group 1 disclosures in ipo
TRANSCRIPT
15 CRITICAL DISCLOSURE REQUIREMENTS
IN OFFER DOCUMENT OF IPO
IPO – MCX & Speciality Restaurants
By:
Rucha Kavthekar (64)
Devanshi Mehta (87)
Darshana Mhatre (91)
Arpita Nair (96)
Nilesh Patil (112)
Vivek Patil (115)
Aditya Phatak (121)
Anushikha Sanghvi (135)
ContentsGlossary.........................................................................................................................................3
INITIAL PUBLIC OFFERING (IPO)....................................................................................5
15 CRITICAL DISCLOSURES................................................................................................9
Disclosure 1: Capital Structure.................................................9
Disclosure 2: Basis of Issue Price............................................11
Disclosure 3: Promoters’ Contribution...................................13
Disclosure 4: Lock-In Requirements.......................................14
Disclosure 5: Objects Of The Offer.........................................15
Disclosure 6: IPO Grading (2.5 A):..........................................19
Disclosure 7: Basis of Allotment.............................................21
Disclosure 8: Minimum Subscription.....................................24
Disclosure 9: Outstanding Litigation......................................26
Disclosure 10: Pricing Method...............................................27
Disclosure 11: Green Shoe Option.........................................28
Disclosure 12: Underwriting...................................................34
Disclosure 13: Financial Statements......................................36
Disclosure 14: Risk Factors.....................................................39
Disclosure 15: Management and Other Disclosures..............51
Disclosure 16 : Dividend Policy..............................................54
PROPOSED CHANGES BY SEBI IN IPO PROCESS .............................................56
BIBLIOGRAPHY.......................................................................................................................57
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Glossary
Draft offer document: refers to the first document filed by companies with SEBI and stock exchanges for approval, who after reviewing, communicate their observations to the Company, which the company has to incorporate in the offer document. SEBI typically requires a period of 30 days for processing a draft offer document. The draft offer document is placed by SEBI on its website for public comments for a period of 21 days.
Red herring prospectus: A red herring prospectus (RHP) is a preliminary registration document that is filed with SEBI in the case of book building issue which does not have details of either price or number of shares being offered or the amount of issue. This means that in case price is not disclosed, the number of shares and the upper and lower price bands are disclosed. On the other hand, an issuer can state the issue size and the number of shares are determined later. In the case of book-built issues, it is a process of price discovery as the price cannot be determined until the bidding process is completed. Hence, such details are not shown in the Red Herring prospectus filed with ROC in terms of the provisions of the Companies Act. Only on completion of the bidding process, the details of the final price are included in the offer document. The offer document filed thereafter with ROC is called a prospectus.
Offer Document: means the final prospectus in the case of a public issue/offer for sale which is filed and registered with the Registrar of Companies and the stock exchanges. Since 1992, the entire IPO regulation is driven by disclosures-inform the investors as much as is possible and is relevant for him to take an informed investment decision. The disclosure requirements regarding the issuance of securities are covered in detail in the SEBI (Disclosure and Investor Protection) Guidelines, 2000.Filed with the ROC and SE’s it covers all the relevant information to help an investor to make his/her investment decision.
Green Shoe Option: Green Shoe option means an option of allocating shares in excess of the shares included in the public issue and operating a post-listing price stabilizing mechanism for a period not exceeding 30 days in accordance with the provisions of Chapter VIIIA of DIP Guidelines, which is granted to a company to be exercised through a Stabilizing Agent. This is an arrangement wherein the issue would be over allotted to the extent of a maximum of 15% of the issue size. From an investor’s perspective, an issue with green shoe option provides more probability of getting shares and also that post listing price may show relatively more stability as compared to market.
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Underwriting: of shares is a guarantee or insurance given by the underwriter to the company that the shares offered to the public will be subscribed in full.
ASBA: Stands for ‘Applications Supported by Blocked Account’. It is a process approved by SEBI for providing an alternative mode of payment in issues whereby the application money remains in the investors’ account till finalization of basis of allotment in the issue. ASBA process would require retail individual investors bidding at cut-off, to apply through Self Certified Syndicate Banks (SCSBs), in which the investors have bank accounts. SCSBs would accept the applications, block the fund to the extent of bid payment amount, upload the details in the electronic bidding system of BSE or NSE, unblock once basis of allotment is finalised and transfer the amount for allotted shares, to the issuer. This would co-exist with the current procedure of investors applying through sub syndicate/ syndicate members with cheque as a payment instrument.
Escrow: An escrow is a legal arrangement to help parties perform their contracts and avoid disagreements. The escrow agreement has three parties: a "depositor", an "escrow agent" and a "beneficiary". In the typical escrow, the depositor is required to entrust money or property with an escrow agent. The escrow agent holds the escrow deposit until it can be released to the beneficiary upon the happening of some future event, or the performance of some condition.
Book Building: means a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document;
Margin Amount: The amount paid by the Bidder at the time of submission of the Bid, being 100% of the Bid Amount.
Retail Individual Bidders: Individual Bidders (including HUFs and Eligible Employees) who have Bid for an amount less than or equal to Rs. 200,000 in any of the bidding options in this Issue.
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INITIAL PUBLIC OFFERING (IPO)
What is an IPO?
An IPO is when a company which is presently not listed at any stock exchange makes either a
fresh issue of shares or makes an offer for sale of its existing shares or both for the first time
to the public. Through a public offering, the issuer makes an offer for new investors to enter
its shareholding family.
The shares are made available to the investors at the price determined by the promoters of the
company in consultation with its investment bankers.
The successful completion of an IPO leads to the listing and trading of the company’s shares
at the designated stock exchanges.
Why does a company make an IPO?
Going public provides an opportunity to the companies to raise cash for setting up a
project or for diversification/expansion or sometimes for working capital or even to
retire debt or for potential acquisitions. This is called fresh issue of capital where the
proceeds of the issue go to the company.
Companies also go public to provide a route for some of the existing shareholders
including venture capitalists to exit fully or partially from the company’s shareholding
or for promoters to partially dilute their holding. This is called an offer for sale where
the proceeds of the issue go to the selling shareholders and not to the company.
