the procedure for applying for IPOs?

Cumulative

Valid

Frequency

Percent

Valid Percent

Percent

Easy

16

30.8

32.0

32.0

difficult

7.7

8.0

40.0

complicated

15.4

16.0

56.0

lengthy

22

42.3

44.0

100.0

Total

50

96.2

100.0

Intrepretation: 44% of the investors feel the proceedure for applying


for an IPO is lengthy, 32% feel easy and simple.

15. Are you aware of the procedures before applying for the IPOs?

Valid

Frequency

Percent

Valid Percent

Cumulative Percent

yes

31

62.0

62.0

62.0

no

19

38.0

38.0

100.0

50

100.0

100.0

Total

Intrepretation: 62 % of investors say yes and 38% says No about the


awareness of the procedures before apllying for IPOs

16. Are you aware of the documents needed to apply for the IPOs?

Cumulative

Valid

Frequency

Percent

Valid Percent

Percent

yes

40

80.0

80.0

80.0

no

10

20.0

20.0

100.0

Total

50

100.0

100.0

Intrepretation: 80 % of the investors are aware of the documents


needed to apply for the IPOs. 20 % feel that they dont know.

17. What difficulties did you face after applying IPOs?

Cumulative

Valid

Frequency

Percent

Valid Percent

Percent

Refund problems

16.0

16.0

16.0

No clarity in allotments

14

28.0

28.0

44.0

15

30.0

30.0

74.0

none of the above

13

26.0

26.0

100.0

Total

50

100.0

100.0

delay in crediting allotted


shares to your demat
account

Intrepretation: 30% of the investors say the delay in crediting


allotted shares to the demat account. 28% say no clarity in allotment
and 26% say they never faced difficuties.

18. Do you read Disclaimer clause/ Red hearing prospectus before investing?

Cumulative
Frequency

Percent

Valid Percent

Percent

yes

16

32.0

32.0

32.0

no

34

68.0

68.0

100.0

Total

50

100.0

100.0

Valid

Intrepretation: 32% investors read about the diclaimer clause and


68% investors does not read the disclaimer clause before investing.

Testing of Hypothesis
Q No. 1Hypothesis

(H0):

less than or equal to 70% of the investors are aware about IPO.

(H1):

More than 70% of the investors are aware about IPO.

Sample size (n) = 50


Method: Z test
H0=P<=70%
H1>P>70%
Standard error of proportion (for population)
p (bar) = p/ n
p(bar)=45/50=0.9
p^=p(p-1)/n-1
p^=0.9(0.9-1)/50-1
p^=0.9(0.1)/49
p^=0.09/49
p^=0.0018
p^=0.042
Critical value = p + 2*p^
=0.7+1.96*0.042
=0.7+0.08232
=0.783

Test Statistic value


P= no. of favourable responses/ Sample size
= 45 / 50

= 0.9
Interpretation
H0 is rejected
H1 is accepted
Therefore More than 70% of the investers are aware about
IPO.

Q No. 2Hypothesis
H0: less than or equal to 75% of the investors are interested to invest in IPO.
H1: More than 75% of the investors are interested to invest in IPO.

Sample size (n) = 50


Method: Z test
H0=P<=75%
H1>P>75%
Standard error of proportion (for population)
p (bar) = p/ n
p(bar)=41/50=0.82
p^=p(p-1)/n-1
p^=0.82(0.82-1)/50-1
p^=0.82(0.18)/49
p^=0.1476/49
p^=0.054
Critical value = p + 2*p^
=0.75+1.96*0.054

=0.75+0.1058
=0.85
Test Statistic value
P= no. of favorable responses/ Sample size
= 41 / 50
= 0.82
Interpretation
H0 is accepted
H1 is rejected
Therefore less than 75% of the investors are interested to invest in IPO.

Q No. 3Hypothesis
H0: less than 70% of the investors agree that they get 50 to 100 percent return on IPO.
H1 More than 70% of the investors agree that they get 50 to 100 percent return on IPO.

