fpo pricing

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INDIAN FINANCIAL SYSTEM

The heart that pumps blood,

The heart that pumps money,

The heart that needs to b strong,

The heart which sustains,

The heart of all life,

The centre part of the body,

The centre part of the economy,

Yes! This heart is INDIAs FINANCIAL SYSTEM.

Indian Financial System is like..

The core of the earth,

The core that protects,

The core that manages,

The core that holds,The core that integrates,

The core without vibrations..


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Indian Financial System.

The financial system is one of the most important inventions of modern

society. The phenomenon of imbalance of in the distribution of capital or

funds exists in every economic system. There are areas or people with

surplus funds and there are those with a deficit. A financial system

functions as an intermediary and facilitates the flow of funds from the

areas of surplus to the areas of deficit. A financial system is a

composition of various institutions, market, regulations and laws,

practices, money managers, analyst, transactions and claims and

liabilities.


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Financial Markets:

A financial market can be defined as the market in which financial assets

are created or transferred. Financial assets represent a claim to thepayment of a sum of money sometime in the future and/or periodic

payment in the form of interest or dividend.

Financial markets are sometimes classified as primary and secondary

markets. But, more often financial markets are classified as money

market and capital markets. The distinction between the two markets is

based on the differences in the period of maturity of the financial assets

issued in these markets. Money market deals with all transaction in short

term instruments (with a period of maturity of one year or less like

treasury bills, bills of exchange, etc). Whereas capital market deals with

transaction related to long term instruments (with a period of maturity of

above one year like corporate debentures, government bonds, etc) and

stock (equity and preference shares).

Financial Institutions:

In financial economics, a financial institution is an institution that

provides financial services for its clients or members. Probably the most

important financial service provided by financial institutions is acting as

financial intermediaries. Most financial institutions are regulated by the

government. Financial institutions provide service as intermediaries of

financial markets. They are responsible for transferring funds from

investors to companies in need of those funds. Financial institutions

facilitate the flow of money through the economy. To do so, savings are

brought to provide funds for loans. Financial institutions in most

countries operate in a heavily regulated environment as they are critical


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parts of countries' economies. Regulation structures differ in each

country, but typically involve prudential regulation as well as consumer

protection and market stability. Some countries have one consolidated

agency that regulates all financial institutions while others have separate

agencies for different types of institutions such as banks, insurance

companies and brokers.

Financial Services:

Financial services are the economic services provided by the finance

industry, which encompasses a broad range of organizations that

manage money, including credit unions, banks, credit card companies,

insurance companies, consumer finance companies, stock brokerages,

investment funds and some government sponsored enterprises. The

term "financial services" became more prevalent in the United States

partly as a result of the Gramm-Leach-Bliley Act of the late 1990s, which

enabled different types of companies operating in the U.S. financial

services industry at that time to merge.

Companies usually have two distinct approaches to this new type of

business. One approach would be a bank which simply buys an

insurance company or an investment bank, keeps the original brands of

the acquired firm, and adds the acquisition to its holding company simplyto diversify its earnings. Outside the U.S. (e.g., in Japan), non-financial

services companies are permitted within the holding company. In this

scenario, each company still looks independent, and has its own

customers, etc. In the other style, a bank would simply create its own

brokerage division or insurance division and attempt to sell those

products to its own existing customers, with incentives for combining allthings with one company.


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Financial Instruments:

A financial instrument is a tradable asset of any kind, either cash;evidence of an ownership interest in an entity; or a contractual right to

receive, or deliver, cash or another financial instrument.

Financial instruments can be categorized by form depending on whether

they are cash instruments orderivative instruments:

Cash instruments are financial instruments whose value is

determined directly by the markets. They can be divided into

securities, which are readily transferable, and other cash

instruments such as loans and deposits, where both borrower and

lender have to agree on a transfer.

Derivative instruments are financial instruments which derive

their value from the value and characteristics of one or more

underlying entities such as an asset, index, or interest rate. They

can be divided into exchange-traded derivatives and over-the-

counter (OTC)derivatives.

Alternatively, financial instruments can be categorized by "asset class"

depending on whether they are equity based (reflecting ownership of

the issuing entity) ordebt based (reflecting a loan the investor has made

to the issuing entity). If it is debt, it can be further categorised intoshort

term (less than one year) orlong term.

Foreign Exchange instruments and transactions are neither debt nor

equity based and belong in their own category.

Financial Markets Structure:
http://en.wikipedia.org/wiki/Loanshttp://en.wikipedia.org/wiki/Depositshttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Ownershiphttp://en.wikipedia.org/wiki/Ownershiphttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Derivative_(finance)#OTC_and_exchange-tradedhttp://en.wikipedia.org/wiki/Depositshttp://en.wikipedia.org/wiki/Loans


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Monet Market:

Money, Money, money,

I need it in a day.


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But everyone says nay.

Bank is a one, who says take,

With lot of documents to make.

Any other option I ask

Yes says the huge market mask.

With a wider mark, named as MONEY MARKET.

One of the important functions of a well-developed money market is to

channel savings into short-term productive investments like workingcapital. Call money market, treasury bills market and markets for

commercial paper and certificate of deposits are some of the examples

of a money market

Call Money Market

The call money market forms a part of the national money market, where

day-to-day surplus funds, mostly of the banks are traded. The call

money loans are of very short term in nature and the maturity period of

theses loans vary from 1 to 15 days. The money that is lent for one day

in this market is known as call money and if exceeds one day but less

than 15 days, is referred as notice money. In this market, any amount

could be lent or borrowed at a convenient interest rate, which is

acceptable to both borrower and lender. This loan are considered as

highly liquid, as they are repayable on demand at the option of either the

lender or the borrower


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Commercial papers

Commercial Paper are short term, unsecured promissory notes issued at

a discount to face value by well known companies that are financial

strong and carry high credit rating. They are sold directly by the issuers

to investor, or else placed by borrowers through agents like merchant

banks and security houses. The flexible maturities at which they can be

issued are one of the main attractions for borrowers and investors since

issues can be adapted to the needs of both. The Commercial Paper

market has the advantage of giving highly rated corporate borrowers

cheaper funds than they could obtain from the banks while still providing

institutional investor with higher interest earnings than they could obtain

from the banking system the issue of Commercial Paper imparts a

degree of financial stability to the system as the issuing company has an

incentive to remain financially strong.