It increases the company’s ability to raise debt at finer rates. The company also gets a
continuing window for raising more capital, both from the domestic and overseas
equity markets. Acquisitions also become simpler as instead of cash payouts,
companies can use shares as a currency. Of course, listing carries a considerable
degree of prestige for the company.
Listing also lends liquidity to the stock, which is very critical for the success of
employee stock ownership plans, which help to attract top talent.
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Eligibility Norms for Making an IPO
SEBI has stipulated the eligibility norms for companies planning an IPO which are as
follows:
i. Net tangible assets of at least Rs. 3 crore in each of the preceding three full years
ii. Distributable profits for at least three out of the immediately preceding five years
iii. Net worth of at least Rs. 1 crore in each of the preceding three full years
iv. The issue size should not exceed 5 times the pre-issue net worth
v. If there has been a change in the company’s name, at least 50% of the revenue for
preceding one year should be from the new activity denoted by the new name
Alternative Route
Recognizing that many good companies, for one reason or the other, may not be able to
comply with all the eligibility norms, two other alternative routes are available to such
companies:
Alternative I:
i. Issue shall be through book building route, with at least 50% to be mandatory allotted
to the Qualified Institutional Buyers (QIBs).
ii. The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a
compulsory market-making for at least 2 years
OR
Alternative II:
i. The “project” is appraised and participated to the extent of 15% by FIs/Scheduled
Commercial Banks of which at least 10% comes from the appraiser(s).
ii. The minimum post-issue face value capital shall be Rs. 10 crore or there shall be a
compulsory market-making for at least 2 years. In addition to satisfying the aforesaid
eligibility norms, the company shall also satisfy the criteria of having at least 1000
prospective allotted in its issue.
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Exemptions to certain category of entities from the eligibility norms
The following categories of entities are eligible for exemption from entry norms.
i. A banking company including a local area bank set up under the Banking Regulation
Act, 1949
ii. A corresponding new bank set up under the Banking Companies Act, 1970
iii. An infrastructure company
iv. Whose project has been appraised by a Public Financial Institution (PFI)
v. Not less than 5% of the project cost is financed by any of the PFI
vi. Rights Issue by a listed company
Minimum Public Shareholding Requirement
Clause 40A of the BSE Listing Agreement requires at least 25% of the post issue paid up
capital to be with the ‘public’ (i.e. other than promoter and promoter group).
As per rule 19(2) (b) of the Securities Contract (Regulation) Rules, a minimum of 25% of
each class of security must be offered to the public for subscription. However, at least 10%
can be offered if the following 3 conditions are fulfilled:
Minimum 2 MM securities (excluding reservations, firm allotment & promoter contribution)
to be offered to the public
Minimum offer size – Rs. 100 crores
Issuance through book building with 60% QIB allocation
Continuous public shareholding since listing also needs to be maintained as per Clause 40A
of the listing agreement.
The aforesaid requirement of maintaining minimum level of public shareholding on a
continuous basis will not be applicable to government companies (as defined under Section
617 of the Companies Act, 1956), infrastructure companies (as defined under Chapter II
Clause 14(4) of the SEBI ICDR Regulations 2009) and companies referred to the Board for
Industrial and Financial Reconstruction.
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Safety Net for Small Retail Investors:
• ‘Safety Net’ mechanism is being considered only for the small retail investors, who
would be compensated by the promoters and other entities selling shares through IPOs
in the event of the company’s shares plunging below a certain threshold limit within
six months of listing or the time-frame set by SEBI.
• The 'safety net' is one of the key proposals being discussed by Sebi for its primary
market reforms. It has been felt that such a provision would help in fair pricing of
IPOs, besides providing investors some sort of a capital protection guarantee. As per
the current regulations, the companies are allowed to provide such ‘safety nets’ during
their IPOs, but it is not mandatory for them to make such provisions and only a few
companies have provided such facility for investors in the past.
• These measures will stimulate financial savings among households as well as give a
fillip to the mutual fund industry. More and more households should be encouraged to
save in financial instruments rather than in gold.
• Many companies and investment bankers have come under the criticism of over-
pricing of IPOs after their shares fell below the public offer price levels in several
cases.
• The sources said the companies could be allowed to pass on the costs of ‘safety net’
provision to the investment bankers, who are primarily responsible for fixing the price
of shares to be sold through IPOs.
New definition for 'small or retail investors'
There is some ambiguity in current regulations for the definition of small or retail investors.
For IPOs, the investors putting in up to Rs two lakhs are considered retail investors, while
already listed companies distinguish small and large individual shareholders as those holding
shares worth up to Rs one lakh and those holding shares worth more than Rs one lakh,
respectively.
Introduction of e-IPO:
E-IPO would allow investors to bid for IPO shares electronically and without any physical
paperwork. SEBI has cleared the ground for E-IPOs, which could cut down the time taken
between close of an offer and listing from 12 days now to 5 days.
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15 CRITICAL DISCLOSURES
Disclosure 1: Capital Structure
The capital structure must be presented in the following manner:
(a) Authorised, issued, subscribed and paid up capital (Number of instruments, description
and aggregate nominal value).
(b) Size of the present issue, giving separately promoters’ contribution, firm allotment/
reservation for specified categories and net offer to public.
After the details of capital structure, the following notes must also be incorporated:
(a) Details such as date of issue, number of shares, face value, issue price, nature of
allotment.
(b) Note relating to promoters' contribution and lock-in period.
(c) Details of all ’buy-back’ and `stand by’ and similar arrangements for purchase of
securities by promoters, directors and lead merchant bankers.
To facilitate transition to the revised Schedule VI, Ministry of Corporate Affairs vide its
circular dated 5 September 2011 has clarified that the presentation of financial statements for
the limited purpose of Initial Public Offer (IPO)/Follow on Public Offer (FPO) may be made
as per the pre-revised Schedule VI.
