envestindia.com





Nasdaq hopes to attract more domestic firms
10th December 2004: Nasdaq hopes to attract listings from 5-10 Indian companies in the next 12-18 months. India has 100-odd companies that are US-GAAP compliant, a key requisite to list on an American bourse. Nasdaq expects at least one Indian company to seek a listing by the first quarter of 2005. “We see heightened interest from Indian companies which desire global visibility,” said Nasdaq’s MD, Stuart Patterson. “And the US market has a great appetite for quality companies. Indian companies will benefit from Nasdaq as it offers a superior trading platform, an electronic market and global visibility.”

Nasdaq is also promoting the fact that it has attracted listings from companies across a range of sectors. “Many companies in the verticals of energy, finance and automotives are showing interest in Nasdaq. We hope that these capital-intensive sectors look at the US market to expand,” he added. Despite the hard-shell, Nasdaq has so far managed to attract only three companies that are Infosys, Sify and Rediff. According to Mr. Patterson, ”It is a strategic decision on the part of the company to seek a listing in the US market. Indian companies have been seeking short-term financing elsewhere. But, we are seeing interest from companies in sectors like pharma, bio-tech and IT.”



Guidelines for offering securities in public issues through the Stock Exchange mechanism.
The SEBI Board had considered the proposal of offering securities in public issues through the stock exchange mechanism and after considering the advantages of the system, approved the proposal. Accordingly, the Guidelines for offering securities in public issues on - line through the stock exchange mechanism have been framed. The Guidelines are contained in a new chapter XI A (inserted by this circular) after the existing Chapter XI of the SEBI (Disclosure and Investor Protection) Guidelines, 2000. Chapter XI A shall be applicable in respect of fixed-price issues as well as for the fixed price portion of book-built issues. The company making public issues of securities shall now have the option to issue securities through the on-line system of the Stock Exchange or through the existing banking channel. The Guidelines shall come into force with effect from the date of the circular. Yours faithfully, O P GAHROTRA SENIOR EXECUTIVE DIRECTOR -------------------------------------------------------------------------------- CHAPTER XI A GUIDELINES ON INITIAL PUBLIC OFFERS THROUGH THE STOCK EXCHANGE ON-LINE SYSTEM (e-IPO). 11A.1 A company proposing to issue capital to public through the on-line system of the stock exchange for offer of securities shall comply with the requirements as contained in this Chapter in addition to other requirements for public issues as given in these Guidelines, wherever applicable. 11A.2. Agreement with the Stock exchange. 11A.2.1 The company shall enter into an agreement with the Stock Exchange(s) which have the requisite system of on-line offer of securities. Provided that, where the Regional Stock Exchange has the requisite system of on-line offer of securities, the company shall also, enter into an agreement with the Regional Stock Exchange for offering securities to public through on-line system. 11A.2.2 The agreement mentioned in the above clause shall specify inter-alia, the rights, duties, responsibilities and obligations of the company and stock exchange (s) inter se. The agreement may also provide for a dispute resolution mechanism between the company and the stock exchange. 11A.3 Appointment of Brokers 11A.3.1 The stock exchange, shall appoint brokers of the exchange, who are registered with SEBI, for the purpose of accepting applications and placing orders with the company. 11A.3.2 For the purposes of this Chapter, the brokers, so appointed accepting applications and application monies, shall be considered as ‘collection centres’. 11A.3.3. The broker/s so appointed, shall collect the money from his/their client for every order placed by him/them and in case the client fails to pay for shares allocated as per the Guidelines, the broker shall pay such amount. 11A.3.4 The company/lead manager shall ensure that the brokers having terminals are appointed in compliance with the requirement of mandatory collection centres, as specified in clause 5.9 of Chapter V of the Guidelines. 