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Certificates of deposits

With a view to further widen the range of money market instruments and

to give investors greater flexibility in the deployment of the short termsurplus funds, RBI permitted banks to issue Certificates of Deposits.

Certificates of Deposits the defined as short term deposit by way of

usance promissory notes having a short maturity of not less than three

months and not more than one year. They are bank deposits which are

transferable to one party to the other they are different from conventional

time deposits due to their free negotiability. Due this negotiable nature

they are also known as negotiable certificates of deposits.

Money market mutual funds

MMMF are mutual funds that invest primarily in money market

instruments of very high quality and of very short maturity commercial

banks, RBI and public financial institutions can set it either directly or

through their existing mutual funds subsidiaries. The schemes offered by


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MMMF can either be open ended or close ended. In case of open-ended

schemes the units are available on continuous basis and the MMMF

would be willing to repurchase the units, while a close ended scheme is

available for subscription for a limited period and is redeemed at

maturity.

Capital Markets:

A capital market is a market for securities (debt or equity), where

business enterprises (companies) and governments can raise long-term

funds. It is defined as a market in which money is provided for periods

longer than a year

Difference between Money Market and Capital Market:

Money market is distinguished from capital market on the basis of the

maturity period, credit instruments and the institutions:


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1. Maturity Period: The money market deals in the lending and

borrowing of short-term finance (i.e., for one year or less), while the

capital market deals in the lending and borrowing of long-term finance

(i.e., for more than one year).

2. Credit Instruments: The main credit instruments of the money

market are call money, collateral loans, acceptances, bills of exchange.

On the other hand, the main instruments used in the capital market are

stocks, shares, debentures, bonds, securities of the government.

3. Nature of Credit Instruments: The credit instruments dealt with in

the capital market are more heterogeneous than those in money market.

Some homogeneity of credit instruments is needed for the operation of

financial markets. Too much diversity creates problems for the investors.

4. Institutions: Important institutions operating in the' money market are

central banks, commercial banks, acceptance houses, nonbank financial

institutions, bill brokers, etc. Important institutions of the capital market

are stock exchanges, commercial banks and nonbank institutions, such

as insurance companies, mortgage banks, building societies, etc.

5. Purpose of Loan: The money market meets the short-term credit

needs of business; it provides working capital to the industrialists. The

capital market, on the other hand, caters the long-term credit needs of

the industrialists and provides fixed capital to buy land, machinery, etc.

6. Risk: The degree of risk is small in the money market. The risk is

much greater in capital market. The maturity of one year or less gives


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little time for a default to occur, so the risk is minimised. Risk varies both

in degree and nature throughout the capital market.

7. Basic Role: The basic role of money market is that of liquidity

adjustment. The basic role of capital market is that of putting capital to

work, preferably to long-term, secure and productive employment.

8. Relation with Central Bank: The money market is closely and

directly linked with central bank of the country. The capital market feels

central bank's influence, but mainly indirectly and through the money

market.

9. Market Regulation:

In the money market, commercial banks are closely regulated. In the

capital market, the institutions are not much regulated.

PRIMARY MARKET

The capital market consists of primary and secondary markets. The

primary market deals with the issue of new instruments by the corporate

sector such as equity shares, preference shares and debt instruments.

Central and State governments, various public sector industrial units

(PSUs), statutory and other authorities such as state electricity boards

and port trusts also issue bonds/debt instruments. The primary market

in which public issue of securities is made through a prospectus is a

retail market and there is no physical location. Offer for subscription to


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securities is made to investing community. The secondary market or

stock exchange is a market for trading and settlement of securities that

have already been issued. The investors holding securities sell

securities through registered brokers/sub-brokers of the stock exchange.

Investors who are desirous of buying securities purchase securities

through registered brokers/sub-brokers of the stock exchange. It may

have a physical location like a stock exchange or a trading floor.

Major players of primary market:

There are several major players in the

primary market. These include the

merchant bankers, mutual funds, financial

institutions, foreign institutional investors

(FIIs) and individual investors. In the

secondary market, there are the stock

brokers (who are members of the stockexchanges), the mutual funds, financial institutions, foreign institutional

investors (FIIs), and individual investors. Registrars and Transfer

Agents, Custodians and Depositories are capital market intermediaries

that provide important infrastructure services for both primary and

secondary markets.

SECONDARY MARKET

The secondary market consists of 23

stock exchanges including the National

Stock Exchange, Over-the-Counter

Exchange of India (OTCEI) and Inter

Connected Stock Exchange of India


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Ltd. The secondary market provides a trading place for the securities

already issued, to be bought and sold. It also provides liquidity to the

initial buyers in the primary market to reoffer the securities to any

interested buyer at any price, if mutually accepted. An active secondary

market actually promotes the growth of the primary market and capital

formation because investors in the primary market are assured of a

continuous market and they can liquidate their investments.

Market regulation: It is important to ensure smooth working of capital

market, as it is the arena where the players in the economic growth of

the country. Various laws have been passed from time to time to meet

this objective. The financial market in India was highly segmented until

the initiation of reforms in 1992-93 on account of a variety of regulations

and administered prices including barriers to entry. The reform process

was initiated with the establishment of Securities and Exchange Board of

India (SEBI).

The legislative framework before SEBI came into being consisted of

three major Acts governing the capital markets:

1. The Capital Issues Control Act 1947, which restricted access to

the securities market and controlled the pricing of issues.2. The Companies Act, 1956, which sets out the code of conduct for

the corporate sector in relation to issue, allotment and transfer of

securities, and disclosures to be made in public issues.

3. The Securities Contracts (Regulation) Act, 1956, which regulates

transactions in securities through control over stock exchanges. In

addition, a number of other Acts, e.g., the Public Debt Act, 1942,


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the Income Tax Act, 1961, the Banking Regulation Act, 1949, have

substantial bearing on the working of the securities market.