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Case Study
Disclosure MCX(Company1 ) Speciality Restaurant(Co. 2)
Capital Structure Authorised Share Capital
70,000,000 Equity Shares
Issued, Subscribed And
Paid Up Share
Capital
50,998,369
Present Offer In Terms Of
This Red Herring
Prospectus*
6,427,378
Equity Capital After The
Offer
50,998,369 Equity Shares
fully paid-up
Authorised Share Capital:
580,000,000
Issued, Subscribed And
Paid-Up Capital
Before The Issue:
352,182,420
Present Issue In Terms Of
This
Prospectus: 11,739,415
Equity Shares
Equity Capital After The
Issue:
46,957,657 Equity Shares
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Disclosure 2: Basis of Issue Price
Issue price is the price at which IPO is offered to the investors. Issue price can either be fixed (fixed price issue) or a price band between floor price and cap price (book-building issue). It is necessary for the company to disclose the basis applicable in calculation of the issue price. (Either in case of book building or fixed price issue).
SEBI and Stock Exchange Guidelines
(a) The basis for issue price/ floor price/ price band shall be disclosed and justified on the basis of the following information, which shall be also disclosed separately:
(i) Earnings Per Share, i.e., EPS pre-issue for the last three years (as adjusted for changes in capital).
(ii) P/E pre-issue.
(iii) Average Return on Net Worth in the last three years.
(iv) Minimum Return on Increased Net Worth required to maintain pre issue EPS.
(v) Net Asset Value per share based on last balance sheet.
(vi) Net Asset Value per share after issue and comparison thereof with the issue price.
(vii) Comparison of all the accounting ratios of the issuer company as mentioned above with the industry average and with the accounting ratios of the peer group (i.e., companies of comparable size in the same industry (indicate the source from which industry average and accounting ratios of the peer group has been taken).
(viii) The face value of shares (including the statement about the issue price/ floor price/ price band being “X” times of the face value), provided the projected earnings shall not be used as a justification for the issue price in the prospectus.
(b) The Lead Merchant Banker shall not proceed with the issue in case the accounting ratios mentioned above do not justify the issue price.
(c) In case of book built issues, the red herring prospectus shall state that the final price would be determined on the basis of the demand from the investors.
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Case Study
Disclosure MCX(Company1 ) Speciality Restaurant(Co. 2)
Basis of Issue Price Qualitative Factors
Leadership Position in the
commodity futures industry –
Market share in terms of the
total value of
Commodities futures contracts
traded on our Exchange in
Fiscal 2011 was 82.4% of the
Indian commodity
Experienced Board of
Directors and management
Product and service
innovation
Technology Infrastructure
Scalable technology platform
and business model
Integrated infrastructure and
network of alliances.
Comparison of Accounting
Ratios with Industry Peers
There are no listed companies
in India that engage in a
business similar to that of
MCX. Hence, it is not
possible to provide an
industry comparison in
relation to our Company.
Qualitative Factors
A leading portfolio of core
brands including our flagship
brand, Mainland China
Focus on guest needs
Experienced Founder and
Promoter, management team
and dedicated staff
Diversified business model
Strategic locations
Robust processes and scalable
model
Strong financial position and
profitability
Comparison with Industry
peers
We believe that none of the
listed companies in India are
engaged exclusively in the fine
dining restaurant business.
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Disclosure 3: Promoters’ Contribution
Promoters’ contribution in any issue shall be in accordance with the following provisions
TYPE OF ISSUE PROMOTER’S CONTRIBUTION
Public Issue by Unlisted Companies Not less than 20% of the post issue capital
Offers for Sale Not less than 20% of the post issue capital
Public Issues by Listed Companies
Either to the extent of 20% of the proposed
issue or ensure post-issue shareholding to the
extent of 20% of the post-issue capital
Composite Issues
At the option of the promoter(s) be either 20%
of the proposed public issue or 20% of the post-
issue capital.
Issue of Convertible Security Not less than 20% of the post issue capital.
Securities Ineligible for Computation of Promoters’ Contribution
Where the promoters of any company making an issue of securities have acquired equity
during the preceding three years, before filing the offer documents with the Board, such
equity shall not be considered for computation of promoters contribution if it is;
(i) acquired for consideration other than cash and revaluation of assets or capitalisation of
intangible assets is involved in such transaction(s); or
(ii) resulting from a bonus issue, out of revaluation reserves or reserves created without
accrual of cash resources 76(or against shares which are otherwise ineligible for computation
of promoters’ contribution);
In case of public issue by unlisted companies, securities which have been acquired by the
promoters during the preceding one year, at a price lower than the price at which equity is
being offered to public shall not be eligible for computation of promoters’ contribution.
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Disclosure 4: Lock-In Requirements
Lock-in period in any issue shall be in accordance with the following provisions
TYPE LOCK-IN PERIOD
Minimum Specified Promoters’ Contribution in Public Issues 3 years
Excess Promoters’ Contribution 1 year
Pre-issue share capital of an unlisted company 1 year
securities issued on firm allotment basis 1 year
Case Study
Multi Commodity Exchange Of India Limited
The details of the Equity Shares forming part of the Promoter‘s contribution which shall be
locked in for a period of three years have been provided below:
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Speciality Restaurants Limited
The details of promoter’s contribution and lock-in period are as follows
Disclosure 5: Objects Of The Offer
The object of raising funds through the issue, that is whether for fixed asset creation and/ or
for working capital or any other purpose, shall be disclosed clearly in the prospectus.
The disclosure should be in reference to the following points
Funds Requirement
(a) The requirement for funds proposed to be raised through the issue shall be disclosed
clearly.
(b) Where the company proposes to undertake more than one activity, i.e diversification,
modernisation, expansion, etc., the total project cost shall be given activity- wise or
project wise as the case may be.
(c) Where the company is implementing the project in a phased manner, the cost of each
phase, including the phase, if any, which has already been implemented, shall be
separately given.
