1.

INTRODUCTION

1.1 INITIAL PUBLIC OFFERING:

The first public offering of equity shares or convertible securities by a company, which
is followed by the listing of a companys shares on a stock exchange, is known as an initial
public offering. In other words, it refers to the first sale of a companys common shares to
investors on a public stock exchange, with an intention to raise new capital.

the most important objective of an ipo is to raise capital for the company. It helps a company to
tap a wide range of investors who would provide large volumes of capital to the company for
future growth and development. A company going for an ipo stands to make a lot of money from
the sale of its shares which it tries to anticipate how to use for further expansion and
development. The company is not required to repay the capital and the new shareholders get a
right to future profits distributed by the company.

1.2 Companies fall into two broad categories: private and public .

A privately held company has fewer shareholders and its owners don't have to disclose much
information about the company. When a privately held corporation needs additional capital, it
can borrow cash or sell stock to raise needed funds. Often "going public" is the best choice for a
growing business. Compared to the costs of borrowing large sums of money for ten years or
more, the costs of an initial public offering are small. The capital raised never has to be repaid.
When a company sells its stock publicly, there is also the possibility for appreciation of the share
price due to market factors not directly related to 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 jurisdiction such as indian companies act 1956. It usually isn't possible to buy
shares in a private company. One 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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1.3 Why go public??

Before deciding whether one should complete an ipo, it is important to consider the positive and
negative effects that going public may have on their mind. Typically, companies go public to
raise and to provide liquidity for their shareholders. But there can be other benefits. Going public
raises cash and usually a lot of it being publicly traded also opens many financial doors:

Because of the increased scrutiny, public companies can usually get better rates when
they issue debt.
As long as there is market demand, a public company can always issue more stock.
Thus, mergers and acquisitions are easier to do because stock can be issued as part of the
deal.
Trading in the open markets means liquidity. This makes it possible to implement things
like employee stock ownership plans, which help to attract top talent.
Going public can also boost a companys reputation which in turn, can help the
Company to expand in the marketplace.

1.4 Pricing of IPOs:

The pricing of an ipo is a very critical aspect and has a direct impact on the success or failure of
the ipo issue. There are many factors that need to be considered while pricing an ipo and an
attempt should be made to reach an ipo price that is low enough to generate interest in the market
and at the same time, it should be high enough to raise sufficient capital for the company.

The process for determining an optimal price for the ipo involves the underwriters arranging
share purchase commitments from leading institutional investors.

1.4.1Process:

Once the final prospectus is printed and distributed to investors, company management meets
with their investment bank to choose the final offering price and size. The investment bank tries
to fix an appropriate price for the ipo depending upon the demand expected and the capital
requirements of the company.

The pricing of an ipo is a delicate balancing act as the investment firms try to strike a balance
between the company and the investors. The lead underwriter has the responsibility to ensure

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smooth trading of the companys stock. The underwriter is legally allowed to support the price of
a newly issued stock by either buying them in the market or by selling them short.

1.4.2IPO pricing differences:

It is generally noted, that there is a large difference between the price at the time of issue of an
initial public offering (ipo) and the price when they start trading in the secondary market.

These pricing disparities occur mostly when an ipo is considered hot, or in other words, when
it appeals to a large number of investors. An ipo is hot when the demand for it far exceeds the
supply.

This imbalance between demand and supply causes a dramatic rise in the price of each share in
the first day itself, during the early hours of trading.

1.4.2.1Under pricing:

The pricing of an ipo at less than its market value is referred to as under pricing. In other
words, it is the difference between the offer price and the price of the first trade.

Historically, IPOs have always been underpriced. Underpriced ipo helps to generate additional
interest in the stock when it first becomes publicly traded. This might result in significant gains
for investors who have been allocated shares at the offering price. However, under pricing also
results in loss of significant amount of capital that could have been raised had the shares been
offered at the higher price

1.4.2.2Overpricing:

The pricing of an IPOs at more than its market value is referred to as overpricing. Even
overpricing of shares is not as healthy option. If the stock is offered at a higher price than what
the market is willing to pay, then it is likely to become difficult for the underwriters to fulfill
their commitment to sell shares. Furthermore, even if the underwriters are successful in selling
all the issued shares and the stock falls in value on the first day itself of trading, then it is likely
to lose its marketability and hence, even more of its value.

1.5 TYPE OF ISSUES

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1.5.1 Book building process

Book building is basically a capital issuance process used in initial public offer (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 the period for which the book for the ipo is open, bids
are collected from investors at various prices, which are above or equal to the floor price. The
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.

1.5.1.1 The process:

The issuer who is planning an IPO nominates a lead merchant banker as a 'book runner'.
The issuer specifies the number of securities to be issued and the price band for orders.
The issuer also appoints syndicate members with whom orders can be placed by the
investors.
Investors place their order with a syndicate member who inputs the orders into the
'electronic book'. This process is called 'bidding' and is similar to open auction.
A book should remain open for a minimum of 5 days.
Bids cannot be entered less than the floor price.
Bids can be revised by the bidder before the issue closes.
on the close of the book building period the 'book runner evaluates the bids on the basis
of the evaluation criteria which may include -
Price aggression
Investor quality
Earliness of bids, etc.
The book runner the company concludes the final price at which it is willing to issue the
stock and allocation of securities.
Generally, the numbers of shares are fixed; the issue size gets frozen based on the price
per share discovered through the book building process.
Allocation of securities is made to the successful bidders.
Book building is a good concept and represents a capital market which is in the process
of maturing. Book-building is all about letting the company know the price at which you
are willing to buy the stock and getting an allotment at a price that a majority of the
investors are willing to pay. The price discovery is made depending on the demand for
the stock.

The price that you can suggest is subject to a certain minimum price level, called the floor price.
For instance, the floor price fixed for the maruti's initial public offering was rs 115, which means

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that the price you are willing to pay should be at or above rs 115. In some cases, as in biocon, the
price band (minimum and maximum price) at which you can apply is specified. A price band of
rs 270 to rs 315 means that you can apply at a floor price of rs 270 and a ceiling of rs 315.

If you are not still very comfortable fixing a price, do not worry. You, as a retail investor, have
the option of applying at the cut-off price. That is, you can just agree to pick up the shares at the
final price fixed. This way, you do not run the risk of not getting an allotment because you have
bid at a lower price. If you bid at the cut-off price and the price is revised upwards, then the
managers to the offer may reduce the number of shares allotted to keep it within the payment
already made. You can get the application forms from the nearest offices of the lead managers to
the offer or from the corporate or the registered office of the company.

1.5.1.2 How is the price fixed?

All the applications received till the last date is analyzed and a final offer price, known as the
cut-off price is arrived at. The final price is the equilibrium price or the highest price at which all
the shares on offer can be sold smoothly.

If your price is less than the final price, you will not get allotment. If your price is higher than the
final price, the amount in excess of the final price is refunded if you get allotment. If you do not
get allotment, you should get your full refund of your money in 15 days after the final allotment
is made. If you do not get your money or allotment in a month's time, you can demand interest at
15 per cent per annum on the money due.