11A.3.5 The company/lead manager shall ensure that the brokers so appointed are financially capable of honouring their commitments arising out of defaults of their clients, if any. 11A.3.6. The company shall pay to the broker/s a commission/fee for the services rendered by him/them. The exchange shall ensure that the broker does not levy a service fee on his clients in lieu of his services. 11A.4 Appointment of Registrar to the Issue 11A.4.1 The company shall appoint a Registrar to the Issue having electronic connectivity with the Stock Exchange/s through which the securities are offered under the system. 11A.5 Listing 11A.5.1 Subject to the requirement of listing on the Regional Stock Exchange, the company may apply for listing of its securities on an exchange other than the exchange through which it offers its securities to public through the on-line system. 11A.6. Responsibility of the Lead Manager 11A.6.1 The Lead Manger shall be responsible for co-ordination of all the activities amongst various intermediaries connected in the issue / system. 11A.6.2 The names of brokers appointed for the issue alongwith the names of the other intermediaries namely Lead managers to the issue and Registrars to the Issue shall be disclosed in the prospectus and application form. 11A.7 Mode of operation 11A.7.1. The company shall, after filing the offer document with ROC and before opening of the issue, make an issue advertisement in one English and one Hindi daily with nation wide circulation, and one regional daily with wide circulation at the place where the registered office of the issuer company is situated. 11A.7.2 The advertisement shall contain the salient features of the offer document as specified in Form 2A of the Companies (Central Government’s) General Rules and Forms, 1956. The advertisement in addition to other required information, shall also contain the following: the date of opening and closing of the issue the method and process of application and allotment the names, addresses and the telephone numbers of the stock brokers and centres for accepting the applications. 11A.7.3 During the period the issue is open to the public for subscription, the applicants may approach the brokers of the stock exchange/s through which the securities are offered under on-line system, to place an order for subscribing to the securities. Every broker shall accept orders from all clients who place orders through him; directly send the application form alongwith the cheque/Demand Draft for the sum payable towards application money to the Registrar to the Issue or place the order to subscribe through a stock- broker under the on-line system. 11A.7.4 In case of issue of capital of Rs. 10 crores or above the Registrar to the Issue shall open centres for collection of direct applications at the four metropolitan centres situated at Delhi, Chennai, Calcutta and Mumbai. 11A.7.5 The broker shall collect the client registration form duly filled up and signed from the applicants before placing the order in the system as per "Know your client rule" as specified by SEBI and as may be modified from time to time. 11A.7.6 The broker shall, thereafter, enter the buy order in the system, on behalf of the clients and enter details including the name, address, telephone number and category of the applicant, the number of shares applied for, beneficiary ID, DP code etc. and give an order number/order confirmation slip to the applicant. 11A.7.7 The applicant may withdraw applications in terms of the Companies Act, 1956. 11A.7.8 The broker may collect an amount to the extent of 100% of the application money as margin money from the clients before he places an order on their behalf. 11A.7.9 The broker shall open a separate bank account [Escrow Account] with the clearing house bank for primary market issues and the amount collected by the broker from his clients as margin money shall be deposited in this account. 11A.7.10 The broker shall, at the end of each day while the issue is open for subscription, download/forward the order data to the Registrar to the Issue on a daily basis. This data shall consist of only valid orders (excluding those that are cancelled). On the date of closure of the issue, the final status of orders received shall be sent to the Registrar to the issue/company. 