Capital Issues (Control) Act, 1947

The Act had its origin during the Second World War in 1943 when the

objective of the Government was to pre-empt resources to support the

War effort. Companies were required to take the Government's approval

for tapping household savings. The Act was retained with some

modifications as a means of controlling the raising of capital by

companies and to ensure that national resources were channeled into

proper lines, i.e., for desirable purposes to serve goals and priorities of

the government, and to protect the interests of investors.

Under the Act, any firm wishing to issue securities had to obtain

approval from the Central Government, which also determined the

amount, type and price of the issue. This Act was repealed and replacedby SEBI Act in 1992.

Securities Contracts (Regulation) Act, 1956

The previously self-regulated stock exchanges were brought under

statutory regulation through the passage of the SC(R)A, which provides

for direct and indirect control of virtually all aspects of securities tradingand the running of stock exchanges. This gives the Central Government

regulatory jurisdiction over (a) stock exchanges, through a process of

recognition and continued supervision, (b) contracts in securities, and (c)

listing of securities on stock exchanges. As a condition of recognition, a

stock exchange complies with conditions prescribed by Central

Government. Organized trading activity in securities in an area takes

place on a specified recognized stock exchange. The stock exchanges


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determine their own listing regulations which have to conform with the

minimum listing criteria set out in the Rules. The regulatory jurisdiction

on stock exchanges was passed over to SEBI on enactment of SEBI Act

in 1992 from Central Government by amending SC(R) Act.

Companies Act, 1956

Companies Act, 1956 is a comprehensive legislation covering all

aspects of company form of business entity from formation to winding-

up. This legislation (amongst other aspects) deals with issue, allotment

and transfer of securities and various aspects relating to company

management. It provides for standards of disclosure in public issues of

capital, particularly in the fields of company management and projects,

information about other listed companies under the same management,

and management perception of risk factors. It also regulates

underwriting, the use of premium and discounts on issues, rights and

bonus issues, substantial acquisitions of shares, payment of interest anddividends, supply of annual report and other information.

Securities and Exchange Board of India

With the objectives of improving market efficiency, enhancing

transparency, checking unfair trade practices and bringing the Indian

market up to international standards, a package of reforms consisting of

measures to liberalise, regulate and develop the securities market wasintroduced during the 1990s. The secondary market overcame the

geographical barriers by moving to screen-based trading. Trades enjoy

counterparty guarantee. Physical security certificates have almost

disappeared. The settlement period has shortened to three days. A

major step in the liberalisation process was the repeal of the Capital

Issues (Control) Act, 1947 in May 1992. With this, Government's control

over issue of capital, pricing of the issues, fixing of premia and rates of


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interest, on debentures, etc., ceased. SEBI Act, 1992 was enacted to

empower SEBI with statutory powers for (a) protecting the interests of

investors in securities, (b) promoting the development of the securities

market, and (c) regulating the securities market. Its regulatory jurisdiction

extends over corporates in the issuance of capital and transfer of

securities, in addition to all intermediaries and persons associated with

securities market.

The Depositories Act, 1996 is also administered by SEBI.

Disclosure and Investor Protection (DIP) Norms

A high level committee on capital markets has been set up to ensure co-

ordination among the regulatory agencies in financial markets. In the

interest of investors, SEBI issued Disclosure and Investor Protection

(DIP) Guidelines. Issuers are now required to comply with these

Guidelines before accessing the market. The guidelines contain a

substantial body of requirements for issuers/intermediaries. The mainobjective is to ensure that all concerned observe high standards of

integrity and fair dealing, comply with all the requirements with due skill,

diligence and care, and disclose the truth, the whole truth and nothing

but the truth. The Guidelines aim to secure fuller disclosure of relevant

information about the issuer and the nature of the securities to be issued

so that investor can take an informed decision.

Capital Market Intermediaries:


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There are several institutions,

which facilitate the smooth

functioning of the securities

market. They enable the issuers

of securities to interact with the

investors in the primary as well

as the secondary arena.

Merchant Bankers

Among the important financial intermediaries are the merchant bankers.

The services of merchant bankers have been identified in India with just

issue management. It is quite common to come across reference to

merchant banking and financial services as though they are distinct

categories. The services provided by merchant banks depend on their

inclination and resources - technical and financial.

Credit Rating Agencies

The 1990s saw the emergence of a number of rating agencies in the

Indian market. These agencies appraise the performance of issuers of

debt instruments like bonds or fixed deposits. The rating of an

instrument depends on parameters like business risk, market position,

operating efficiency, adequacy of cash flows, financial risk, financialflexibility, and management and industry environment. The objective and

utility of this exercise is twofold. From the point of view of the issuer, by

assigning a particular grade to an instrument, the rating agencies enable

the issuer to get the best price.

R & T Agents - Registrars to Issue


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R&T Agents form an important link between the investors and issuers in

the securities market. A company, whose securities are issued and

traded in the market, is known as the Issuer. The R&T Agent is

appointed by the Issuer to act on its behalf to service the investors in

respect of all corporate actions like sending out notices and other

communications to the investors as well as dispatch of dividends and

other non-cash benefits. R&T Agents perform an equally important role

in the depository system as well. These are described in detail in the

second section of this Workbook.

Stock Brokers

Stockbrokers are the intermediaries who are allowed to trade in

securities on the exchange of which they are members. They buy and

sell on their own behalf as well as on behalf of their clients. Traditionally

in India, individuals owned firms providing brokerage services or they

were partnership firms with unlimited liabilities. There were, therefore,restrictions on the amount of funds they could raise by way of debt. With

increasing volumes in trading as well as in the number of small

investors, lack of adequate capitalization of these firms exposed

investors to the risks of these firms going bust and the investors would

have no recourse to recovering their dues.

Custodians

In the earliest phase of capital market reforms, to get over the problems

associated with paper-based securities, large holding by institutions and

banks were sought to be immobilized. Immobilization of securities is

done by storing or lodging the physical security certificates with an

organization that acts as a custodian - a securities depository. All


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subsequent transactions in such immobilized securities take place

through book entries.