1.5.1.3How are shares allocated?

As per regulations, at least 25 per cent of the shares on offer should be set aside for retail
investors. Fifty per cent of the offer is for qualified institutional investors. Qualified
institutional bidders (qib) is specified under the regulation and allotment to this class is
made at the discretion of the company based on certain criteria.

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 Qibs can be mutual funds, foreign institutional investors, banks or insurance companies.
If any of these categories is under-subscribed, say, the retail portion is not adequately
subscribed, then that portion can be allocated among the other two categories at the
discretion of the management. For instance, in an offer for two lakh shares, around
50,000 shares (or generally 25 per cent of the offer) are reserved for retail investors. But
if the bids from this category are received are only for 40,000 shares, then 10,000 shares
can be allocated either to the qibs or non-institutional investors.

1.5.2FIXED PRICE PROCESS:

The traditional method of doing IPOs is the fixed price offering. Here, the issuer and the
merchant banker agree on an "issue price" - e.g. Rs.100. Then one has the choice of filling
in an application form at this price and subscribing to the issue. Extensive research has
revealed that the fixed price offering is a poor way of doing IPOs. Fixed price offerings, all
over the world, suffer from `IPOs under pricing'. In India, on average, the fixed-price seems
to be around 50% below the price at first listing; i.e. the issuer obtains 50% lower issue
proceeds as compared to what might have been the case. This average masks a steady
stream of dubious ipos who get an issue price which is much higher than the price at first
listing. Hence fixed price offerings are weak in two directions: dubious issues get overpriced
and good issues get underpriced, with a prevalence of under pricing on average.

What is needed is a way to engage in serious price discovery in setting the price at the IPOs. No
issuer knows the true price of his shares; no merchant banker knows the true price of the shares;
it is only the market that knows this price. In that case, can we just ask the market to pick the
price at the ipo?

Imagine a process where an issuer only releases a prospectus, announces the number of shares
that are up for sale, with no price indicated. People from all over india would bid to buy shares in
prices and quantities that they think fit. This would yield a price. Such a procedure should
innately obtain an issue price which is very close to the price at first listing -- the hallmark of a
healthy ipo market.

Recently, in india, there had been issue from hughes software solutions which was a milestone in
our growth from fixed price offerings to true price discovery ipos. While the hss issue has many

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positive and fascinating features, the design adopted was still riddled with flaws, and we can do
much better.

1.6 DOCUMENTS REQUIRED:

A company coming out with a public issue has to come out with an offer document/ prospectus.
An offer document is the document that contains all the information you need about the
company. It will tell you why the company is coming is out with a public issue, its
financials and how the issue will be priced.
The draft offer document is the offer document in the draft stage. Any company making
a public issue is required to file the draft offer document with the securities and exchange
board of india, the market regulator.
If sebi demands any changes, they have to be made. Once the changes are made, it is filed
with the registrar of companies or the stock exchange. It must be filed with sebi at least
21 days before the company files it with the roc/ stock exchange. During this period, you
can check it out on the sebi web site.
Red herring prospectus is just like the above, except that it will have all the information
as a draft offer document; it will, however, not have the details of the price or the number
of shares being offered or the amount of issue. That is because the red herring prospectus
is used in book building issues only, where the details of the final price are known only
after bidding is concluded.

1.7 PLAYERS:
Co-managers and advisors
Underwriters
lead managers
Bankers
Brokers and principal brokers
Registrars
Stock exchanges

1.8 PRINCIPAL STEPS IN AN IPOS:

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Approval of bod: approval of bod is required for raising capital from the public.

Appointment of lead managers: the lead manager is the merchant banker who
Orchestrates the issue in consultation of the company.

Appointment of other intermediaries:

- Co-managers and advisors
- Underwriters
- Bankers
- Brokers and principal brokers
- Registrars

Filing the prospectus with sebi: the prospectus or the offer document
Communicates information about the company and the proposed security issue to the investing
public. All the companies seeking to make a public issue have to file their offer document with
sebi. If sebi or public does not communicate its observations within 21 days from the filing of the
offer document, the company can proceed with its public issue.

Filing of the prospectus with the registrar of the companies: once the
Prospectus have been approved by the concerned stock exchanges and the consent obtained from
the bankers, auditors, registrar, underwriters and others, the prospectus signed by the directors,
must be filed with the registrar of companies, with the required documents as per the companies
act 1956.

Printing and dispatch of prospectus: after the prospectus is filled with

The registrar of companies, the company should print the prospectus. The quantity in which
prospectus is printed should be sufficient to meet requirements. They should be sending to the

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stock exchanges and brokers so they receive them at least 21 days before the first announcement
is made in the news papers.

Filing of initial listing application: within 10 days of filing the prospectus, the initial listing
application must be made to the concerned stock exchanges with
The listing fees.

Promotion of the issue: the promotional campaign typically commences with the filing of the
prospectus with the registrar of the companies and ends with the release of the statutory
announcement of the issue.
Statutory announcement: the issue must be made after seeking approval of the stock
exchange. This must be published at least 10 days before the opening of
The subscription list.

Collections of applications : the statutory announcement specifies when the subscription would
open, when it would close, and the banks where the applications can be made. During the period
the subscription is kept open, the bankers will collect the applications on behalf of the company.

Processing of applications: scrutinizing of the applications is done.

Establishing the liability of the underwriters: if the issue is undersubscribed, the liability of
the underwriters has to be established.

Allotment of shares: proportionate system of allotment is to be followed.

Listing of the issue: the detail listing application should be submitted to the concerned stock
exchange along with the listing agreement and the listing fee. The
Allotment formalities should be completed within 30 days.

Book building is the process of price discovery (basic concept)

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The company does not come out with a fixed price for its shares; instead, it indicates a price
band that mentions the lowest (referred to as the floor) and the highest (the cap) prices at which a
share can be sold.

Bids are then invited for the shares. Each investor states how many shares s/he wants and what
s/he is willing to pay for those shares (depending on the price band). The actual price is then
discovered based on these bids. As we continue with the series, we will explain the process in
detail.
According to the book building process, three classes of investors can bid for the
Shares:
1. Qualified institutional buyers: mutual funds and foreign institutional investors.
2. Retail investors: anyone who bids for shares under rs 50,000 is a retail investor.
3. High net worth individuals and employees of the company.

Allotment is the process whereby those who apply are given (allotted) shares. The bids are first
allotted to the different categories and the over-subscription (more shares applied for than shares
available) in each category is determined. Retail investors and high net worth individuals get
allotments on a proportional basis.

1.9 ANALYZING AN IPOs INVESTMENT

1.9.1 Potential investors and their objectives:

Initial public offering is a cheap way of raising capital, but all the same it is not considered as the
best way of investing for the investor. Before investing, the investor must do a proper analysis of
the risks to be taken and the returns expected. He must be clear about the benefits he hope to
derive from the investment. The investor must be clear about the objective he has for investing,
whether it is long-term capital growth or short-term capital gains.

