C C V I N D I A
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Initial Public Offers - IPO Consultants

Public Issue in relation to the Stock Market means invitation by a company to the public for subscribing the securities of the Company.

The public issue may be Initial Public Offering (IPOs) or Follow on public Offer (FPOs).

Initial Public Offering (IPO) In initial public offering (IPO), the unlisted Company makes either fresh issue of shares or offer for sale of the exiting shares. It is the first sale of shares and debentures by a company to the public and a closely held Company being transformed into a widely held Company

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IPOs on Main Board and SME Board and Funds raised

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The Regulatory Framework for IPOs is broadly contained in the following Acts, Rules and regulations:

  • The Companies Act 2013
  • The Companies (Prospectus and allotment of Securities) Rules 2014
  • The Companies (Shares Capital and Debentures) Rules 2014
  • The Securities Contracts (Regulations) Act 1956
  • The Securities Contracts (regulation) Rules 1957
  • The Securities and Exchange Board of India (Issue of capital and Disclosure Requirements) Regulations 2018
  • The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015
  • The Depositories Act 1996
  • The Securities and Exchange Board of India (Depositories and Participants) Regulations 1996
  • The Foreign Exchange Management Act 1999
  • Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000
  • FDI policy

The above list is not exhaustive and there are some other regulations which are required to be complied with while coming out with an IPO.

  • Issuer has net tangible assets of a minimum Rs. 3 crore in each of the preceding 3 full years (of twelve months each), and not more than 50% of these tangible assets are held in monetary assets. In case more than 50 % are held in monetary assets, the issuer has made firm commitment to utilize such excess assets in its business or project. However such limit of 50% shall not apply in case offer for sale.
  • Issuer has a minimum average pre-tax operating profit of Rs. 15 Crore, ascertained on a restated and consolidated proposal, during three out of the preceding 5 years.
  • If issuer has changed its name within the last 1 year, at least 50% of the revenue has been earned from the activity indicated by the new name in the preceding 1 year.
  • The gross value of the proposed issue and all previous issues made during the financial year does not exceed five times the pre issue net worth stated in the audited balance sheet of the previous financial year.

OR

In case the issue is made through book-building, the issuer undertakes to allot at least 75 % of the net offer to qualified institutional buyers and to return the full subscription money if it fails to make this allotment.

Following guidelines are provided under Chapter IX of SEBI (ICDR) Regulations 2018

Particulars

  • Post issue paid up capital
  • Filling of draft offer documents to SEBI
  • Observation of SEBI on Offer Documents
  • Final Offer Documents filled to SEBI
  • Underwriting of Issue
  • Merchant Banker obligation for underwriting
  • Minimum number of allottees
  • Minimum application value
  • Market Making
  • Migration to SME platform
  • Migration to main board (Optional)
  • Migration to main board (Compulsory)

Requirements

  • Not more than Rs. 25 crore
  • Not required
  • Not required
  • Yes
  • 100% Underwritten
  • At least 15%
  • At least 50
  • At least of Rs. 1,00,000
  • Compulsory for 3 years
  • Special Resolution by postal ballot
  • If Rs. 25 Crore>Capital > Rs. 10 Crore & SR of shareholders
  • Capital is more than Rs. 25 Crore

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  • Post issue paid up capital is less than Rs. 25 Crore
  • Positive Cash accruals or PBDT for 2 out of 3 preceding years
  • Track record of at least 3 Years.
  • Net worth should be positive
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  • Net Tangible assets of at least 3 Crore
  • Positive Net-worth
  • Track record of 3 Years or should have been funded by Loan/Equity by Banks/ Financial Institution or Central/State Government
  • The post-issue paid up capital of the company (face value) shall not be more than Rs. 25 crores.
  • Group Company has been listed for 2 years on Main Board or SME Board

  • Promoters, promoter group or persons in control of the issuer or directors are not debarred from accessing the capital market by the SEBI or related to any other company restricted under the directions of SEBI from accessing the capital market.
  • Issuer has entered into an agreement with a depository for dematerialisation of securities proposed to be issued or already issued.
  • Firm arrangements have been made through verifiable means for 75% of the stated means of finance, except the existing internal accruals or proposed to be raised through public issue.

  • Minimum post issue capital should be more than Rs. 10 Crore. In addition, the SME IPO norms are also applicable.