Sample size (n) = 50


Method: Z test
H0=P<=70%
H1>P>70%
Standard error of proportion (for population)
p (bar) = p/ n
p(bar)=43/50=0.86
p^=p(p-1)/n-1
p^=0.86(0.86-1)/50-1

p^=0.86(0.14)/49
p^=0.1204/49
p^=0.049
Critical value = p + 2*p^
=0.7+1.96*0.049
=0.75+0.09604
=0.79

Test Statistic value


P= no. of favourable responses/ Sample size
= 43 / 50
= 0.86
Interpretation
H0 is rejected
H1 is accepted
Therefore More than 70% of the investers agree that they get 50 to 100 percent return on
IPO.

5. FINDINGS SUGGESTIONS AND CONCLUSIONS


5.1 Findings

I have completed the project on IPO study through questionnaire methodology of


select 50 investors of INDIA INFOLINE comprising small, medium and big investors. From
the project study I have arrived at the following findings:
1. 90% investors are well aware of IPOs.
2. 82% of the investors invest in IPOs.
3. 44% of the investors, invest around 10,000 to 50,000 and 38% of investors, invest
around 50,000 to 5, 00,000.
4. 46% of investors expect about 50% to 100% and 34% investors expect the returns up
to 10% - 50%.
5. 36% of the investors feel the IPOs of the 2010-11mraket were average and 24 % of
investors feel both good and bad.
6. 32% of the investors feel that its better to pick the same stock on the listing. 28%
investors feel they would partly invest in IPO and pick the stock on listing.
7. 36% of the investors say they go by sector performance and 32% of them say they go
by the performance of the existing companies.
8. 30% of investor say the source of information is print media, 16% say electronic
media, 28% go with expert opinion and 26% agree to their friends advice.
9. 48% invetors are trading for 2 years to 5 years.
10. 42% investors advice the new investors to go by only sector performance.
11. 52% investors does not go by the grading before investing.
12. 34% of investors say they have gained upto 10% and 10% to 15%.

13. 44% of the investors feel the proceedure for applying for an IPO is lengthy, 32% feel
easy and simple.

14. Investors say yes and no at 30% about the awareness of the procedures before
apllying for IPOs.
15. 80% of the investors are aware of the documents needed to apply for the IPOs. 20%
investors are not aware of the documents needed to apply for the IPO.
16. 30% of the investors say the delay in crediting allotted shares to the demat account.
17. 28% say no clarity in allotment and 26% say they never faced difficuties.
18. 32% investors read about the diclaimer clause and 68% investors does not read the
disclaimer clause before investing.

5.2 Suggestions
1. INDIA INFOLINEstock broking ltd must guide their investors and create
confidence in them about investing in IPOs.

2. INDIA INFOLINEStock Broking ltd must contact their investors as and when
good IPOs come.
3. INDIA INFOLINEStock Broking ltd must identify the difficulties faced by
their investors about investing in IPOs.
4. INDIA INFOLINEstock Broking ltd must conduct meetings of their investors
as and when new IPOs come.
5. INDIA INFOLINEstock Broking ltd should ask their clients to get more
investors for them.

5.3 Conclusions
From the study and the research analysis made it can be convincingly concluded that:
1. IPO is one of the cheapest sources of financing.
2. All kinds of investors including small, medium and big go in for IPOs

3. The performance of the IPOs of 2010-11has not been very good due to economic
recessions slump in the global market and expected revival in the IT and other sectors
not forthcoming
4. timing of the IPOs plays a very vital role in the success of the IPOs
5. Price band of the IPOs is very important and IPOs with mid cap price band have by
and large faired well during 2010-11
6. Extensive use of electronic media and very high absorption in IT in IPOs has made
the entire process of IPO marketing quite convenient and smooth.
7. Sector performance as foreseen by the investors also plays and major decisive role in
performance of the IPOs.
8. finally marketing of IPOs has been underlined force behind the success or failure of
the IPOs

BIBLIOGRAPHY

Websites:

www.nseindia.com

www.bseindia.com
www.moneycontrol.com

Books Referred:
Company Manuals

Experts Guidance by:


Sharad. K. kalagi
General Manager

Shri I.M.Ramesh

Asst. General Manager