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The potential investors and their objectives could be categorized as:

Income investor:
An income investor is the one who is looking for steadily rising profits that will be distributed
to shareholders regularly. For this, he needs to examine the company's potential for profits and its
dividend policy.

Growth investor:
A growth investor is the one who is looking for potential steady increase in profits that are
reinvested for further expansion. For this he needs to evaluate the company's growth plan,
earnings and potential for retained earnings.

Speculator:
A speculator looks for short-term capital gains. For this he needs to look for potential of an
early market breakthrough or discovery that will send the price up quickly with little care about a
rapid decline.

1.10 BEFORE INVESTMENT :

Understand the working of IPOs:

The first and foremost step is to understand the working of an ipo and the basics of an investment
process. Other investment options could also be considered depending upon the objective of the
investor.

Gather knowledge:

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It would be beneficial to gather as much knowledge as possible about the ipo market, the
company offering it, the demand for it and any offer being planned by a competitor.

Investigate before investing :

The prospectus of the company can serve as a good option for finding all the details of the
company. It gives out the objectives and principles of the management and will also cover the
risks.

Know your broker:

This is a crucial step as the broker would be the one who would majorly handle your money. Ipo
allocations are controlled by underwriters. The first step to getting ipo allocations is getting a
broker who underwrites a lot of deals.

Measure the risk involved:

Ipo investments have a high degree of risk involved. It is therefore, essential to
Measure the risks and take the decision accordingly.

Invest at your own risk:

Finally after the homework is done and the big step needs to be taken all that can be suggested is
to invest at your own risk. Do not take a risk greater than your
Capacity.

2 COMPANY PROFILE

Way2wealth has established as one of Indias premier investments consultancy firms, known for
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and benefit of our customers. They service customer relationships through a team of over 1000
wealth managers spread across 100 easily accessible 'investment outlets' in almost all major towns

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and cities in india.

2.1 TRADING PRODUCTS :

Way2wealth is a full services broking and advisory house combining the best of tradition with
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We are members with all major national exchanges in the country i.e. Nse, bse, mcx as
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Equity
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Commodity derivatives, and
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At way2wealth trading goes one step beyond plain execution being backed by sound research,
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Trade execution is supported by in-house depository services to ensure smooth and speedy
settlement of post-trade activities.

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2.2 PORTFOLIO MANAGEMENT
Our portfolio management services is an exclusive offering from way2wealth that specializes in
providing risk managed investment solutions to discerning high networth individuals, non
resident indians (nris), overseas corporate bodies (ocbs) and indian corporates.

Our discretionary portfolio management service gives investors the benefit of unbiased
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2.2.1Corporate advisory

Way2wealth today services over 200 smes and corporates for their treasury management,
hedging programs, esop structuring and employee tax planning.

2.2.2 Specifically company offer the following services:

Treasury management

w2w advises institutional and wholesale investors for their investments in various asset
classes to help manage their treasuries and optimize the portfolio yields. A structured
methodology is employed for assessment, portfolio modeling, performance measurement
and periodic review.

Hedging in commodities and currencies

w2w has a specialized team, with vast experience in domestic and global markets,
advising corporates and smes in their hedging programs.

We help clients roll out their hedging policies, define optimum hedge scenarios with due
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optimizing the entry and exit points for successful implementing of hedging strategies.

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 Esop planning and advisory

esop planning, structuring and plan execution are important tasks for corporates planning
to issue esops to their employees. We extend comprehensive assistance in the entire
process. Further, we also assist corporate employees in sourcing esop loans through our
tie-ups.

Tax filing and financial planning to employees

essentially an employee welfare initiative by corporates, we assist this initiative by

rolling out temporary kiosks at work sites during the tax filing season. Corporate
employees get spot advice and assistance in filing and submission of their income tax
returns through qualified chartered accounts.

2.3REASON FOR THE STUDY

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 Public issues are the main reason for increased interest of retail investors in stock market.
But compared to the year of 2003-2007, IPOs are not attracting the retail investors in the current
state (i.e)mainly after 2008 recession. So in this situation it is very important to study this topic
to analyse the critical issues in public issue market.

2.4 OBJECTIVES OF THE STUDY

To study about the performance of the public issue listed in Indian Stock Market for the
year 2010.
To know about the future prospects of the public issue market in India.
To study about the process of public issue.

2.6 SCOPE
This study helps in finding out the scope for the investment in public issue.
This study also helps in finding out the factors that influence performance of the
companys shares in the stock market.
2.7 LIMITATIONS OF THE STUDY:-

1. The non-availability of data for few companies which could not be considered for this
analysis purpose.
2. The volatility and the changing market conditions, which do have an impact on the
prices of the shares and thus the returns generated thereof, could not be avoided.
3. The other limitation of this study was the shortage of time for completing such a vast
topic, due to which the sample of limited companies on NSE has been taken.

2.8 RESEARCH METHODOLOGY

The study is based on the secondary data. Secondary data has been collected from the websites
of National Stock Exchange of India, Bombay stock exchange of India, SEBI and different
magazines, journals etc.
Total Companies listed in the year 0f 2010 in Indian stock market is 74 companies.
And the researcher has analysed the performance of these 74 companies by using the
indicators like volume traded, return, dividend, EPS, book value, price on listing day

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 ,price on fixed intervals. And for this the researcher has used the tools like charts, rank,
percentage.
For the future prospects of the public issue market, various magazines were referred and
analyzed.
Ideas were gathered from various experts from stock broking firms.
The initial return on IPOs has been computed as the difference between the closing price
on the first day of trading and the offer price, divided by the offer price.

R_Ret. = [P1 Po/ Po] * 100 --------------------- (i)

Where R_Ret. = subscribers initial return (hereafter raw return)

P1 = closing price on the first day of trading
Po = Offer price

BOOK VALUE

It is the total value of the company's assets that shareholders would theoretically receive if a
company were liquidated. By being compared to the company's market value, the book value can
indicate whether a stock is under- or overpriced.
EARNINGS PER SHARE

The portion of a company's profit allocated to each outstanding share of common stock. An
earnings per share serves as an indicator of a company's profitability.

DIVIDEND

It is the portion of corporate profits paid out to stockholders

OVERSUBSCRIBED

A situation in which the demand for an initial public offering of securities exceeds the number of
shares issued.

3. 2011 IPO OUTLOOK

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3.1Asian

3.1.1Greater china. In 2011, greater china looks set to maintain its five-year-long leadership of
global ipo markets. Although growing inflation and the absence of jumbo ipos may moderate
Chinese ipo volumes, Hong Kong, the most active exchange in 2010, is expected to remain the
world leader and raise over us$50 billion in 2011. Larger non-Asian companies, especially in the
natural resources sector, are also expected to list in hong kong. Financial, consumer products,
industrials and resources listings will be most prevalent in hong kong and shanghai.