Mutual Funds

Mutual funds are financial intermediaries, which collect the savings of

small investors and invest them in a diversified portfolio of securities to

minimize risk and maximize returns for their participants. Mutual funds

have given a major fillip to the capital market - both primary as well as

secondary. The units of mutual funds, in turn, are also tradable

securities. Their price is determined by their net asset value (NAV) which

is declared periodically. The operations of the private mutual funds are

regulated by SEBI with regard to their registration, operations,

administration and issue as well as trading.

Depositories

The depositories are important intermediaries in the securities marketthat is scrip-less or moving towards such a state. In India, the

Depositories Act defines a depository to mean "a company formed and

registered under the Companies Act, 1956 and which has been granted

a certificate of registration under sub-section (IA) of section 12 of the

Securities and Exchange Board of India Act, 1992." The principal

function of a depository is to dematerialize securities and enable theirtransactions in book-entry form.

Depository Participants

A Depository Participant (DP) is described as an agent of the depository.

They are the intermediaries between the depository and the investors.

The relationship between the DPs and the depository is governed by an

agreement made between the two under the Depositories Act. In a


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strictly legal sense, a DP is an entity who is registered as such with SEBI

under the provisions of the SEBI Act. As per the provisions of this Act, a

DP can offer depository related services only after obtaining a certificate

of registration from SEBI.

Public Issues in Primary Market.

Initial Public Offer:

Initial Public Offering (IPO) is when an unlisted company makes either a

fresh issue of securities or an offer for sale of its existing securities or

IPO

FPO


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both for the first time to the public. This paves way for listing and trading

of the issuers securities.

1.0 Book Building - About Book Building

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.

1.1The 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 -

o Price Aggression


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o Investor quality

o Earliness of bids, etc.

The book runner and the company conclude the final price at

which it is willing to issue the stock and allocation of securities.

Generally, the number of shares is 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.

Difference between shares offered through book building and offer

of shares through normal public issue:

FeaturesFixed Price process Book Building process

Pricing Price at which the securities are

offered/ allotted is known in

advance to the investor.

Price at which securities will be

offered/ allotted is not known in

advance to the investor. Only an

indicative price range is known.

Demand Demand for the securities

offered is known only after the

closure of the issue

Demand for the securities offered

can be known everyday as the

book is built.

Payment Payment if made at the time of

subscription wherein refund is

given after allocation.

Payment only after allocation.


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Book Building Process:


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WHAT IS FPO?

A follow-on offering (often but incorrectly called secondary offering) is

an issuance of stock subsequent to the company's initial public offering.

A follow-on offering can be either of two types (or a mixture of both):

dilutive and non-dilutive. A secondary offering is an offering of securities

by a shareholder of the company (as opposed to the company itself,

which is a primary offering). A follow on offering is preceded by release

of prospectus similar to IPO: a Follow-on Public Offer (FPO).

For example, Google's initial public offering (IPO) included both a

primary offering (issuance of Google stock by Google) and a secondary

offering (sale of Google stock held by shareholders, including the

founders).

In the case of the dilutive offering, the company's board of

directors agrees to increase the share float for the purpose of selling

more equity in the company. This new inflow of cash might be used to

pay off some debt or used for needed company expansion. When new

shares are created and then sold by the company, the number of shares

outstanding increases and this causes dilution of earnings on a per

share basis. Usually the gain of cash inflow from the sale is strategic and

is considered positive for the longer term goals of the company and its

shareholders. Some owners of the stock however may not view the

event as favorably over a more short term valuation horizon.


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The non-dilutive type of follow-on offering is when privately held shares

are offered for sale by company directors or other insiders (such

as venture capitalists) who may be looking to diversify their holdings.

Because no new shares are created, the offering is not dilutive to

existing shareholders, but the proceeds from the sale do not benefit the

company in any way. Usually however, the increase in available shares

allows more institutions to take non-trivial positions in the company.

As with an IPO, the investment banks who are serving as underwriters of

the follow-on offering will often be offered the use of agreenshoeor

over-allotment option by the selling company.

A non-dilutive offering is also called a secondary market offering.

FPO Process:

FLOW CHART OF FPO PROCESS

The issue of securities to members of the public through a prospectus

involves a fairly elaborate process, the principal steps of which are

briefly described below:

Approval of Board

An approval of the board of directors of the company is required for

raising capital from the public.
http://en.wikipedia.org/wiki/Greenshoehttp://en.wikipedia.org/wiki/Greenshoehttp://en.wikipedia.org/wiki/Greenshoehttp://en.wikipedia.org/wiki/Greenshoe


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Appointment of Lead Managers

The lead manager is a merchant banker who orchestrates the issue

in consultation with the company. The lead manager must be

selected carefully.

Appointment of Other Intermediaries

Several intermediaries facilitate the public issue process. A cop-

manager is appointed to share the work of the lead manager and an

advisor to provide counsel. An underwriter is appointed who agrees to

subscribe to a given number of shares in the event the public does

not subscribe to them. The underwriter, in essence, stands guarantee

for public subscription in consideration for the underwriting

commission. Bankers are appointed to collect money on behalf of the

company from the applicants. Brokers are appointed to the issue to

facilitate its subscription. Only members of recognized Stock

Exchanges can be appointed as brokers. The number of brokers

appointed has to bear a reasonable relationship to the size of the

issue. A company may, if such a need is felt, appoint a principal

broker to coordinate the work of brokers. Registrars are appointed to

the issue to perform a series of tasks from the time the subscription is

closed to the time the allotment is made. They may be selected on

the basis of experience, expertise, credibility, and cost.


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Filing of 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

companies seeking to make a public issue have to file their offer

document with SEBI. If SEBI or the public does not communicate its

observations within 21 days from the filing of the offer document, the

company can proceed with its public issue. The prospectus and

application form (along with Articles and Memorandum of Association)

must be forwarded to the concerned stock exchange, where the issue is

proposed to be listed, for approval.