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Funding Plan (Means of Finance)
(a) An undertaking shall be given in the prospectus by the issuer company confirming
firm arrangements of finance through verifiable means towards 75% of the stated
means of finance, excluding the amount to be raised through proposed Public/ Rights
issue, have been made
(b) The balance portion of the means of finance for which no firm arrangement has been
made shall be mentioned without specification
Funds Deployed
(a) Actual expenditure incurred on the project (in cases of companies raising capital for a
project) upto a date not earlier than two months from the date of filing the prospectus
with the Registrar of Companies, as certified by a Chartered Accountant.
(b) A cash flow statement showing funds which have been brought in as promoters’
contribution and have been deployed prior to the public issue.
Case Study
Multi Commodity Exchange Of India Limited
MCX in its offer document has not followed the SEBI structure of disclosure pertaining to
Objects of the Offer regarding fund requirement, fund planning and fund deployment as the
Offer is an offer purely for sale and its main objective is to provide liquidity to its equity
share holders. It has covered this section of the disclosure in three heads as follows
Objective:
Here it states that the objects of the Offer was to achieve the benefits of listing on the BSE
and to carry out the sale of 6,427,378 Equity Shares by the Selling Shareholders The listing
of the Equity Shares will enhance thier brand name and provide liquidity to the existing
shareholders. Listing will also provide a public market for the Equity Shares in India. It
mentions that the Company will not receive any proceeds from the Offer.
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Offer Expenses:
Here it discloses in brief the offer related expenses pertaining to underwriting fees, selling
commission, fees payable to the BRLMs, legal counsels, Bankers to the Offer, Escrow
Collection Banks and the Registrar to the Offer, printing and stationery expenses, advertising
and marketing expenses and all other incidental and miscellaneous expenses for listing the
Equity Shares on BSE. It has also given a small table showing the breakup of the expenses
Monitoring of Utilization of Funds:
Here it menstions that since the Offer is a pure offer for sale and the Company would not
receive any proceeds from the Offer, the Company has not appointed a Monitoring Agency
for the Offer.
Speciality Restaurants Limited
Speciality Restaurants is a public issue hence it has disclosed in extreme details all the
requirements as per SEBI guidelines in disclosure of objects of offer.
It first mentions the objects of the offer are to deploy the funds issues for four purposes
namely:
1. Development of New Restaurants;
2. Development of a food plaza;
3. Repayment of portions of term loan facilities; and
4. General corporate purposes
It has further dissected each of these activities under the following heads and explained in
detail the deployment of funds for each purpose
Issue Proceeds and Net Proceeds
The details of the proceeds of the Issue are set forth in the table below:
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Utilisation of the Net Proceeds
The proposed utilisation of the Net Proceeds is set forth in the table below:
Deployment of the Net Proceeds
The Net Proceeds are expected to be deployed in accordance with the schedule set forth
below
It has also mentioned in detail the expenses pertaining to each of the objects of issue
including issue related expenses
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Disclosure 6: IPO Grading (2.5 A): Unlisted company can go for IPO of equity shares if following conditions are satisfied as on
the date of filing of Prospectus (in case of fixed price issue) or Red Herring Prospectus (in
case of book built issue) with ROC:
1. The unlisted company s h o u l d h a v e obtained grading for the IPO from at
least one credit rating agency.
2. Disclosures of all the grades obtained, along with the rationale/ description
furnished by the credit rating agency/agencies for each of the grades obtained,
have been made in the Prospectus (in case of fixed price issue) or Red Herring
Prospectus (in case of book built issue).
3. The expenses incurred for grading IPO should be been borne by the company
obtaining grading for IPO.
IPO Grading and its meaning:
Grade 1: Poor fundamentals
Grade 2: Below average fundamentals
Grade 3: Average fundamentals
Grade 4: Above Average fundamentals
Grade 5: Strong fundamentals
IPO grading is not optional. A Company which has filed the draft offer document for its IPO
with SEBI on or after 1st May, 2007, is required to obtain grade for the IPO from at least one
Credit Rating Agencies (CRA). IPO grading is independent, unbiased and relative assessment
of fundamentals of the IPO issue. It can be used by investor as a tool to aid investment
decisions.
IPO grades cannot be rejected. However the issuer has the option of opting for another
grading by a different agency. In such case all grades obtained for the IPO have to be
disclosed. IPO grading can be done either before filing the draft offer documents with SEBI
or thereafter. IPO grading can be done either before filing the draft offer documents with
SEBI or thereafter. IPO grading is done without taking into account the issue price of the
security in the IPO.
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What IPO grading does not do -
1. An IPO grade is NOT a suggestion or recommendation as to whether one should
subscribe to the IPO or not. IPO grade needs to be read together with the disclosures
made in the prospectus including the risk factors as well as the price at which the
shares are offered in the issue.
2. IPO Grading is NOT a recommendation to buy, sell or hold the securities graded.
3. It is NOT a comment on the valuation or pricing of the IPO graded nor is it an
indication of the likely listing price of the securities graded.
IPO Grading is analysis of fundamentals. It is based on following:
1. Business Prospect
2. Financial Performance
3. Management capabilities
4. Compliance and litigation history
5. Corporate governance
Speciality Restaurant 4/5 By CRISIL
MCX 5/5 By CRISIL
IPO Rating
IPO Ratings are provided by various financial institutions & independent brokers. Few
popular IPO Rating providers in India are Capital Market, Money Control, S P Tulsian's IPO
recommendations etc.
Capital Market Publishers India Pvt. Ltd. is an India based financial information service
provider. Information provided by CapitalMarket.com (CM) includes corporate databases,
corporate news, streaming stock quotes from BSE and NSE, IPO information, mutual funds
information, equity research etc.
Rating Scale: Low 1 - 100 High
Speciality Restaurant 48/100
MCX 50/100
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Disclosure 7: Basis of AllotmentIn a public issue of securities, the Executive Director/Managing Director of the Designated
Stock Exchange along with the post issue Lead Merchant Banker and the Registrars to the
Issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper
manner in accordance with the following guidelines:
This section shows percentage of issue size and number of equity shares which are available
for allotment to QIB’s, retail individual investors, and non institutional bidders depending
upon the process which is selected.
For book building process
QIB- At least 50% of the Net Issue being allotted. However, upto 5% of the Net QIB
Portion shall be available for allocation proportionately to Mutual Funds only.