3.1.2 India. Propelled by indias 8% gdp growth rate and healthy corporate earnings and
prospects, indias ipo markets will continue their dramatic recovery. More than 100 companies
are expected to pursue ipos and follow-on offerings, spurred by the countrys us$10 billion
government privatization program and its massive us$1 trillion infrastructure investment plan.

3.1.3 Americas ipo outlook

Us. At the end of February 2011, the growing us backlog contained about 150 companies slated
to raise around us$40 billion. The pipeline includes private equity (pe) and venture capital (vc)
backed companies, fast-growth companies in technology, health care and real estate, companies
based in china, large company spin-offs and us companies backed by money from the troubled
asset relief program (tarp).

Brazil and Latin America. In 2011, brazil expects about 30 ipos with an average deal size of
us$500 million, in the retail, oil and gas and mining sectors in particular. Brazils ipo markets
have been fueled by its 5% gdp growth rate, foreign capital inflows, the governments
infrastructure investment plan and high domestic consumption levels. Mexico, argentina and
chile will also see new issuances.

3.1.4 European ipo outlook

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Uk. The uk pipeline of potential ipo candidates remains strong. Numerous crossborder listings
on the london stock exchange (lse) main market are expected, most notably from emerging
market-facing companies. Europes financial institutions, including spin-offs from over-
leveraged banks, could be the source of the largest ipo prospects.

Germany. Germany anticipates approximately 20 small cap ipos from diverse industries to list
on the entry standard segment of the deutsche bores .eastern europe and russia. The
governments of poland and czech republic will continue to sell off state-owned assets to generate
revenue. After russias severe economic contraction in 200809, surging oil prices, state
privatizations and a capital

3.2 2010 key trends

In 2010, global ipo activity recovered to pre-financial crisis levels (us$284.6 billion, 1,393
ipos) and reached the second-highest fund-raising amount ever, after 2007. After two years of
quiescent ipo markets during the global financial crisis and recession, 2010s healthy ipo
volumes represent more than double the amount raised during either 2008 or 2009.

Source:www.ey.com chart:A

Global ipo markets saw a choppy revival in the first three quarters of 2010, followed by a
record fourth quarter. In the first three quarters, investor worries over eurozone sovereign debt,

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sweeping regulatory changes, government reductions of stimulus packages and limited access to
credit led to numerous ipo withdrawals, postponements and highly discounted pricing
worldwide. However, investor confidence improved over the course of the year. Driven by asian
growth, pent-up demand for capital, sales of government-held assets and financial and industrial
institution spin-offs, q4 saw the highest quarterly total capital raised on record (us$131.5 billion,
484 deals).

2010 saw the worlds largest ipo ever and other high-profile jumbo ipos. The largest ipo ever
was the us$22.1 billion offering of the state-owned commercial bank agricultural bank of china
followed in size by the second-largest ipo ever the us$20.5 billion listing of aia, the main
asian life insurance unit of aig group. And the return to the public markets of us automaker

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general motors for us$18.1 billion marked the third-largest ipo globally in 2010.

Source:www.ey.com chart:B

Financial and infrastructural sectors prevailed, although ipos were quite diverse. Investors
continued to assess ipos on a company-specific basis. The financial sector led by volume, at
us$80 billion, with 28% of the global capital raised, thanks largely to 3 jumbo asian insurance
companies that made up three of the top 10 ipos. They included the aia listing; the us $11.1
billion dai-ichi life insurance listing, the second-largest japanese ipo on record; and the us$4.4

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billion samsung life insurance co. Ltd., south koreas largest ipo ever. Propelled by continuing
emerging market demand for commodities and global demand for energy, the industrial and
materials sectors were also very active.

Source:www.ey.com chart:C

Asian issuers, particularly china and hong kong, continued to lead ipo activity in a five-year
trend begun in 2006. Asia raised the most ipo capital on record, making up almost 65% of global
proceeds (us$183.9 billion, 789 deals). Greater china achieved record highs for fund-raising,
accounting for 46% of global funds raised (us$131.8 billion in 509 deals) a huge 165%
increase from 2009.

In 2010, southeast asian issuers also raised the most capital ever, at 6% of global capital raised
(us$17.5 billion, 109 deals). Activity was led by malaysia (us$7.0 billion in 33 ipos), singapore
(us$5.9 billion in 24 ipos) and indonesia (us$3.4 billion in 24 ipos). Malaysias us$4.2 billion
offering of petronas chemicals was the largest southeast asian ipo ever.

RLIMS Page 22
 Us ipo markets were rejuvenated by small-cap high-tech and energy companies and the return
of pe and vc exits. Us exchanges launched the highest total since 2007 (us$43.5 billion in 163
ipos), albeit with a smaller-than-average deal size (us$267 million). Almost two-thirds of ipos
were backed by pe or vc firms. Historically the global ipo leader, the us raised just 15% of global
capital, well below its past 10-year average levels of 28%.

Europe saw a choppy ipo revival due to euro zone sovereign debt concerns. Even so, by the end
of 2010, ipos on european exchanges raised the highest volume since 2007 (us$36.7 billion in
252 deals), a huge 395% fund-raising increase from 2009. European ipos were revitalized by
polish state privatizations, london cross-border listings, pe-backed ipos and robust emerging
market demand for commodities. Europe represented a 13% global ipo market share, compared
with its past 10-year average level of 25%.

Pe-backed ipos made a comeback (us$35 billion raised in 155 deals), particularly in the us and
europe. The amount was more than double the us$16.8 billion raised in 2009, and almost three
times what sponsors raised in the trough of the recession in 2008. Nonetheless, activity is still
behind the peak of the cycle, when pe firms raised more than us$58 billion taking companies
public in 2007. On average, pe-backed ipos returned 27.2% in 2010. The pe-backed ipo after-
market stock performance and pipeline are likely to remain strong in 2011.

Among world exchanges, hong kong was the most active exchange for the second consecutive
year (us$57.4 billion), up 162% from 2009. It was followed in volume by shenzhens sme and
chinext boards, chinas venue for small, high-growth companies, (us$44.3 billion) and the new

RLIMS Page 23
york stock exchange (us$34.7 billion).

Source:www.ey.com chart D

Numerous cross-border listings reflected increased globalization of capital markets. Attracted

by higher valuations and strong liquidity, non-asian companies began to make primary listings in
hong kong, including the us$2.2 billion ipo of the worlds largest aluminum producer, russias

RLIMS Page 24
rusal. At the same time, 41 chinese companies listed on us exchanges, the majority of which
were very well-received.

The world exchange industry continued to consolidate, with many prospective mergers
underway. Although the consolidation is not likely to have a direct impact on the number of ipos,
2010 saw new exchanges emerge that would offer new opportunities and sources of finance. The
proposed partnerships of the nyse euronext/deutsche brse, the australian/singapore stock
exchanges and the london/toronto/mongolia stock exchanges would improve the liquidity of the
newly combined exchanges and their global competitiveness.