Filing of the Prospectus with the Registrar of Companies

Once the prospectus is approved by the concerned stock exchange

and consents obtained from the bankers, auditors, legal advisors,

registrars, underwriters, and others, the prospectus, signed by the

directors, must be filed with the Registrar of Companies, along with

requisite documents as required by the Companies Act, 1956.

Filing of Initial Listing Application

Within ten days of filing the prospectus, the initial listing application

must be made to the concerned stock exchanges, along with the

initial listing fees.

Promotion of the Issue

The promotional campaign typically commences with the filing of the

prospectus with the Registrar of Companies and ends with the


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release of the statutory announcement of the issue. To promote the

issue the company holds conferences for brokers, press and

investors. Advertisements are also released in newspapers and

periodicals to generate interest among potential investors.

Statutory Announcement

The statutory announcement of the issue must be made after seeking

the approval of the lead stock exchange. This must be published at

least ten days before the opening of the subscription list.

Collection of Applications

The statutory announcement (as well as the prospectus) 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 to the issue collect application

money on behalf of the company and the managers to the issue, with

the help of the registrars to the issue, monitor the situation.

Information is gathered about the number of applications received in

various categories, the number of shares applied for, and the amount

received.

Processing of Applications

The applications forms received by the bankers are transmitted to the

registrars of the issue for processing. This mainly involves scrutinizing

the applications, coding the applications, preparing a list of

applications with all relevant details.

Establishing the Liability of Underwriters


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If the issue is under subscribed, the liability of the underwriters has to

be established.

Allotment of Shares

According to SEBI guidelines, one-half of the net public offers have to

be reserved for applications up to 1000 shares and the balance one-

half for larger applications. For each of these segments, the

proportionate system of allotment is to be followed.

Listing of the Issue

The detailed listing application should be submitted to the concerned

stock exchanges along with the listing agreement and the listing fee.

The allotment formalities should be completed within 30 days after

the subscription list is closed or such extended period as permitted by

the lead stock exchange.

The FPO process begins with the management making a presentation to

the board of directors, with business plan and financial projections,

proposing that the company enter the public market. If the directors

approve the proposal than the following steps are taken:

1. Pre-Issue

a) Due Diligence

b) Draft offer document to be filed with SEBI.

c) Final Offer document to be filed with SEBI.

d) Application for listing with Stock Exchange.


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e) Promoters contribution to be brought in priorto the issue.

f) Appointment of Compliance officer.

g) In-principal approval from the Stock Exchange to be obtained

and filed with SEBI.

h) Issue Advertisement.

i) Book-Building and Bidding processes to be followed.

2. Issue

j) Subscription list to be kept open for at least 3 days.

k) Issue to open within the time prescribed.

3. Post-Issue

l) Monitoring reports to be submitted to SEBI.

m) Final Post issue monitoring reports.

n) Post issue advertisement.

o) Dispatch of share certificates etc. and allotment and listingdocuments.

One of the keys to a smooth FPO is a thorough review of your

business. This due diligence process ensures you can back up

everything you say in your SEBI registration statement.

During the due diligence phase, the company, its underwriters, and

their attorneys will focus on the registration statement. This phase will

require the company to thoroughly review its business and to

substantiate all claims in the registration statement. For example, if a

company claims that it "will have significant first-mover and time-to-

market advantages as a software-based solution in the Internet postage


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market," the company must be able to back up that claim. Indeed, the

Securities and Exchange Commission may ask for such data. This

review may also uncover additional information that needs to be

addressed or disclosed.

Besides inspecting the registration statement, the underwriters and

counsel for both parties will also question company officers and key

employees. This will include a thorough discussion of the company's

business and marketing plans, revenue projections, product

development road map, and intellectual property portfolio, with an

emphasis on identifying potential pitfalls. The due diligence team will

also speak with third parties, such as customers, retailers, and suppliers.

After all, problems with partners in the supply and distribution chain can

cascade back to the company itself. For example, a financially troubled

customer may tie up a company's inventory in a bankruptcy court

proceeding, or a supplier of a key component may face an extended

shutdown as it irons out Y2K-related problems with its factoryautomation software.

This attention to detail is required for both brand-new dot.com

companies and well-seasoned corporations alike. Even Goldman Sachs,

a veteran investment banking firm, provided this litany of risk factors in

its registration statement.

The third leg of the due diligence review involves an audit ofcompany records. Again, the team will be looking for hidden problems in

the company's corporate documents, licenses, and material contracts.

Finally, the company and its employees should be sensitive to personal

matters that may affect an Follow on public offering. For example, a

confidential settlement between a senior executive and a plaintiff for a

fraud-related case, even if it had no merits, may affect public perception

of the company and its leadership. Accordingly, a frank discussion with


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counsel is encouraged.

The due diligence process aspires to achieve the following

1 To assess the reasonableness of historical and projected earnings

of cash flows.

2 To identify key vulnerabilities, risks and opportunities.

3 To gain an intimate understanding of the company and the market

in which the company operates such that the companys

management can anticipate and manage change.

4 To set in motion the planning for the post FPO operations.

It will result in a critical analysis of the control, accounting and reporting

systems of the company and concomitantly a critical appraisal of key

personal. It will identify the value drivers of the company thus enabling

the directors to understand where the value is and to focus there efforts

on increasing that value.

Due Diligence spans the entire Public issue process. The steps involvedin due diligence are given below:

1. Decision on Public issue.

2. Business due diligence

3. Legal and Financial Due diligence.

4. Disclosure in prospectus.

5.

Marketing to investors6. Post issue compliance

The following is the list of the key areas which would come under

scrutiny and a brief description of what the due diligence exercise should

focus on in each area:

1 The financial Statementsto ensure their accuracy.

2 The AssetsConfirm their value, condition existence and legal


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title.

3 The sales strategyanalyzing the policies and procedures in place

and assessing what works and what does not.

4 The marketingwhat is driving the business and is it effective.

5 The industry in which the company operatesunderstands trends

and new technology.

6 The competitionsidentify threats.

7 The systemshow effective are they? Are upgrades required?

8 Legal and corporate and tax issues

9 Company contracts and leaseidentify what the risks and

obligations are.