Non institutional bidders- Not less than 15% of the Net Issue or the Net Issue less
allocation to QIBs and Retail Individual Bidders.
Retail individual bidders- Not less than35% of the Net Issue or the Net Issue less
allocation to QIBs and Non-Institutional Bidders.
Case Study
Multi Commodity Exchange Of India Limited
Offer of up to 6,427,378 Equity Shares of the Company. The Offer comprises a Net Offer of
6,177,378 Equity Shares to the public and an Employee Reservation Portion of up to 250,000
Equity Shares. The Offer will constitute 12.60% of the post Offer paid up capital of the
Company. The Net Offer will constitute 12.11% of the post Offer paid up capital of our
Company.
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Speciality Restaurants Limited
Public Issue of 11,739,415 Equity Shares for cash at a price of Rs. 150 per Equity Share
(including share premium of Rs. 140 per Equity Share) aggregating to Rs. 1,760.91 million.
The Issue will constitute 25% of the post-Issue paid-up equity share capital of the company.
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Disclosure 8: Minimum Subscription
As per SEBI Guidelines following are requirements of disclosure related to minimum
subscription:
(a) Non-UnderWritten
“If the issuing company does not receive the minimum subscription of 90 per cent of
the issued amount on the date of closure of the issue, or if the subscription level falls below
90 per cent. after the closure of issue on account of cheques having being returned unpaid or
withdrawal of applications, the issuing company shall forthwith refund the entire subscription
amount received. If the issuing company fails to refund the entire subscription amount within
15 days from the date of the closure of the issue, it is liable to pay the amount with interest to
the subscribers at the rate of 15 per cent per annum for the period of the delay.”
(b) UnderWritten
"If the issuing company does not receive the minimum subscription of 90 per cent of
the net offer to public including devolvement of Underwriters within 60 days from the date of
closure of the issue, the issuing company shall forthwith refund the entire subscription
amount received with interest to the subscribers at the rate of 15 per cent per annum for the
period of the delay beyond 60 days.”
• Exceptions:
1. Divestment: In case the IPO is with the intension of divestment of stakeholders share,
minimum subscription clause is ot applicable
2. Infrastructure: These relaxations would be applicable to Infrastructure Companies
as defined under Section 10(23G) of the Income Tax Act, 1961, provided their
projects are appraised by any Developmental Financial Institution (DFI) or IDFC or
IL&FS. The projects must also have a participation of at least 5% of the project cost
(in debt and/or equity) by the appraising institution.
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Disclosure MCX Speciality Restaurant Comment
Minimum
Subscription
In terms of the SEBI
Regulations the
requirement for
minimum subscription is
not applicable to the
Offer.
Our Company shall
ensure that the number
of prospective allotees
to whom Equity Shares
will be Allotted shall not
be less than 1,000. Any
expense incurred by our
Company on behalf of
the Selling Shareholders
with regard to refunds,
interest for delays, etc.
for the Equity Shares
being offered through
the Offer, will be
reimbursed by the
selling Shareholders to
our Company, in
proportion to the Equity
Shares contributed by
the Selling Shareholders
to the Offer.
If our Company does not
receive the minimum
subscription of 90% of the
Issue, including
devolvement of
Underwriters within 60
days from the Bid/ Issue
Closing Date, our
Company shall forthwith
refund the entire
subscription amount
received. If there is a delay
beyond eight days after our
Company becomes liable
to pay the amount, our
Company shall pay interest
as prescribed under Section
73 of the Companies Act.
Further, we shall ensure
that the number of
prospective Allottees to
whom Equity Shares will
be Allotted shall not be less
than 1,000.
In MCX, Minimum
subscription requirement
is not applicable as it is
an offer for Sale
(divestment)
This is as per Minimum
Subscription Clause
6.3.8.4 of SECURITIES
AND EXCHANGE
BOARD OF INDIA
(DISCLOSURE AND
INVESTOR
PROTECTION)
GUIDELINES, 2000)
Offer for sale
6.3.8.4.1The
requirement of
minimum subscription
shall not be applicable to
offer for sale.
Financial Technologies
(India) Limited is
divesting 5.18%, SBI is
divesting 4.14%, to the
total offer.
25
Disclosure 9: Outstanding Litigation
Litigation of Issuer / Promoter / Promoter Group / Directors of Company
Company to inform the Exchange of the developments with respect to any dispute in
conciliation proceedings, litigation, assessment, adjudication or arbitration to which it is a
party or the outcome of which can reasonably be expected to have a material impact on its
present or future operations or its profitability or financials.
MCX Disclosures
Speciality Restaurant Disclosures
26
Observation from Case Study
1. In Specialty Restaurants, the aggregate amount of the outstanding litigations was
clearly mentioned in summarized form,
2. But in MCX, no doubt the outstanding amounts were mentioned, but they were
mentioned in the description
3. The description ran over in over 15 pages, making it pretty inconvenient to calculating
the total aggregate amount.
Disclosure 10: Pricing MethodThere are two types of IPO pricing methods followed
Fixed Pricing: In the fixed price method, the company, or 'issuer', values the company and
prices the share at a pre-determined price.
Book Building: The issuer sets a price range within which the investor is allowed to bid for
shares. The price is then decided according to demand and supply forces
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.
The Process:
1. The Issuer who is planning an IPO nominates a lead merchant banker as a 'book
runner'.
2. The Issuer specifies the number of securities to be issued and the price band for
orders.
3. The Issuer also appoints syndicate members with whom orders can be placed by the
investors.
4. 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.
5. A Book should remain open for a minimum of 5 days.
27
6. Bids have to be entered within the specified price band
7. Bids can be revised by the bidder before the issue closes.
8. On the close of the book building period the 'book runner evaluates the bids on the
basis of the evaluation criteria which may include –
a. Price Aggression
b. Investor quality
c. Earliness of bids, etc.
9. The book runner and the company conclude the final price at which it is willing to
issue the stock and allocation of securities.
10. Generally, the number of shares are fixed; the issue size gets frozen based on the price
per share discovered through the book building process.