Secondary market played an increasingly significant role in raising company profiles and
increasing investor bases. Their popularity also reflects the ever increasing cross-border nature of
capital markets and investor desire for emerging markets exposure. Compared to global ipos,
which made up 31% of total capital market activity, follow-on offerings represented more than
half (57%), with us$515.5 billion raised in 4,062 deals, down 26% in funds raised from 2009.

2010 saw the worlds largest follow-on offering ever the us$70.1 billion listing

In 2011, indias ipo markets will be strong, driven by an 8% gdp growth rate, healthy corporate
earnings and steady growth in corporate profits. More than 100 indian companies are expected
to raise resources via ipos and follow-on offerings.

India saw a dramatic recovery in its ipo markets in 2010. This revival has been a domestic
consumption ledgrowth story, driven by an influx of capital from western economies and a
booming local stock market. India saw a growth of 215% in the number of ipos compared to
2009.

2010 saw a string of ipos and follow-on offerings from many previously state-owned
enterprises in the materials sector such as steel, oil and gas all of which helped the Indian
government raise funds to build roads, ports and power plants. This materials sector activity
stems from Indias us$10 billion divestment program that spawned the largest ipo in India ever,
the listing of the worlds largest coal producer, us$3.4 billion coal India, a former state-owned
enterprise.

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 Driving industrial ipo activity is Indias investment plan to modernize its infrastructure worth
us$1 trillion. This program has led to many new listings in the energy and power, natural
resources, building and construction sectors

4. SECTOR WISE RETURN

4.1BANKING SECTOR

Table: 1.1Return on banking sector as on 28.02.2011

Company Return
standard chartered plc 7.69%
punjab & sind bank -14.88%
united bank of india 38.33%
Source: http://www.chittorgarh.com

Chart 1.1 Returns on banking sector as on 28.02.2011

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Source: table 1.1

In banking sector two companies shows positive return and one company shows negative
return
In that standard chartered plc showe 7.6% return and united bank of india shows 38.33%
And punjab &sind bank shows 14.88%

4.2 BREWERIES & DISTILLERIES:

Table: 1.2 Return on breweries and distilleries sector as on 28.02.2011

Company Return
ravikumar distilleries ltd -57.19%

Source: http://www.chittorgarh.com

Chart : 1.2Return on breweries and distilleries sector as on 28.02.2011

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Source: table 1.2

In breweries & distilleries sector only one company is listed

Ravikumar distilleries ltd shows negative return of 57.19%

4.3 CHEMICALS:

Table: 1.3Return on chemicals sector as on 28.02.2011

Company Return
aster silicates ltd -77.92%
Source: http://www.chittorgarh.com

Chart : 1.3Return on chemicals sector as on 28.02.2011

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Source: table 1.3

In chemical sector there is only one company in listed

Aster silicates ltd shows negative return 77.92%

4.4 CONSTRUCTION AND REAL ESTATE:

Table: 1.4 Return on construction and real estate sector as on 28.02.2011

Company Return
arss infrastructure projects limited 42.43%

mbl infrastructures ltd -0.81%

prestige estates projects ltd -35.52%
oberoi realty limited 1.96%
ashoka buildcon limited -23.44%

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ramky infrastructure limited -34.39%
jaypee infratech limited (jil) -42.70%
nitesh estates limited -56.67%
db realty limited -77.15%
godrej properties limited 20.60%
rpp infra projects ltd -16.33%

Source: http://www.chittorgarh.com

Chart : 1.4 Return on construction and real estate sector as on 28.02.2011 Source: table 1.4
In construction and real estate sector 11 companies are listed

In that only three company shows positive return

And remaining 8 company shows negative return

4.5 CONSUMER FOOD:

Table: 1.5Return on consumer food sector as on 28.02.2011

Company Return
jubilant foodworks ltd 263.21%

Source: http://www.chittorgarh.com

Chart : 1.5Return on consumer food sector as on 28.02.2011

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Source: table 1.25

In consumer food sector only one is listed

jubilant food works ltd shows return of 263%

4.6 DIAMOND & JEWELRY:

Table: 1.6Return on diamond and jewelry sector as on 28.02.2011

Company Return
goenka diamond & jewels ltd -56.00%

shree ganesh jewellery house ltd -41.88%

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thangamayil jewellery limited 113.33%

Source: http://www.chittorgarh.com

Chart : 1.6Return on diamond and jewelry sector as on 28.02.2011

Source: table 1.6

In jewelry sector there are three companies listed
In that thangamayil jewelery shows positive return
And other company shows negative return return

4.7ELECTRIC EQUIPMENT:

Table: 1.7Return on electric equipment sector as on 28.02.2011

Company Return
indosolar limited -38.28%
tarapur transformers limited -69.87%

Source: http://www.chittorgarh.com

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Chart : 1.7Return on electric equipment sector as on 28.02.2011

Source: table 1.7

In electric company two company are listed

In that both the two company shows negative return
indosolar limited shows 38.22% and tarapur transformers limited shows -67.8%

4.8 ENGINEERING CONSTRUCTION:

Table: 1.8Return on engineering-construction sector as on 28.02.2011

Company Return
engineers india ltd -0.84%
va tech wabag limited -2.95%
technofab engineering ltd -35.06%

il&fs transportation networks ltd -20.16%

man infraconstruction ltd -36.77%

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vascon engineers limited -40.88%
tecpro systems ltd -20.77%
Source: http://www.chittorgarh.com

Chart : 1.8Return on engineering-construction sector as on 28.02.2011

Source: table 1.28

In engineering and construction sector there are seven companies are listed
All the seven companies are showing negative return

4.9FILM PRODUCTION, DISTRIBUTION & ENTERTAINMENT:

Table: 1.9Return on film production sector as on 28.02.2011

Company Return
dq entertainment (international) ltd -14.69%

Source: http://www.chittorgarh.com

Chart : 1.9Return on film production sector as on 28.02.2011

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Source: table 1.9

In film production, distribution &entertainment sector only one company is listed

dq entertainment (international) ltd shows negative return of 14.69%

4.10 FINANCE:

Table: 1.10 Return on finance sector as on 28.02.2011

Company Return
microsec financial services ltd -65.21%

sks microfinance ltd -38.06%

rural electrification corporation ltd 13.50%

RLIMS Page 35
Source: http://www.chittorgarh.com

Chart : 1.10 Return on finance sector as on 28.02.2011

Source: table 1.10

In finance sector there companies are listed

In that only one company shows positive return rural electrification corporation ltd shows
13%

And other two company shows negative return

4.11HOUSEHOLD & PERSONAL PRODUCTS:

Table: 1.11Return on household and personal product sector as on 28.02.2011

Company Return
bajaj corp limited -23.97%

Source: http://www.chittorgarh.com

Chart : 1.11Return on household and personal product sector as on 28.02.2011

RLIMS Page 36
Source: table 1.11

In household & personal products sector only one company is listed

bajaj corp limited shows negative return -23.97%

4.12 IT SOFTWARE
Table: 1.12Return on IT sector as on 28.02.2011

Company Return
career point infosystems ltd 8.40%

intrasoft technologies limited -52.07%

persistent systems limited 23.76%

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infinite computer solutions india ltd -4.91%

birla shloka edutech limited -66.70%

Source: http://www.chittorgarh.com

Chart : 1.12Return on IT sector as on 28.02.2011

Source: table 1.12

In IT sector totally five companies are listed

In that two companies shows positive return career point infosystems ltd shows 8.4% and
persistent systems limited shows 23.76%
Remaining three company shows negative return.