10 Suppliersare they expected to remain around.

At the center of the FPO is the prospectus. The prospectus is both a

disclosure document and a marketing document, since it is the only

information that the law allows to be disseminated about the offering.

Because the company, its directors and promoters are liable for any mis-

statement or omission of material information in the prospectus,

professionals involved should exercise due diligence in ensuring the

accuracy and adequacy of all the statements contained in the

prospectus.

The prospectus is required to contain a detailed description of the

business, a description of management structure, management

compensation figures, and a description of transactions between the

corporation and management discussions, operation and financial

conditions, together with information on the procedures, dividend policy

and capitalization. Also a statement of risk factors is essential.


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It normally starts with the table of contents, definitions, risk factors,

summary of the issuer and financial data. This is followed by a detailed

disclosure under three sections:

1. Issue Structure

2. Issuer Information

3. General and Statutory Information

1) Issue Structure

a. Capital structure of the

company.

b. Objects of the issue.

c. Description of Equity

shares and terms of AOA.

d. Build up of the capital

e. Funds requirement.

f. Funding plan.

g. Appraisal.

h. Schedule of

implementation

i. Funds deployed

j. Sources of financing of

funds already deployed.

k. Details of balanced funds

deployed

l. Interim use of funds.

m. Details of shareholding of

promoters.

n. Basis for issue price

o. Issue procedure

p. Tax benefit

q. Offering information

2) Issuer Information

a. Industry overview

b. Business overview

c. History and corporate

structure of the issuer

company.

d. Details of business

e. Business strategy

f. Property

g. Directors and key managerial

personnel


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h. Shareholders agreement

i. Management

j. Board of directors

k. Compensation and interest of

directors

l. Employees

m. Dividend policy

n. Financial performance for the

last 5 years

o. Group companies and

financial data

p. Changes in accounting

policies in the last three years

q. Legal and other information

r. Results of operations as

reflected in the financial

statements

s. Outstanding litigation and

material development

t. Government approvals and

licensing arrangements

u. Industry, competition and

regulatory environment

v. Other regulatory and statutory

disclosures

3) General and Statutory Information

a) Description of basis of allotment

b) Auditors report

c) Extracts of AOA

d) List of material contracts and documents

e) General information

f) Key industry regulation.


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Conditions for issue of securities

The companies issuing securities offered through an offer document

shall satisfy following at the time of filing the draft offer document with

SEBI and also at the time of filling the final offer document with the

registrar of companies/Designated Stock Exchange.

Filing of offer document

Public issue:

A draft prospectus is required to be filed with SEBI through an

eligible Merchant banker at least 21 days prior to the filing of prospectus

with the Registrar of Companies (ROCs). However, if, within 21 days

from the date of submission of draft prospectus, SEBI specifies

changes, if any, in the draft prospectus (without being under any

obligation to do so), the issuer or the Lead Merchant Banker shall

carry out such changes in the draft prospectus before filing the

prospectus with ROCs.

A company shall not make an issue of securities if the company has

been prohibited from accessing the capital market under any order ordirection passed by board.

A company is required to make an application for listening of those

securities in Stock Exchange(s) prior to any public issues of

securities.

A company shall make a public issue or an offer for sale of

securities, only after:


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(a) The company enters into an agreement with a depository for

dematerialization of securities already issued or proposed to be issued

to the public or existing shareholders; and

(b) The company gives an option to subscribers/ shareholders/

investors to receive the security certificates or hold securities

dematerialization from with a depository. As per the requirement, all

the public issues of size in excess of Rs. 1 crore, are to made

compulsorily in the demat more. Thus, if an investor chooses to apply for

an issue that is being made in a compulsory demat mode, he has to

have a demat account and has the responsibility to put the correct DP ID

and client ID details in the bid/application forms.

Unlisted Company is required to fulfill the following further

conditions:

An Unlisted Company may take an Follow on public offering(FPO) of equity shares or any other security which may be

converted into or exchanged with equity shares at a later date

only if it meets all the following conditions :

The company has net tangible assets of at least Rs. 3

crores in each of the preceding 3 full years (of 12 months

each), of which not more than 50% is held in monetary assets, ifmore than 50% of the net tangible assets are held in

monetary assets, the company is required to make firm

commitments to deploy such excess monetary assets in its

business/project

The company has a track record of distributable profits in

terms of Section 205 of the Companies Act, 1956, for at least

three (3) out of immediately preceding five (5) years. For the


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purpose of calculation of distributable profits in terms of

Section 205 of Companies Act, 1956, extraordinary items shall

not be considered.

The company has a net worth of at least Rs, 1 crore in

each of the preceding 3 full years (of 12 months each)

In case the company has changed its name within the last one

year, at least 50% of the revenue for the preceding 1 full

year is earned by the company from the activity suggested

by the new name, and

The aggregate of the proposed issue and all the previous

issues made in the financial year in terms of size (i.e., offer

through offer document + firm allotment + promoters`

contribution through the offer document ), does not exceed

five (5) times its pre-issue net worth as per the audited

balance sheet of the last financial year.

An Unlisted Company not complying with any of the conditions

specified above may take an Follow on public offering (FPO) of

equity shares or any other security which may be converted

into or exchanged with equity shares at a later date, only if it

meets both the conditions(a) and(b) given below :

(a) The issue is made through the bookbuilding process, with at least

50% of the net offer to the public being allotted to the Qualified

Institutional Buyers ( QIBs ), failing which the full subscription

monies shall be refunded.

OR

(a)The project has at least 15 % participation by Financial

Institutions / Scheduled Commercial Banks, of which at least 10%


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comes from the appraiser(s). In addition to this, at least 10% of the

issue size shall be allotted to QIBs, failing which the full

subscription monies shall be refunded

AND

(b)The minimum post-issue face value capital of the shall be Rs. 10

crores.

OR

(b) There shall be a compulsory market-making for at least 2 years from

the date of listing of the shares, subject to the following:

Market makers undertake to offer buy and sell quotes for a

minimum depth of 300 shares ;

Market makers undertake to ensure that the bid-ask spread

(difference between quotations for sale and purchase) for their

quotes shall not any time exceed 10%

The inventory of the market makers on each of such stock

exchanges, as on the date of allotment of securities, shall be at

least 5% of the proposed issue of the company.