S.No Main Board IPO SME IPO
1 Post Issue Capital more than 10 Crore Post Issue capital should not exceed Rs. 25 Crore.
2 IPO Grading is mandatory NA
3 Minimum no. of allottees 50 Minimum no. of allottees 50
4 Minimum Application Value is Rs. 10000-15000 Minimum Application Value is Rs. 100000/-
5 Underwriting of issue is optional. 100% underwritten issue.
6 Offer document is filed to SEBI for Vetting. Offer document is filed to Stock Exchange for Vetting.
7 No requirement of market making. Market making is compulsory.

CCV provides full-fledged services for businesses seeking to list on stock exchange under Main Board & SME IPO. Our professional team prepares all the documents including the prospectus, files the applications, helps in acquiring investors to raise capital, and all related activities for submission of your company to the stock exchange in the shortest time. We follow a proven approach to cope with the market challenges and help companies adjust to the public infrastructure.

Under this phase, we shall assist you in preparation of IPO and listing. Our scope of services under this phase shall mainly include Advisory in the following:

  • Devising appropriate capital restructuring plan
  • Setting up minimum corporate governance practices expected by a listed company from the perspective of Companies Act, LODR, listing norms, SEBI ICDR Regulations etc.
  • Appointment and coordination of market intermediaries and other parties including the Underwriters, Market Makers, Registrars to Issue, Legal Advisor to the Issue, Bankers to Issue, PR Agency, Printer etc.
  • Devising a complete IPO plan and strategy including the likely post-issue shareholding distribution pattern.
  • Coordinating with Peer-Review Auditors for restatement of financials of the Company as required under SEBI (ICDR) Regulations.
  • Obtaining ISIN from the Depository(ies) and dematerializing pre-IPO shares of the Company.

Under this phase, we shall carry out a due diligence and our scope of services shall mainly include the following:

  • Carry out a preliminary background check
  • First-level due diligence based on the preliminary information / documents to be provided by the Company and publicly available information.
  • Visit the Company office(s) and factory.
  • Hold discussions with the management, auditors and legal advisors to the Issue.
  • Finalize the due diligence report in consultation with Legal Advisor.

Under this phase, we shall carry out valuation exercise and our scope of services shall mainly include the following:

  • Ratio analysis such as EPS, BVPS, RONW etc., as may be required under SEBI ICDR Regulations.
  • Industry analysis from valuation perspective.
  • Identification of peer comparable.
  • Peer analysis and pricing of peers listed on stock exchange.
  • Determining issue pricing and size for discussion with the management.

Under this phase, we shall give observations on IPO Offer Document and other important agreements, documents and resolutions necessary for an IPO process. An indicative list of important documents is as under for easy understanding:

  • IPO Offer Document
  • Tripartite Agreement with NSDL, CDSL and Registrar to Issue.
  • Underwriting Agreement.
  • Market Making Agreement.
  • Agreement with Bankers to Issue.
  • Agreement with Registrar to Issue.
  • Board / Shareholders’ Resolutions.
  • Certificates, Letters of Representations etc.
  • Draft of public advertisements, notices etc.
  • Forms / Applications to be filed with Stock Exchange, RoC and other regulatory office(s).

We shall assist in complete end-to-end IPO process including the following activities:

  • Filing of IPO Offer Document with Exchange(s) and other regulatory offices like SEBI and RoC.
  • Coordinating and assistance in interview with Exchange Listing Advisory Committee.
  • Follow-up with Exchange(s) and RoC for their approvals.
  • Execution of agreements with other market intermediaries.
  • Assistance in launch of IPO and coordinate with other parties including PR Agency, Printers for adequate public advertisement, distribution of application forms as required statutorily.
  • Monitoring the flow of applications and timely updation with the management of the Company.
  • Coordinating with bankers and registrars for deposit of application moneys and finalization of allotment list in consultation with the stock exchange.

Finally, post IPO closure and finalization of allotment; we shall initiate the activities for listing of equity shares of the Company on SME Exchange. We shall advise in the following activities under this phase:

  • Completing allotment of shares to the successful allottees.
  • Preparing & submission of listing application with SME Exchange.
  • Follow-up with SME Exchange and obtain listing approval.
  • Trading formalities and obtain Exchange trading approval.
  • Making required statutory public disclosures.

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What We Do

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Public Issues

We handhold the Company and Management throughout the Process of getting their Company Listed on Stock Exchanges and raise funds through IPO.

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Buyback of Securities

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Takeover & Open Offer

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