4.13 LOGISTICS
Table: 1.13Return on logistics sector as on 28.02.2011

Company Return
aqua logistics ltd -92.07%

Source: http://www.chittorgarh.com

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Chart : 1.13Return on logistics sector as on 28.02.2011

Source: table 1.13

In logistics sector only one company is listed

Aqua logistics ltd shows negative return -92.07%

4.14 MINING & MINERALS

Table: 1.14 Return on mining and minerals sector as on 28.02.2011

Company Return
gravita india limited 91.00%

moil limited 5.51%

coal india limited 19.14%

RLIMS Page 39
Source: http://www.chittorgarh.com

Chart : 1.14 Return on mining and minerals sector as on 28.02.2011

Source: table 1.14

In mining and minerals sector three companies are listed

in that india largest ipo coal india limited shows 19.14%
gravita india limited shows 91% and moil limited shows 5.51%

4.15 PACKAGING
Table: 1.15 Return on packaging sector as on 28.02.2011

Company Return
midfield industries ltd -63.23%

emmbi polyarns limited -70.33%

Source: http://www.chittorgarh.com

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Chart : 1.15 Return on packaging sector as on 28.02.2011

Source: table 1.15

In packaging sector two companies are listed

Both the companies shows negative return
midfield industries ltd shows -63.33% and emmbi polyarns limited shows -70.33%

4.16 PHARMACEUTICALS & DRUGS

Table: 1.16 Return on pharmaceuticals and drugs sector as on 28.02.2011

Company Return
claris lifesciences limited (cll) -16.01%

parabolic drugs limited -46.67%

syncom healthcare limited -59.00%

Source: http://www.chittorgarh.com

Chart : 1.16 Return on pharmaceuticals and drugs sector as on 28.02.2011

RLIMS Page 41
Source: table 1.16

In pharmaceuticals & drugs sector there are three companies are listed
All the three companies shows negative return
claris lifesciences limited (cll)shows -16%,parabolic drugs limited shows -46.67% and
syncom healthcare limited shows -59%

4.17 TV BROADCASTING & SOFTWARE PRODUCTION

Table: 1.17 Return on TV broadcasting sector as on 28.02.2011

Company Return
sea tv network ltd -73.20%
eros international media limited -21.46%

Source: http://www.chittorgarh.com

Chart : 1.17 Return on TV broadcasting sector as on 28.02.2011

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Source: table 1.17

Tv broadcasting sector there are two companies are listed

Both the company shows negative return
Sea tv network ltd shows -73.20%and eros international media ltd shows -21.46%

4.18 TRANSMISSION TOWERS / EQUIPMENTS

Table: 1.18 Return on transmission towers sector as on 28.02.2011

Company Return
a2z maintenance & engineering services ltd -37.74%

Source: http://www.chittorgarh.com

Chart : 1.18 Return on transmission towers sector as on 28.02.2011

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Source: table 1.18

In transmission sector only one company is listed .

a2z maintenance & engineering services ltd shows negative return of 37.74%

4.19 TEXTILE
Table: 1.19 Return on textile sector as on 28.02.2011

Company Return
mandhana industries limited 91.58%

pradip overseas limited -36.50%

cantabil retail india limited -69.85%

Source: http://www.chittorgarh.com

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Chart : 1.19 Return on textile sector as on 28.02.2011

Source: table 1.19

In textile sector mandhana industries ltd shows 91.58% return

And other company shows negative return
In that cantabile retail india limited shows more negative return of 69.85% followed by
pradip overseas ltd

4.20 TELECOMMUNICATION EQUIPMENT, SERVICE PROVIDER

Table: 1.20 Return on telecommunication sector as on 28.02.2011

Company Return
bs transcomm ltd -63.67%
hathway cable & datacom ltd -49.44%

Source: http://www.chittorgarh.com

Chart : 1.20 Return on telecommunication sector as on 28.02.2011

RLIMS Page 45
Source: table 1.20

Telecommunication sector shows negative return

Bs transcomm ltd shows -63.67% return and followed by hatchway cable & datacom ltd
shows 49.44%

4.21 STEEL, IRON PRODUCTS

Table: 1.21 Return on steel, iron products sector as on 28.02.2011

Company Return
gallantt ispat ltd 39.00%
gyscoal alloys ltd -76.34%
bedmutha industries ltd -1.67%
prakash steelage ltd 13.55%
electrosteel integrated limited -22.27%

Source: http://www.chittorgarh.com

Chart : 1.21 Return on steel, iron products sector as on 28.02.2011

RLIMS Page 46
Source: table 1.21

In steel sector gallant ispat shows 39% return and followed by prakash steel ltd.
And other companies negative return.
In that gyscol alloy ltd shows more negative return.

4.22 SHIPPING
Table: 1.22 Return on shipping sector as on 28.02.2011

Company Return
shipping corporation of india ltd -28.75% Source:

http://www.chittorgarh.com

Chart : 1.22 Return on shipping sector as on 28.02.2011

RLIMS Page 47
Source: table 1.22

Shipping corporation of india shows a -28.75% return.

Its one of leading government company. Also it has strong orders books while comparing
with the peers.

4.23 PRINTING & STATIONERY, PUBLISHING

Table: 1.23Return on printing and stationary sector as on 28.02.2011

Company Return
d b corp limited 12.50%
hindustan media ventures ltd -0.27%
Source: http://www.chittorgarh.com

Chart : 1.23Return on printing and stationary sector as on 28.02.2011

RLIMS Page 48
Source: table 1.23

Printing and stationary, publishing related companies shows positive return.

Db corp shows better return.
Hindustan media shows -0.27% return.

4.24 POWER GENERATION/DISTRIBUTION

Table: 1.24 Return on power generation sector as on 28.02.2011

Company Return
orient green power company ltd -49.36%

satluj jal vidyut nigam ltd (sjvnl) -22.12%

jsw energy limited -21.68%

power grid corporation of india ltd 10.22%

ntpc limited -15.20%

Source: http://www.chittorgarh.com

RLIMS Page 49
Chart : 1.24Return on power generation sector as on 28.02.2011

Source: table 1.24

In power sector, power grid corporation only shows positive return.

Orient green power company shows -49% return and followed by sjvnl, jsw, ntpc.