An unlisted public company shall not make an allotment pursuant to

a public issue or offer for sale of equity shares or any

security convertible into equity shares unless the prospective allot

tees are not less than 1000 in number.

An offer for sale shall not be made of equity shares of a company

or any other security which may be converted into or exchanged

with equity shares of the company at a later date, unless the


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conditions laid down with respect to FPO by unlisted companies are

fulfilled.

Offer for sale can also be made if the provisions specified below are

compiled at the time of submission of offer document with the Board:

(a) The issue is made through the bookbuilding process, with at least

50% of the net offer to the public being allotted to the Qualified

Institutional Buyers ( QIBs ), failing which the full subscription

monies shall be refunded.

OR

(a)The project has at least 15 % participation by Financial

Institutions / Scheduled Commercial Banks, of which at least 10%

comes from the appraiser(s). In addition to this, at least 10% of the

issue size shall be allotted to QIBs, failing which the full

subscription monies shall be refunded

AND(c)The minimum post-issue face value capital of the shall be Rs. 10

crores.

OR

(b) There shall be a compulsory market-making for at least 2 years from

the date of listing of the shares, subject to the following:

Market makers undertake to offer buy and sell quotes for aminimum depth of 300 shares ;

Market makers undertake to ensure that the bid-ask spread

(difference between quotations for sale and purchase) for their

quotes shall not any time exceed 10%

The inventory of the market makers on each of such stock

exchanges, as on the date of allotment of securities, shall be at

least 5% of the proposed issue of the company.


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An unlisted public company shall not make an allotment pursuant to

a public issue or offer for sale of equity shares or any

security convertible into equity shares unless the prospective allot

tees are not less than 1000 in number.

Permission to use the name of the Exchange in an Issuer

Companys prospectus

The Exchange follows a procedure in terms of which companies

desiring to list their securities offered through public issues are required

to obtain its prior permission to use the name of the Exchange in their

prospectus or offer for sale documents before filing the same with

the concerned office of the Registrar of Companies. The Exchange

has since last three years formed a Listing Committee to analyze

draft prospectus/offer documents of the companies in respect of their

forthcoming public issue of securities and decide upon the matter of

granting them permission to use the name of The Stock Exchange,

Mumbai in their prospectus/ offer documents. The committee

evaluates the promoters, company, project and several other factors

before taking decision in this regard.

Submission of Letter of Application

As per Section 73 of the companies Act, 1956, a company seeking

listing of its securities on the Exchange is required to submit a

Letter of Application to all the Stock Exchanges where it proposes to

have its securities listed before filing the prospectus with the

Registrar of Companies.


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Allotment of Letter of Application

As per Listing Agreement, a company is required to complete allotment

of securities offered to the public within 30 days of the date of closure of

the subscription list and approach the Regional Stock Exchange, i.e.

Stock Exchange nearest its registered office for approval of the basis of

allotment.

In case of Book Building issue, Allotment 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.

Biding Permission

As per Securities and Exchange Board of India Guidelines, the issuer

company should complete the formalities for trading at all the

Stock Exchanges where the securities are to listed within 7 working

days of finalization of Basis of Allotment. A company should

scrupulously adhere to the time limit for allotment of all securities and

dispatch of Allotment Letters/ Share certificates and Refund Orders

and for obtaining the listing permissions of all the Exchanges

whose names are stated in its prospectus or offer documents. In

the event of listing permission to a company being denied by any

Stock Exchange where it had applied for listing of its securities, it

can not proceed with the allotment of shares. However, the companymay file an appeal before the Securities and Exchange Board of India

under Section 22 of the Securities Contracts (Regulation) Act, 1956.

Requirement of 1% Security

The companies making public/ rights issues are required to deposit

1% of issue amount with the Regional Stock Exchange before theissue opens. This amount is liable to be forfeited in the event of the


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company not resolving the complaints of investors regarding delay in

sending refund orders/ share certificates, non payments of commission

to underwriters, brokers etc.

Payment of Listing Fees

All companies listed on the Exchange have to pay Annual Listing Fees

by the 30th April of every financial year to the Exchange as per the

schedule of Listing Fees prescribed from time to time.

EXEMPTION FROM ELIGIBILITY NORMS

The provisions of eligibility norms shall not apply in the following cases:

i) A banking company including a Local Area Bank ( Private Sector

Bank ) set up under sub-section (c) of Section 5 of the Banking

Regulation Act, 1949 and which has received license from the

Reserve Bank of India; or

ii) A corresponding new bank set up under the Banking Companies (

Acquisition and Transfer of Undertaking) Act, 1970 Banking Companies

( Acquisition and transfer of Undertaking) Act, 1980, State Bank of India

Act, 1955 and State Bank of India (Subsidiary Banks) Act, 1959

(Public Sector Bank);

iii) An infrastructure company:a) whose project has been appraised by a Public Financial

Institution (PFI) or Infrastructure Development Finance Corporation (

IDFC ) or Infrastructure Leasing and Financing Services Ltd. ( IL &

FS ) or a bank which was earlier a PFI; and

b) not less than 5 % of the project cost is Financed by any of

the institution referred to in sub - clause (a), jointly or severally,


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irrespective of whether they appraise the project or not, by way

of loan or subscription to equity or a combination of both ;

iv) Rights issue by a listed company.

In case the issuer company is making an issue of securities.

A. Under 100% of the net offer to the public.

B. Under 75% of the net offer to the public, it is required to be

compulsorily underwritten by the syndicate members/book runner(s)

The Syndicate members are required to enter into an underwriting

agreement with the Book Runner(s) indicating the number of securities

which they would subscribe at the predetermined price. The Book

Runner(s) are then required to enter into an underwriting agreement with

the issuer company.

Selecting the managing underwriter

The underwriter chosen by a company to manage its offering play a

critical role in the success of the FPO. The managing underwriter is

actively involved in the preparation of the companys registration

statement as well as managing the marketing and sale of the companys

stock. While many companies select to appoint mare than one managing

underwriter, the potential for differing views and approaches between

them is significant and companies must be prepared to resolve any

issues that may arise.

