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    SEBI Guidelines For IPO

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    Abhishek Khemka
    SEBI guidelines outline three entry norms ("routes") for IPOs: the profitability route requires certain financial metrics over three years; the QIB route requires 50% allocation to qualified institutional buyers and a minimum post-issue capital of Rs. 10 crores; the appraisal route requires 15% participation from financial institutions with 10% from the appraiser. The guidelines also specify requirements for issue size, promoter contribution, collection centers, allotment, timeframes, and investor categories.

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    SEBI Guidelines For IPO

    Uploaded by

    Abhishek Khemka
    405 views12 pages
    SEBI guidelines outline three entry norms ("routes") for IPOs: the profitability route requires certain financial metrics over three years; the QIB route requires 50% allocation to qualified institutional buyers and a minimum post-issue capital of Rs. 10 crores; the appraisal route requires 15% participation from financial institutions with 10% from the appraiser. The guidelines also specify requirements for issue size, promoter contribution, collection centers, allotment, timeframes, and investor categories.

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    SEBI Guidelines for IPO

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    SEBI guidelines outline three entry norms ("routes") for IPOs: the profitability route requires certain financial metrics over three years; the QIB route requires 50% allocation to qualified institutional buyers and a minimum post-issue capital of Rs. 10 crores; the appraisal route requires 15% participation from financial institutions with 10% from the appraiser. The guidelines also specify requirements for issue size, promoter contribution, collection centers, allotment, timeframes, and investor categories.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    405 views12 pages

    SEBI Guidelines For IPO

    Uploaded by

    Abhishek Khemka
    SEBI guidelines outline three entry norms ("routes") for IPOs: the profitability route requires certain financial metrics over three years; the QIB route requires 50% allocation to qualified institutional buyers and a minimum post-issue capital of Rs. 10 crores; the appraisal route requires 15% participation from financial institutions with 10% from the appraiser. The guidelines also specify requirements for issue size, promoter contribution, collection centers, allotment, timeframes, and investor categories.

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    SEBI Guidelines for IPO

    Entry norms
    • Entry Norm I (commonly known as
    “Profitability Route”)
    • Entry Norm II (Commonly known as
    “QIB Route”)
    • Entry Norm III (commonly known as
    “Appraisal Route”)
    Entry Norm I (commonly known
    as “Profitability Route”)
    • Net Tangible assets of at least Rs. 3 crores in each of the
    preceding three full years.
    • Distributable profits in at least three of the immediately
    preceding five years
    • Net worth of at least Rs. 1 crore in each of the preceding
    three full years.
    • If the company has changed its name within the lastone
    year, at least 50% revenue for the preceding 1 year should
    be from the activity suggested by the new name.
    • The issue size does not exceed 5 times the pre issue net
    worth as per the audited balance sheet of the last financial
    year
    Entry Norm II (Commonly known
    as “QIB Route”)
    • Issue shall be through book building
    route, with at least 50% to be mandatory
    allotted to the Qualified Institutional
    Buyers (QIBs).
    • The minimum post issue face value capital
    shall be Rs. 10 crores or there shall be a
    compulsory market making for at least 2
    years
    Entry Norm III (commonly known
    as “Appraisal Route”)
    • The “project” is appraised and participated to
    the extent of 15%by Financial Institutions/
    Scheduled CommercialBanks of which at
    least 10% comes from the appraiser's).
    • The minimum post issue face value capital
    shall be Rs. 10 crores or there shall be a
    compulsory market making for at least 2
    years.
    Size of the Public Issue
    • Issue of shares to general public cannot be less than
    25% of the total issue, incase of information technology,
    media and telecommunication sectors this stipulation is
    reduced subject to the conditions that:

    • Offer to the public is not less than 10% of the securities


    issued.
    • A minimum number of 20 lakh securities is offered to the
    public and
    • Size of the net offer to the public is not less than Rs. 30
    crores.
    Promoter Contribution
    • Promoters should bring in their
    contribution including premium fully before
    the issue
    • Minimum Promoters contribution is 20-
    25% of the public issue.
    • Lock in period for promoters contribution
    is three years
    Collection centers for receiving
    applications
    • There should be at least 30 mandatory collection
    centers, which should include invariably the
    places where stock exchanges have been
    established.
    • For issues not exceeding Rs.10 crores (including
    premium, if any), the collection centres shall be
    situated at:-
    the four metropolitan centres viz. Bombay, Delhi,
    Calcutta, Madras; and at all such centres where
    stock exchanges are located in the region in
    which the registered office of the company is
    situated.
    Regarding allotment of shares
    • Net Offer to the General Public has to be at least 25% of
    the Total Issue Size for listing on a Stock exchange.
    • It is mandatory for a company to get its shares listed at
    the regional stock exchange where the registered office
    of the issuer is located.
    • Minimum of 50% of the Net offer to the Public has to be
    reserved for Investors applying for less than 1000
    shares.
    • There should be atleast 5 investors for every 1 lakh of
    equity offered (not applicable to infrastructure
    companies).
    Timeframes for the Issue and
    Post- Issue formalities
    • The minimum period for which a public issue has
    to be kept open is 3 working days and the
    maximum for which it can be kept open is 10
    working days.

    • Allotment has to be made within 30 days of the


    closure of the Public Issue and 42 days in case of
    a Rights issue.
    • All the listing formalities for a public Issue has to
    be completed within 70 days from the date of
    closure of the subscription list.
    Category of Investors
    • Retail individual Investor (RIIs)
    • Non Institutional Investors (NIIs)
    • Qualified Institutional Buyers (QIBs)
    Despatch of Refund Orders
    • Refund orders have to be dispatched
    within 30 days of the closure of the Public
    Issue.
    • Refunds of excess application money i.e.
    for un-allotted shares have to be made
    within 30 days of the closure of the Public
    Issue.
    • Green shoe option (Special provision)

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