4.25 PORT

Table: 1.25 Return on port sector as on 28.02.2011

Company Return
gujarat pipavav port ltd (gppl) 27.07%

Source: http://www.chittorgarh.com

Chart : 1.25 Return on port sector as on 28.02.2011

RLIMS Page 50
Source: table 1.25

Port sector shows a positive return.

It shows a 25% return.
Port sector is comparatively better than other sectors.

4.26 PLASTIC PRODUCTS

Table: 1.26Return on plastic products sector as on 28.02.2011

Company Return
texmo pipes & products ltd -64.11%

Source: http://www.chittorgarh.com

Chart : 1.26Return on plastic products sector as on 28.02.2011

RLIMS Page 51
Source: table 1.26

Plastic products and related companies shows negative return.

It shows 64.11%negative return.

4.27 MISCELLANEOUS
Table: 1.27 Return on miscellaneous sector as on 28.02.2011

Company Return
talwalkars better value fitness ltd 50.35%

Source: http://www.chittorgarh.com

Chart : 1.27 Return on miscellaneous sector as on 28.02.2011

RLIMS Page 52
Source: table 1.27

In others one company is listed

talwalkars better value fitness ltd shows positive return 50.33%

5. OVER ALL SECTOR WISE RETURN:

chart: 2 overall all sector return as on 28.02.2011

RLIMS Page 53
 While comparing with other sectors consumer food sector shows better return among
others.
And followed by mineral and metal sector.
Banks shows positive return.
Diamond and jewelry sector shows positive return but comparatively lower than bank and
other sectors.
Logistics sector shows most negative return among others, and followed by auto
ancillary, chemicals, electronics.

RLIMS Page 54
Source:www.indiaipo.com

Printing and stationary sector most negative return among others sectors.
And followed by telecommunication, plastic products,pharma and others.
Port sectors and related companies shows positive return. And other are in adverse
direction.

RLIMS Page 55
 6. PERFORMANCE ON LISTING DAY:

Chart :3 FIRST DAY RETURN:

Source:www.bseindia.com

In the above chart:

In the 74 companies 25 companies shows negative return.
Totally 10 companies shows more than 50% return.
And 31 more companies shows below 25% return.
Through this most of the companies shows positive return in the first day.
In the 74 companies totally shows 974% return in the year of 2010 listings.
Table :3 Return on listing day

Company Name Return Rank

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Career Point Infosystems Ltd 103.9839 1
Prakash Steelage Ltd 99.95455 2
Bedmutha Industries Ltd 77.2549 3
Aster Silicates Ltd 68.64407 4
Gravita India Limited 68.32 5
ARSS Infrastructure Projects Limited 63.62222 6
Gallantt Ispat Ltd 63.2 7
Jubilant Foodworks Ltd 57.93103 8
BS Transcomm Ltd 52.62097 9
Texmo Pipes & Products Ltd 52.5 10
Coal India Limited 39.73469 11
Man Infraconstruction Ltd 38.19444 12
DQ Entertainment (International) Ltd 35.6875 13
Persistent Systems Limited 31.6129 14
VA Tech Wabag Limited 30.45802 15
Talwalkars Better value Fitness Ltd 27.03125 16
D B Corp Limited 25.42453 17
Ravikumar Distilleries Ltd 25.07813 18
MOIL Limited 24.4 19
Technofab Engineering Ltd 23.125 20
Midfield Industries Ltd 22.55639 21
Gujarat Pipavav Port Ltd (GPPL) 17.3913 22
Syncom Healthcare Limited 17.13333 23
Rural Electrification Corporation Ltd 16.55172 24
Infinite Computer Solutions India Ltd 16.12121 25
Tecpro Systems Ltd 14.88732 26
Bajaj Corp Limited 14.88636 27
Gyscoal Alloys Ltd 14.85915 28
MBL Infrastructures Ltd 14.30556 29
Hindustan Media Ventures Ltd 13.9759 30
Engineers India Ltd 10.74138 31
SKS Microfinance Ltd 10.51574 32
Intrasoft Technologies Limited 9.896552 33
Godrej Properties Limited 9.091837 34
Eros International Media Limited 8.857143 35
Oberoi Realty Limited 8.807692 36
Aqua Logistics Ltd 7.953488 37
Power Grid Corporation of India Ltd 7.333333 38
IL&FS Transportation Networks Ltd 6.104651 39
JSW Energy Limited 6.052632 40
Sea TV Network Ltd 6 41
Punjab & Sind Bank 5.875 42
Prestige Estates Projects Ltd 5.218579 43

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United Bank of India 4.242424 44
Ashoka Buildcon Limited 2.885802 45
Mandhana Industries Limited 2.807692 46
Electrosteel Integrated Limited 2.272727 47
NTPC Limited 0.248756 48
Birla Shloka Edutech Limited 0 49
Standard Chartered PLC -0.96154 50
Satluj Jal Vidyut Nigam Ltd (SJVNL) -1.92308 51
Pradip Overseas Limited -2.59091 52
Orient Green Power Company Ltd -4.46809 53
Thangamayil Jewellery Limited -5.2 54
Goenka Diamond & Jewels Ltd -5.2963 55
Shipping Corporation of India Ltd -5.39286 56
Nitesh Estates Limited -5.64815 57
Microsec Financial Services Ltd -6.01695 58
DB Realty Limited -6.6453 59
RPP Infra Projects Ltd -8.06667 60
Claris Lifesciences Limited (CLL) -9.71491 61
Jaypee Infratech Limited (JIL) -10.4902 62
Vascon Engineers Limited -10.7879 63
Commercial Engineers & Body Builders Co Ltd -11.6535 64
Parabolic Drugs Limited -13.6 65
Ramky Infrastructure Limited -13.9222 66
Tirupati Inks Limited -14.7674 67
Hathway Cable & Datacom Ltd -16.25 68
A2Z Maintenance & Engineering Services Ltd -17.775 69
Indosolar Limited -18.2759 70
Cantabil Retail India Limited -22.4444 71
Tarapur Transformers Limited -24.1333 72
Shree Ganesh Jewellery House Ltd -37.2115 73
Emmbi Polyarns Limited -38.4444 74
Source: http://www.chittorgarh.com

Career Point Infosystems Ltd give 103% return on first day followed
by Prakash Steelage Ltd 99%, Bedmutha Industries Ltd 77 %
Due to underpricing in fresh issue most of the companies give more
return on listing day itself
Chart: 3.1

6.1 ONE WEEK RETURN

RLIMS Page 58
Source www.bseindia.com

In the first week most of the companies shows positive return.

In the 74 companies only two companies gave more than 100 % return.
And 6 companies shows more than 50% return.
29 companies shows negative return.

Chart:3.2

6.2 ONE MONTH RETURN

RLIMS Page 59
Source www.bseindia.com

In the above chart:

In the 74 companies 33 companies shows negative return.
Totally 7 companies shows more than 50% return.
And 24 more companies shows below 25% return.
Through this most of the companies shows positive return in the first month.
In the 74 companies totally shows 337% return in the year of 2010 listings.

