Initial Public Offering (IPO) is the first step by the company to go public for
raising funds. Company raise money for various corporate purposes such as expansion
of capacities, repayment of existing loans, setting up new projects, divesting promoter
holding, exit to shareholders, listing etc.,
- We have clients who are Retail, HNI & Corporate's
- Excellent strength in HNI & Corporate
- Good rapport with Investment Bankers
- Leading distributor in league team
- Vast clientele, large no of sub broker base on pan India / across
the country, and franchisee
If the company has never issued equity to the public, it's known as an IPO. Going
public helps raises cash, and usually a lot of it. Being publicly traded also opens
many financial doors.
- Due to 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
IPO is just selling stock. It's all about the sales job. If you can convince people
to buy stock in your company, you can raise a lot of money.
- When a company wants to go public, the first thing it does is hire
an investment bank.
- The company and the investment bank will first meet to negotiate
the deal. Items usually discussed include the amount of money a company will raise,
the type of securities to be issued and all the details in the underwriting agreement
- In a best efforts agreement, however, the underwriter sells securities
for the company but doesn't guarantee the amount raised. Also, investment banks
are hesitant to shoulder all the risk of an offering. Instead, they form a syndicate
of underwriters. One underwriter leads the syndicate and the others sell a part
of the issue.
- Once all sides agree to a deal, the investment bank puts together
a registration statement to be filed with the SEC
- The SEC then requires a cooling off period, in which they investigate
and make sure all material information has been disclosed. Once the SEC approves
the offering, a date (the effective date) is set when the stock will be offered
to the public.
- As the effective date approaches, the underwriter and company sit
down and decide on the price. This isn't an easy decision: it depends on the company,
the success of the road show and, most importantly, current market conditions. Of
course, it's in both parties' interest to get as much as possible.
- Finally, the securities are sold on the stock market and the money
is collected from investors.
Short brief on IPOs
- An initial public offering (IPO) is the first sale of stock by a
company to the public.
- Broadly speaking, companies are either private or public. Going
public means a company is switching from private ownership to public ownership.
- Going public raises cash and provides many benefits for a company.
- Getting in on a hot IPO is very difficult, if not impossible.
- The process of underwriting involves raising money from investors
by issuing new securities.
- Companies hire investment banks to underwrite an IPO.
- The road to an IPO consists mainly of putting together the formal
documents for the Securities and Exchange Commission (SEC) and selling the issue
to institutional clients.
- The only way for you to get shares in an IPO is to have a frequently
traded account with one of the investment banks in the underwriting syndicate.
- An IPO company is difficult to analyze because there isn't a lot
of historical info.
- Lock-up periods prevent insiders from selling their shares for a
certain period of time. The end of the lockup period can put strong downward pressure
on a stock.
- Road shows and red herrings are marketing events meant to get as
much attention as possible. Don't get sucked in by the hype.
- A tracking stock is created when a company spins off one of its
divisions into a separate entity through an IPO.
- Don't consider tracking stocks to be the same as a normal IPO, as
you are essentially a second-class shareholder.
Product Offerings in IPOs
IPOs: An initial public offering, or IPO, is the first sale of stock by a
company to the public. A company can raise money by issuing either debt or equity.
If the company has never issued equity to the public, it's known as an IPO
Corporate Fixed Deposits: Corporate fixed deposits are fixed deposits offered
by corporate companies. The corporate fixed deposits work like the regular bank
fixed deposits albeit a few changes. Corporate fixed deposits offer a higher rate
of interest when compared to bank fixed deposits as the risk involved is higher
when it comes to corporate fixed deposits. The tenure period of a corporate fixed
deposit usually ranges between 1-3 years.
NCDs: Non-convertible debentures (NCDs) are debt instruments with a fixed
tenure issued by companies to raise money for business purposes. Unlike convertible
debentures, NCDs can't be converted into equity shares of the issuing company at
a future date.
Tax Free Bonds: A bond is a fixed income instrument carrying a coupon rate
of interest and is issued for a fixed tenure. As the name suggests, interest earned
from tax-free bonds is exempt from tax. The interest income earned is exempt fromtax
under Section 10 (15) (iv) (h) of the Income TaxAct, 1961
Capital Gain Bonds (U/s 54EC): There are instruments like capital gain bonds,
in which the profit arising from the sale of a property can be invested. These have
a lock-in period of three years and the maximum limit for investing in such instruments
is Rs. 50 lakhs". These bonds are currently being issued by NHAI and REC
SME Issues: Listing is an initiative to prepare SME s forIPO and Listing,
reduce listing costs to the lowest possible, and with the help of our expert professionals,
provide assistance in every possible way in listing of SME s on both BSE and NSE
GOI 8% Savings Taxable Bonds (2003): The 8% Government of India Savings (taxable)
bonds, 2003 is a bond issued by the Reserve Bank of India (RBI) commencing April
21, 2003. The bonds are available for purchase by individuals on tap i.e. you can
buy them as and when required. As the name indicates, the rate of interest offered
on the bond is 8% per annum.
- Timely supply of forms with marketing materials like paper posters
- Providing IPO note on public issues, product note on NCD issues,
Tax Free Bonds, etc.
- Hassel free IPO, supply of pre-printed forms
- Arranging IPO finance to HNI & Corporate thru NBFCs
- SMS & WhatsApp service on Issues like Opening , Closing Date, Price
Band, Bid Lot, Listing etc.,
- SMS & WhatsApp on Subscription level on day to day basis, Date of
- Update on Post Issue time line such as finalization of allotment,
blocking & unblocking of funds, credit of shares & listing date via email, SMS &
- Resolution of query within 48 hours regards to allotment of shares
in Demat account, blocking / unblocking of funds.
- Bidding facilities at partner’s place/office
- In terms of total no of applications procured we stood No. 15 in
Equity (1/4/14 to 31/3/2015) source: Prime database
- In terms of amount procured we stood No.11 in Equity (Retail& Non-Institutional
Investors) (1/4/2014 TO 31/12/2014. Source: Prime database
- Company Fixed Deposits
- Capital Gain Bonds (U/s 54EC)
- 8.00% Saving (Taxable) Bonds floated by GoI
- Bonds floated by Central & State Governments.
Our services include
- IPO Note
- Pre-printed Public Issue forms
- IPO Financing from other NBFC(High Net Worth Segment)
- Subscription Figures on a daily basis
- Basis of Allotment
- Listing Dates via SMS & E-mail
Our success in IPOs has been a result of our vast experience in the Primary Market,
a wide network of over 8000 Sub-brokers across India, strong distribution capabilities
and a dedicated research team that provides clients with in-depth overviews of forthcoming
IPOs as well as tailor-made investment recommendations.
On the other hand LKP's retail & non- institutional procurement strength and
strong rapport with all prominent merchant bankers, enables us to play a leading
role in the issues handled by them.