11. Allocation of securities is made to the successful bidders. The rest get refund orders.
12. Book Building is a good concept and represents a capital market which is in the
process of maturing.
Disclosure 11: Green Shoe OptionInvestors buy shares of companies in an initial public offering (IPO) in the hope that the
shares would trade in the secondary market at a price higher than the original selling price.
Investors would certainly be anxious if the price of the shares in the secondary market is
highly volatile in the period immediately following the listing date. Such volatility is
detrimental to investor confidence, to the image of the issuer company and the issue
managers, and to capital markets at large. This necessitates some sort of price stabilization
mechanism. One such price stabilization mechanism is the Green Shoe Option (GSO).
Green Shoe Options (GSOs), or over-allotment options were introduced by the Securities and
Exchange Board of India (SEBI), the Indian market regulator, in 2003 to stabilize the
aftermarket price of shares issued in IPOs.
The green shoe option is a post listing price stabilizing mechanism, by which the company
intends to ensure that the share’s price on the stock exchanges does not fall below the issue
price.
The term “Green shoe Option” derived its name from the company in US which exercised
this mechanism for the first time.
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In a book built issue, the issuer company and the merchant bank solicit indications of interest
from institutional investors in order to construct a demand curve. Book building is a process
of price discovery. The issuer discloses a price band or floor price before the opening of the
issue of the securities offered.
It is at this stage that the issuer company and the merchant bank decide whether to avail of
the GSO. This decision is taken after considering various factors such as the level of
confidence of the issuer company and the merchant bank about the price band determined by
them, the expectation regarding investors’ response, the market sentiment, and so on.
In order to manage the book building process, the issuer company designates one merchant
bank as the book running lead manager (BRLM) or book runner. Once the issue is declared
open, the BRLM accepts bids from investors. On the closing of the issue, the company, in
consultation with the merchant bank, decides the cut off price, or the price at which shares
will be allotted to the investors.
The issue price is not set according to any explicit rule; rather, it is based on the interpretation
of the investors’ indications of interest that is made by the Issuer Company and merchant
bank. The price is set at a level at which demand exceeds supply, and the shares are allocated
to the bidders at this price. Thus, the book building procedure resembles an auction, with
some important differences. The most important difference is that the pricing and allocation
rules are not announced early on, but are left to the discretion of the issuer company and the
merchant bank.
Rationale for including GSOs in IPO Issue:
Investors in an IPO could be anxious about various things: before the allotment of shares,
they are generally anxious whether they will get the shares; after they get the shares, they
worry about how the secondary market will react in the period immediately following the day
of listing.
Will the market open above the issue price or will it open below? If the market price
immediately following the listing day is higher than the issue price, it implies that the issue
price was underestimated, a phenomenon known as underpricing. On the other hand, if the
market price immediately following the listing day is lower than the issue price, it implies
that the issue price was over-estimated, a phenomenon known as overpricing. From the
perspective of an investor, IPO underpricing as well as overpricing are worrisome.
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Underpricing may appear beneficial to those investors who were actually allocated shares in
an IPO. Overpricing, which results in the shares selling at a price lower than the issue price,
may cause panic among the most vulnerable investors, the retail individual investors (RIIs).
The inclusion of GSOs in the IPO issue of an issuer company can be justified on five
grounds: (1) avoiding panic among RIIs, (2) signaling confidence in the IPO price, (3)
protecting the reputation of merchant banks, (4) enhancing liquidity in the aftermarket, and
(5)favoring preferred clients.
(1) Avoiding panic among small investors
Small investors anywhere are likely to panic if the price of the shares they received in an IPO
were to fall immediately after listing. In their panic, they may try to sell their shares at low
prices, and may exit the capital markets altogether in some cases. The price may fall in the
immediate aftermarket because of the activities of flippers. Flippers, also known as stags in
stock market jargon, are investors who bid for shares only to sell them on the listing day,
hoping to make a huge profit in a short period.
In India, the SEBI is in favour of encouraging participation of retail investors in the primary
market for securities. Towards this end, it has taken various measures over the last few years.
The minimum investment limit for RIIs has been raised to INR 2 lakhs. The minimum offer
to public has been hiked to 25% of the issue; in an issue made through the book building
process, a minimum of 35% of the net offer to public category is required to be made to RIIs.
It is in this context that the SEBI introduced GSOs to protect RIIs, and to reassure them that
their interests would be taken care of by the issuer company, the merchant bankers, and the
regulator.
(2) Signaling confidence
The price at which the shares are issued in a book-built IPO is determined in two stages. In
the first stage, the issuer company and the merchant banker decide the price band within
which investors can bid or the floor price above which the investors are required to bid. This
price band or floor price is decided based on various qualitative and quantitative factors. In
the second stage, the issuer company and the merchant bank that are designated as the book
running lead manager (BRLM) decide the issue price after receiving bids from the investors.
Thus, there is a lot of subjectivity in the IPO pricing.
30
Many investors, especially small investors, are usually unable to make up their minds
whether to bid or not to bid for the shares at the stated price band, as they stand to lose if the
price turns out to be unsustainable. In this context, the issuer company and the merchant bank
can signal confidence in the issue by availing of the GSO mechanism. By so doing, the
merchant banks back up their claims of the price being fair by proposing to buy shares from
the secondary market if their claims were to be disproved and the aftermarket price were to
fall below the issue price. By offering price support, the merchant bank signals that the issue
is not overpriced; therefore, investors would be willing to buy at the offer price. Such a signal
is expected to boost the confidence of investors in participating in the primary markets.
(3) Merchant bank reputation
Merchant banks may prevail upon the issuers to avail of GSOs in their IPO issue to retain or
enhance their reputation. Given that the merchant bank plays an important role in arriving at
the price band or the floor price; they risk facing the ire of the investors if the share trades at a
price below the issue price in the immediate aftermarket. Thus, the reputation of a merchant
bank may be affected if an issue managed by them has a bad opening. The market share of
merchant banks (underwriters) fell significantly after the issues managed by them fared
poorly in the aftermarket. Merchant banks can prevent such a loss of reputation by availing of
the GSO mechanism, and trying to prop up the price of the share if it were to fall below the
issue price in the immediate aftermarket.