Chart 3.3

6.3 THREE MONTH RETURN

RLIMS Page 60
Source www.bseindia.com

In the above chart:

In the 61 companies 34 companies shows negative return.
Totally 6 companies shows more than 50% return.
And 13 more companies shows below 25% return.
Through this most of the companies shows negative return in the third month.
In the 74 companies totally shows 137% return in the year of 2010 listings.

Chart 3.4

6.4 SIX MONTH RETURN:

RLIMS Page 61
Source www.bseindia.com

The charts explains the six month returns:

Here six companies give more than 100% return.

Two companies shows more than 50% return.
23 companies shows negative return
Totally 42 companies shows positive return of 469.11%

Chart 3.5

6.5 ONE YEAR RETURN:

RLIMS Page 62
Source www.bseindia.com

The charts explains the one year returns:

Here two companies give more than 100% return.

Two companies shows more than 25% return.
9 companies shows negative return
Totally 15 companies shows negative return of -74.92%

7. FUNDAMENTAL ANALYSIS

7.1 DIVIDEND

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 Percentage of 0% 0%-2% 2%-5% 5%-10% 10% above
dividend
No of companies 40 23 8 3 0

Table: 4. dividend payment as on 28.02.2011

Chart : 4.1 dividend payment up to 28.02.2011

Source: table 4

In the 2010 listed companies, 40 companies didnt announced any dividend.

23 companies declared below 2% of dividend.
And only 3 companies announced more than 5% dividend
8 companies announced below 5% dividend.
Average dividend of the company: 0.88

7.2 EARNINGS PER SHARE

Table: 4.1 eps of the company as on 28.02.2011

Percentage of Below 0% 0% 0-10% 10-25% 25-50% 50-75% 75%-100% Above

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eps 100%

No of 7 1 33 24 7 1 1 0
companies
Chart 4.2 eps of the company as on 28.02.2011

Source: table 4.1

Among the 74 companies only 2 company have more than 50% eps.
33 companies have below 10% eps.
In that 7 companies have negative eps.

7.3 BOOK VALUE AND ISSUE PRICE

Table: 4.2 difference in book value and issue price as on 28.02.2011

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 Above 0- 0% 0-50% 51- 101- 251- 501- Above1001%
-50% -50% 100% 250% 500% 1000%
No of 0 5 0 17 19 27 9 1 0
company

During public issue all the company fix price above the book value

10 companies fix issue price more than 250 percentage higher

7.4 BOOK VALUE AND CURRENT PRICE AS ON 28.02.2011

Table: 4.3 difference in book value and current price as on 28.02.2011

Above 0- 0- 51- 101- 251- 501-

Particular -50% -50% 0% 50% 100% 250% 500% 1000% Above1001%
No of
company 6 21 10 21 15 6 3 2

In the 74 companies, 27 companies share price is lower than book value

During issue all the company price is with in the range of 0-500% but now it deviated
from negative to above 1000%

8. OVERALL SUBSCRIPTION:

Chart:5

RLIMS Page 66
 Source: http://www.chittorgarh.com

In over all subscription there is much increase in demand for the share due to over
subscription with high of 93.6 time of persistent systems and with low of jsw energy of
0.4 time
Average over subscription in the public issue: 14.79 times
In 2010 all the public issue are over subscripted

Chart:5.1

8.ARETAIL INVESTOR:

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 Source: http://www.chittorgarh.com

In retail subscription there is much increase in demand for the share due to over
subscription with high of 44.45 time of punjab& sind bank and with low of prestige
estates projects ltd of 0.08 time
Average over subscription in the public issue: 7.03 times
In 2010 all the public issue are over subscripted

8.1 VOLUME TRADED:

Chart: 5.2

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Source: http://www.chittorgarh.com

In the year 2010 45% of companies traded below 1 time.

18% companies traded 1 to 2 times.
Following this 8% of companies traded 2-3 times, 4% companies traded 4-5 times.
But certain companies ie 17% traded 5 times.

9.CONCLUSIONS :

From the foregoing analysis, it can be concluded that under pricing is present in public issue.
It an also be concluded that under pricing is more severe in the short run periods, i.e., from the
listing day to the three months after the listing. However the long run IPOs tends to move to their

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intrinsic value or true value wiping out much of the under pricing. The difference between the
extents of under pricing in the two time intervals is very much. For long time interval is taken
6month and1 years from the day of the listing of the company. It shows that if an investor buys
and holds the equities, how much he is going to earn over the considered time period. In addition
to that dividend ,earning per share volume traded and subscription level has been done.
Listed public issue in India on an average offered positive return to investors in short run period
closing prices on the listing day were accounted . In the long run offered negative returns

10. FINDINGS

India saw a dramatic recovery in its IPO markets in 2010

2010 saw a string of IPOs and follow-on offerings from many previously state-owned
enterprises in the materials sector such as steel, oil and gas all of which helped the
Indian Government raise funds to build roads, ports and power plants.

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 Indias US$10 billion divestment program that spawned the largest IPO in India ever, the
listing of the worlds largest coal producer, US$3.4 billion Coal India, a former state-
owned enterprise.
In 2010 all the public issues is over subscripted by retail investor.
Investment awareness are increased among retail investor in India.
Public issue shares are under priced while issue and it give more return to investor in
listing day itself.
The total funds raised by the private sector through the 59 issues were worth Rs. 21,100
crore. The current mark-to-market value of these issues is now Rs. 17,600 crore. So, the
mark-to-market loss on these issues was about Rs. 3,500 crore, indicating a 16.82 per
cent loss
In the PSU segment, six firms , are trading above their issue prices while the rest are
trading below their issue prices And, the current mark-to-market value of these issues is
about Rs.54,000 crore and the mark-to-market profit on these issues was Rs.4,500 crore,
translating into a profit of 9.19 per cent.
The prominent private sector issues that are trading above their issue prices include
Jubilant Foodworks , Thangamayil Jewellery , Mandhana Industries , Talwalkars Better
Value Fitness . So, it is the new-age lifestyle products such as pizza corners, jewellery
and gyms that are delivering better returns.

Major PSU issues trading above their issue prices are United Bank of India , REC , Coal
India and MOIL .

10.1 SUGGESTIONS:

Government, stock exchanges, brokers and the corporate all together should create
awareness about ipo among the retail investors for better capitalization mobilization.

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 And the investors have to analyze about the stocks and factors influencing the particular
stocks before investment.

Investor should read the prospectus of the particular company carefully while doing
investment in IPOs

The investors who are speculative in nature could concentrate more on IPOs because out
of 74 companies, more than 50 companies gave average return of more than 15% on the
listed day itself.

11.BIBLIOGRAPHY

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 o www.nseindia.com
o www.bseindia.com
o www.moneycontrol.com
o www.chittorgarh.com
o investor.sebi.gov.in
o www.sebi.gov.in

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