In selecting the managing underwriter, the following factors should be

considered:


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Industry Experience: The underwriter should have substantial

experience in FPOs in the companys industry and a good familiarity

with the company and its business.

Experienced Analyst: The underwriter should have a well known

analyst in the industry. Having an analyst with a high profile in the

relevant sector is the factor typically accorded great weight by

companies contemplating an FPO.

Individual Investment Bankers: The Company should feel free with

the individual investment bankers assigned to the transaction. The

right chemistry between the bankers and management is critical.

Reputation and Attention: While reputation is important, top tier

underwriters may not give smaller companies as much attention as

other underwriters. On the other hand, those less prominent

underwriters may not be able to provide the resources available to the

leading underwriters.

Distribution strength: The potential managing underwriters and the

company should discuss whether the issue should be sold primarily to

retail investors or institutional investors, or both. The underwriters

selected should have a substantial institutional or retail sales force, as

required.

Aftermarket Support: The underwriter should have a strong record of

aftermarket price performance for the stock of the companies that it

has recently taken public. A strong performance record indicates how

well the underwriter priced and supported recent transactions.

The company should discuss with potential underwriters and assess

critically any potential conflicts in the representation. Conflicts may result

from an underwriters relationship with competitors or an underwriters

relationship with the company aside from underwriting relationship. It is


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conceivable that an underwriter who holds an equity stake in the

company that would be counted as underwriters compensation would

forgo the assignment in order to maximize potential profits on the equity

stake. If made after FPO registration statement is filed, however, this

decision could cripple an FPO. These and related issues should be

thoroughly discussed with each potential underwriter

Price Mechanism:


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FAQs

Q: How is this auction process going to work?

A: At the outset my belief is this is another innovation for the capitalmarkets, new process of price discovery. In fact, we were the advisors to

the Maruti disinvestment tranche II that happened couple of years ago

and the way this will pan out is that this is popularly called as winners

curse. So, in this model every issue will have a floor price and the

institutional investors will bid above the floor price. Each investor will get

allocation or allotment based on price priority, i.e the price at which he orshe bids for that issue. So, taking an example if an institutional investor

A bids for 1 crore shares for an issue at a price of Rs 500 and a second

investor B bids for the same issue at a price of Rs 450 the investor who

has bid at Rs 500 will get the entire allotment for the shares he has bid

for. Second point in case two or more investors bid a certain quantity at

the same price then the allotment to these pairs of investors will be in

proportion because they have bid at the same price. So the model that

has been followed here is each investor will actually put his foot where

his mouth is. i.e the price at which he bids he will get full quantity.

Q: Different investors will get different amounts of shares at

different prices- right?

A: That is absolutely correct.

Q: So what is the benefit in this process versus the standard book

building process for instance does this mean that the issuer will

get better price determination and therefore more money in this

issue or does it mean that the institutional investor will get more

allocation if he is willing to put his money where his mouth is?


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A: My belief is that this is a win-win situation for both the issuer and the

investor for high quality issuances. There are some of the implications

that I see. One, this will lead to higher price realization for the issuer.

Two, investor who today are investing on the allotment system which is

proportionate will today understand that if they are able to analyze an

issue in more detail they are able to understand the management, the

business model and the business parameters in a better fashion will

probably be in a position to bid more accurately and at a higher price for

the issue. Three, today we have also seen in many of the issues which

have got oversubscribed in plenty, high quality investors have tended to

stay away because under the proportionate allotment system they have

got relatively smaller allotment because the number of investors joins

the band wagon once they see the issue is doing well.

In the system which is the current auction process, the same will not be

the case. An investor who does more work is more bullish on a story will

tend to bid at a price which is different and therefore stand technicallychance to get higher or better allotment.

Two or three points however that I want to point out the way currently

this is envisaged there will be a floor price and we are not envisaging

retail discount on this issue. Second thing is this as I mentioned in the

beginning of this programme this is winners curse so investor who doesmore homework, bids at a higher price tends to get larger quantity of

allotment in a conceptual framework. So he really has to put his bets on

the right and high quality issuances.

Q: Any data based on international proceeding because I know we

have only done this once before in India like I mentioned for the

Maruti follow on offer on how much higher the price that you


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achieve on an auction system like this will be compared to the price

that you would be achieving through regular book build mechanism

that we have been using all these years?

A: I frankly do not have the data off hand about international

precedence. But I am happy to state because we were involved in the

Maruti tranche two that happened. Both with respect to the floor price

and the floor price that was set the auction price that got achieved in the

tranche two disinvestment in my mind was a reasonably premium to the

floor price that was set. I am not able to recall the exact number but it

was probably close to 20% or 15-20%. Therefore it would depend on

issue to issue but issuances where investors are hungry and they

believe it is a high quality issue my belief is that the premium tend to be

definitely reasonable and beneficial to the issuer.

Q: Maruti aside this is the first time we are attempting this with

NTPC what are some of the challenges that you expect this processwill have to face as you try and ensure that institutional investors

understand how to play this game so to speak?

A: My belief is that Indian capital market especially the primary markets

under the Indian regulator has really been going from strength to

strength through its constant innovation process and if you look at the

thousand odd investors, institutional investors who has been followingthe Indian primary markets they are bound to understand this auction

process reasonably well. Having said that, in any new process that you

set for a market like Indian there will be a small learning phase and the

learning phase will not have any major stumbling box. This is one point.

The second point is, if you look at some of the successful issuances in

the last 2-3 years the institutional bucket which is close to 50-60% of the

issue physiologically the issuers and the market has tended to say it is


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60 times oversubscribed, 50 times oversubscribed so in a French

auction model physiologically you will see that since this follows a

certain auction process the number of times oversubscribed may not be

sort of large. But that should not sort of dissuade us from calling it a

successful issue. At the end of the day it will be successful based on the

quality of investors who bid for the issue and the premium above the

floor price that they tend to bid for it. So the way we have to measure a

successful issue will be a little different from what we have been doing

so far.

fpo pricing

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