11A.7.11 On the closure of the issue, the Regional Stock Exchange, alongwith the Lead merchant banker and Registrars to the Issue shall ensure that the basis of allocation is finalised in fair and proper manner on the lines of the norms with respect to basis of allotment as specified in Chapter VII of the Guidelines, as may be modified from time to time. 11A.7.12 After finalisation of basis of allocation, the Registrar to the Issue/company shall send the computer file containing the allocation details i.e. the allocation numbers, allocated quantity etc., of successful applicants to the Exchange. The Exchange shall process and generate the broker-wise funds pay-in obligation and shall send the file containing the allocation details to member brokers. 11A.7.13 On receipt of the basis of allocation data, the brokers shall immediately intimate the fact of allocation to their client /applicant. The broker shall ensure that each successful client/applicant submits the duly filled-in and signed application form to him along with the amount payable towards the application money. Amount already paid by the applicant as margin money shall be adjusted towards the total allocation money payable. The broker shall, thereafter, hand over the application forms of the successful applicants who have paid the application money, to the exchange, which shall submit the same to the Registrar to Issue/company for their records. 11A.7.14 The broker shall refund the margin money collected earlier, within 3 days of receipt of basis of allocation, to the applicants who did not receive allocation. 11A.7.15 The brokers shall give details of the amount received from each client and the names of clients who have not paid the application money to the exchange. The brokers shall also give soft copy of this data to the exchange. 11A.7.16. On the pay- in day, the broker shall deposit the amount collected from the clients in the separate bank account opened for primary issues with the clearing house/bank. The clearing house shall debit the primary issue account of each broker and credit the amount so collected from each broker to the "Issue Account" 11A.7.17 In the event of the successful applicants failing to pay the application money, the broker through whom such client placed orders, shall bring in the funds to the extent of the client’s default. If the broker does not bring in the funds, he shall be declared as a defaulter by the exchange and action as prescribed under the Bye-Laws of the Stock Exchange shall be initiated against him. In such a case, if the minimum subscription as disclosed in the prospectus is not received, the issue proceeds shall be refunded to the applicants. 11A.7.18 The subscriber shall have an option to receive the security certificates or hold the securities in dematerialised form as specified in the Guidelines 11A.7.19 The concerned Exchange shall not use the Settlement/Trade Guarantee Fund of the Exchange for honoring brokers commitments in case of failure of broker to bring in the funds. 11A.7.20 On payment and receipt of the sum payable on application for the amount towards minimum subscription, the company shall allot the shares to the applicants as per these Guidelines. The Registrar to the issue shall post the share certificates to the investors or, instruct the depository to credit the depository account of each investor, as the case may be. 11A.7.21. Allotment of securities shall be made not later than 15 days from the closure of the issue failing which interest at the rate of 15% shall be paid to the investors. 11A.7.22 In cases of applicants who have applied directly or by post to the Registrar to the issue, and have not received allocation, the Registrar to the issue shall arrange to refund the application monies paid by them within the time prescribed. 11A.7.23 The brokers and other intermediaries engaged in the process of offering shares through the on-line system shall maintain the following records for a period of 5 years : orders received applications received details of allocation and allotment details of margin collected and refunded details of refund of application money 11A.7.24 SEBI shall have the right to carry out an inspection of the records, books and documents relating to the above, of any intermediary connected with this system and every intermediary in the system shall at all times co-operate with the inspection by SEBI. In addition the stock exchange have the right of supervision and inspection of the activities of its member brokers connected with the system. --------------------------------------------------------------------------------