(4) Liquidity
Investors expect the market to stay liquid and transparent when trading begins in the
secondary market. Liquidity is defined as the ease with which shares can be traded at prices
that reflect the underlying demand and supply conditions. Green shoe options help improve
the liquidity of markets in two ways. Firstly, due to the over-allotment of shares, more shares
would go to the investors than it would have if GSOs were not present. The larger the number
of shares in the hands of the investors, the greater the possibility there these shares will be
traded in the secondary market. Secondly, if the aftermarket prices of the shares were to go
below the issue price during the GSO window period, the stabilizing agent would buy shares
from the market, thereby enhancing liquidity.
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(5) Favoring preferred investors
In some jurisdictions (especially in the US) merchant banks avail of the GSO so that they can
issue shares to some of their preferred clients, who often happen to be institutional investors.
During the planning phase of IPOs, merchant banks go on a road show, meeting institutional
investors and other sophisticated investors, in order to gauge the potential demand for the
IPO and the price at which the shares could be sold. The merchant bank then makes a
favorable allotment to such institutional investors.
The process of GSOs in India:
The GSO process involves the appointment of a merchant bank as a stabilizing agent (SA) by
the issuer company; the SA enters into an agreement with promoters or other pre-issue
shareholders to ‘borrow’ a certain number of shares from them. Pre-issue shareholders are
usually the promoters or other individuals who were already holding shares in the company at
the time of the IPO. The details of such an agreement have to be disclosed in the offer
document. The extent of borrowed shares is restricted to 15% of the issue size.
The issuer company needs to pass a shareholder resolution for availing the GSO, for
appointing a stabilizing agent, and for carrying out the market stabilizing activity in the
aftermarket. The shares borrowed from the pre-issue shareholders are allotted together with
the shares being issued in the IPO; thus, the SA obtains the funds that need to be deposited in
a separate bank account, known as the GSO bank account. In case the market price of the
shares falls below the issue price during the GSO window period, the SA can buy shares from
the market with these funds. The GSO window period refers to 30 calendar days from the
date of listing, during which time the stabilizing activity can be carried out. The shares
bought by the SA are kept in a separate dematerialized account, known as the GSO demat
account. It is implied that the SA would sell the shares that were bought previously, if the
market price rises significantly. In this regard, the SA has full discretion about the quantity,
price, and timing of buying or selling. This stabilizing activity is allowed for a maximum
period of 30 days after listing.
At the end of the stabilization period, the SA would be left with a balance of cash, or shares,
or both. If the aftermarket price did not fall below the issue price, the SA would not have
engaged in any trading activity. In such cases, the SA would be left with cash proceeds from
the over-allotment, which would be handed over to the issuer company. The company would
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then issue fresh shares to the promoters or other pre-issue shareholders from whom the SA
had initially borrowed the shares.
If the aftermarket price of the shares fell below the issue price during the first 30 days after
listing, the SA would buy shares from the market with the cash at its disposal. This activity
would result in the SA having some shares in the GSO demat account, and/or cash. If the SA
is left with the exact number of shares that it had borrowed from the promoters or other pre
issue shareholders, it would return the same to them. However, if the number of shares at the
disposal of the SA is less than the number of borrowed shares, it would pay the issuer
company to allot new shares to fill the shortfall. It is also possible that the SA is left with
more shares than it had borrowed. The SEBI (ICDR) Regulations, 2009 (henceforward
referred to as the SEBI Regulations) are silent about this possibility; it is expected that the SA
would conduct its buying and selling program in a manner that would ensure that such an
eventuality did not occur. If any cash is left with the SA, this has to be transferred to the
Investor Education and Protection Fund (IEPF) set up by the SEBI, after deducting
reasonable expenses incurred by the SA.
A notable feature of the regulation of GSOs in India is the invocation of the doctrine of unjust
enrichment; according to this, neither the issuer company nor the promoters or pre-issue
shareholders can derive any profit from the stabilizing activity. The profits, if any, would be
used for protecting and educating investors. Another notable feature of the regulation of
GSOs in India is that it is optional; it is left to the discretion of the issuer-company.
Apart from GSOs, the SEBI Regulations also contain an enabling provision for issuer
companies to provide for a safety-net arrangement. The idea of a safety net is as follows: if
the shares trade at a price below the issue price in the period immediately following the
listing date, a specially designated entity would buy the shares from the investors. The issuer
company and the merchant bank are required to ascertain the financial capacity of the
designated entity, and make requisite disclosures in the offer document.
The safety-net arrangement is solely intended to protect the interests of small investors. Thus,
the regulations provide that such an arrangement should provide for an offer to purchase up
to a maximum of 1000 shares from the “original resident retail individual allottees at the
issue price within a period of six months from the last date of dispatch of security certificates
or credit of demat account.”
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Disclosure MCX(Company1 ) Speciality
Restaurant(Company 2)
Green shoe option No such contract was
entered into between the
company and the
underwriters.
No such contract was
entered into between the
company and the
underwriters.
Disclosure 12: Underwriting
The procedure by which an underwriter brings a new security issue to the investing public in
an offering is called underwriting. In such a case, the underwriter will guarantee a certain
price for a certain number of securities to the party that is issuing the security (in exchange
for a fee). Thus, the issuer is secure that they will raise a certain minimum from the issue,
while the underwriter bears the risk of the issue.
When a company decides to make an issue of securities to the public through book-building,
the entire net offer should be compulsorily underwritten by the book runner/syndicate
members.
Definition of 'Underwriter'
A company or other entity that administers the public issuance and distribution of securities
from a corporation or other issuing body is an underwriter. An underwriter works closely
with the issuing body to determine the offering price of the securities, buys them from the
issuer and sells them to investors via the underwriter's distribution network.
The word "underwriter" is said to have come from the practice of having each risk-taker write
his or her name under the total amount of risk that he or she was willing to accept at a
specified premium. In a way, this is still true today, as new issues are usually brought to
market by an underwriting syndicate in which each firm takes the responsibility (and risk) of
selling its specific allotment.