AMENDMENTS TO PART B OF CHAPTER XI OF THE SEBI (DIP) GUIDELINES, 2000
Title of Part B - "100% Book Building Process" shall be substituted by the words "Offer to Public through Book Building Process" Clause 11.3 shall be substituted by the following: "An issuer company may, subject to the requirements specified in this chapter, make an issue of securities to the public through a prospectus in the following manner: - 100% of the net offer to the public through book building process, or 75% of the net offer to the public through book building process and 25% at the price determined through book building." In clause 11.3.1 A new sub clause (v)(a) after the clause (v), shall be inserted as under :- "In case the issuer company appoints more than one book runner, the names of all such book runners who have submitted the due diligence certificate to SEBI, may be mentioned on the front cover page of the prospectus. A disclosure to the effect that " the investors may contact any of such book runners, for any complaint pertaining to the issue" shall be made in the prospectus, after the "risk factors". B. A new sub clause (viii)(a) after sub clause (viii), shall be inserted as under :- "The red herring prospectus shall disclose, only the floor price of the securities offered through it and shall not mention the maximum price or the indicative price band." A new sub clause (xvii)(a) after sub clause (xvii), shall be inserted as under : "The margin collected from categories other than Qualified Institutional Buyers shall be uniform across the book runner(s)/syndicate members, for each such category." D. Sub clause (xii) shall be deleted. A new sub-clause xvii(a) after xvii shall be inserted as under "Bids for securities beyond the investment limit prescribed under relevant laws shall not be accepted by the syndicate members from any category of investors." F. After the existing sub clause (xx), a new sub clause (xx)(a) shall be inserted as under : - "The online, real time graphical display of demand and bid prices at the bidding terminals, shall be made. The book running lead manager shall ensure the availability of adequate infrastructure for data entry of the bids on a real time basis." In Clause 11.3.3- A Sub clause (i) shall be substituted as under "In case the issuer company is making an issue of securities – under sub clause(a) of clause 11.3, 100% of the net offer to the public; under sub clause (b) of clause 11.3, the book built portion - 75% of the net offer to the public, shall be compulsorily underwritten by the syndicate members/book runner(s). Provided that nothing contained in sub-clause (i) shall apply to 60% of the net offer to the public, mandatorily to be allotted to the Qualified Institutional Buyers under proviso to clause 2.2.2 or clause 2.3.2 of these guidelines, in case the company is making an issue of securities under clause 2.2.2 or clause 2.3.2. B Sub clause( iv) shall be deleted. In clause 11.3.4.1 – A. Sub clause (v) (a) shall be substituted as under: "The number of bidding centres, in case 75% of the net offer to the public is offered through the book building, process shall not be less than the number of mandatory collection centres as specified in these regulations. In case 100% of the net offer to the public is made through book building process, the bidding centres shall be at all the places, where the recognised stock exchanges are situated." B. In sub clause (vi) the words "Institutional investors" shall be substituted by the words "Qualified Institutional Buyers". In clause 11.3.5 – A. Sub clauses (i )& (ii) shall be substituted as under : - (i) In case an issuer company makes an issue of 100% of the net offer to public through 100% book building process - not less than 25% of the net offer to the public shall be available for allocation to retail individual investors i.e. investors applying for upto 1000 securities; not less than 15% of the net offer to the public shall be available for allocation to non institutional investors i.e. investors applying for more than 1000 securities; not more than 60% of the net offer to the public shall be available for allocation to Qualified Institutional Buyers. ( ii ) In case an issuer company makes an issue of 75% of the net offer to public through book building process and 25% at the price determined through book building - in the book built portion, not less than 15% of the net offer to the public, shall be available for allocation to non institutional investors and not more than 60% of the net offer to the public shall be available for allocation to Qualified Institutional Buyers. the balance 25% of the net offer to the public, offered at a price determined through book building, shall be available only to retail individual investors who have either not participated or have not received any allocation, in the book built portion." Provided that, 60% of the issue size shall be allotted to the Qualified Institutional Buyers, in case the issuer company is making a public issue under Clause 2.2.2 or clause 2.3.2 of these guidelines. B. In sub clause (iii) the words, "investors under sub clauses ( i ) & (ii) of this clause", appearing after the words "Allotment to", shall be substituted by the words " retail individual investors and non institutional investors." C. Sub clause (iv) shall be substituted as under :- "In case of under subscription in any category, the undersubscribed portion may be allocated to the bidders in the other categories. Provided that, the unsubscribed portion in the "Qualified Institutional Buyer" category, shall not be available for subscription to other categories, in case the issuer company has made an issue of securities under clause 2.2.2 or clause 2.3.2 of these guidelines. D. In sub clause (v) (a), the words "For the class of investors other than those mentioned at clauses (i) and (ii) of this clause, the allocation ", before the words " the allocation shall be determined …" shall be substituted by the words " The allocation to the Qualified Institutional Buyers " E. Sub clause (v)( b) {wrongly numbered as (v)(a)} shall be deleted. F. Sub clause (ix) shall be substituted as under :- " In case the issuer company has made an issue of 75% of the net offer to public through book building process and 25% at the price determined through book building - the offer of 25% of the net offer to the public, made at a price determined through book building, shall open within 15 days from the date of closure of bidding ; the offer for subscription to the public, shall remain open for a period of atleast 3 working days after completing all the requirements of advertisement and despatch of issue material to all the stock exchanges ; during the time when the offer is open, the investors who have received an intimation of entitlement of securities under sub clause (xviii) of clause 11.3.1, shall submit the application forms along with the application moneys ; the other retail individual investors who had not participated in the bidding process or have not received intimation of entitlement of securities under sub clause (xviii) of clause 11.3.1 may also make an application.


Click to view more   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27  

Home | Application Forms | Equity | Flashes | Secondary Market | Mergers & Acquisitions | Taxation | Insurance |
Mutual Fund | SEBI | ESOS | Valuation | Venture Capital | Other Related Sites | Suggestions | Disclaimer | Site Map

Maintained By