34
Underwriters generally receive underwriting fees from their issuing clients, but they also
usually earn profits when selling the underwritten shares to investors. However, underwriters
assume the responsibility of distributing a securities issue to the public. If they can't sell all of
the securities at the specified offering price, they may be forced to sell the securities for less
than they paid for them, or retain the securities themselves.
TYPES OF UNDERWRITING:-
1. Firm Underwriting
Generally, underwriters agree to buy such number of shares or debentures which are
not to be taken up by the public but sometimes, the underwriting agreement provides
that the underwriters will purchase certain shares (as greed upon) themselves. Such an
agreement of outright purchase of securities with the underwriters is called Firm
Underwriting. This liability is in addition to the shares not taken up by the public.
Such an agreement creates confidence in the minds of investing public.
2. Sub-Underwriting/ Partial Underwriting:
In case of large issue, an underwriter does not wish to carry the whole risk on his
shoulders; he may enter into the contract with other underwriters to share the risk.
This contract entered into between the main underwriter and the other underwrites is
called Sub-underwriting and the other underwriters are called Sub-underwriters. The
company is nowhere in the picture. Sub-underwriters are offered a commission
slightly below the underwriting commission.
3. Syndicate Underwriting:
This is an underwriting agreement between the issuing company and 2-3 or more
firms of underwriters to underwriters a large issue. They agree with the company to
share the joint responsibility in an agreed ratio. Some-times, these underwriters to the
contract form a new consortium or syndicate. Such a system is called Syndicate
Underwriting.
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Disclosure 13: Financial Statements
A financial statement (or financial report) is a formal record of the financial activities of a
business, person, or other entity. For a business enterprise, all the relevant financial
information, presented in a structured manner and in a form easy to understand, are called the
financial statements. They typically include four basic financial statements, accompanied by
a management discussion and analysis:
1. Statement of Financial Position: It also referred to as a balance sheet, reports on a
company's assets, liabilities, and ownership equity at a given point in time.
2. Statement of Comprehensive Income: It also referred to as Profit and Loss statement
(or a "P&L"), reports on a company's income, expenses, and profits over a period of
time. A Profit & Loss statement provides information on the operation of the
enterprise. These include sale and the various expenses incurred during the processing
state.
3. Statement of Changes in Equity: It explains the changes of the company's equity
throughout the reporting period
4. Statement of cash flows: It reports on a company's cash flow activities, particularly its
operating, investing and financing activities.
The Prospectus should disclose:
A. As per 6.10.2.7 (d),details of ‘Other Income’ in all cases where such income (net of
related expenses) exceeds 20% of the net profit before tax, including:
(i) The sources and other particulars of such income; and
(ii) An indication as to whether such income is recurring or non-recurring, or has
arisen out of business activities/other than the normal business activities.
B. Profits and losses in accordance with clauses 6.10.2.2 or 6.10.2.3(a), depending on
whether the company has any subsidiaries or not.
Cash Flow Statement (CFS)
36
The cash flow statement is mandatory part of a company’s financial reports. It records the
amounts of cash and cash equivalents entering and leaving a company. The CFS allows
investors to understand how a company’s operations are running, where its money is coming
from and how it is being spent.
The cash flow statement is distinct from the income statement and balance sheet because it
does not include the amount of future incoming and outgoing cash has been recorded on
credit. Therefore, cash is not the same as net income, which, on the income statement and
balance sheet, includes cash sales and sales made on credit.
The Cash Flow Statement is divided into three distinct sections:
(1) Cash Flows from Operating Activities: Here you'll find how much money the
company received from its actual business operations. This does not include cash
received from other sources, such as investments. To calculate the cash flow from
operating activities, the company starts with net income (from the income statement),
then adds back in any depreciation expenses, deferred taxes, accounts payable and
accounts receivables, and one-time charges .
(2) Cash Flows from Investing Activities: This section shows how much money the
company has received (or lost) from its investing activities. It includes money that the
company has made (or lost) by investing its excess cash in different investments
(stocks, bonds, etc), money the company has made (or lost) from buying or selling
subsidiaries, and all the money the company has spent on its physical property, such
as plants and equipment.
(3) Cash Flow from Financing Activities: This is where the company reports the money
that it took in and paid out in order to finance its activities. In other words, it
calculates how much money the company spent or received from its stocks and bonds.
This includes any dividend payments that the company made to its shareholders, any
money that it made by selling new shares of stock to the public, any money it spent
buying back shares of its stock from the public, any money it borrowed, and any
money it used to repay money it had previously borrowed.
Profit and Loss Statement (P & L)
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It is a financial statement that summarizes the revenues, costs and expenses incurred during a
specific period of time - usually a fiscal quarter or year. These records provide information
that shows the ability of a company to generate profit by increasing revenue and reducing
costs. The P&L statement is also known as a "statement of profit and loss", an "income
statement" or an "income and expense statement".
Disclosure MCX(Company1 ) Speciality
Restaurant(Company2)
Other Income
The company has included a
separate annexure briefing in
detail the sources of all such
other income and whether
such income is recurring or
non-recurring in nature.
The company has included
the summary statement of
other income.
However, as the amount of
other income is not
exceeding 20% of the Net
Profit Before Tax, it is not a
necessity for the company to
mention the sources of such
income nor does it have to
mention whether such
income is recurring or non-
recurring in nature.
Disclosure MCX(Company1 ) Speciality
Restaurant(Company2)
Profit and Loss Statement
The company has included
the standalone and
consolidated statements of
its profits and losses.
The company has included
the standalone statements of
its profits and losses.
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Disclosure 14: Risk Factors
The disclosure of the issuer's management to give its view on the Internal and external risks
faced by the company. Here, the company also makes a note on the forward-looking
statements. This information is disclosed in the initial pages of the document and it is also
clearly disclosed in the abridged prospectus. It is generally advised that the investors should
go through all the risk factors of the company before making an investment decision. Risk
factors are an important part of a company’s disclosure documents. They caution potential
and existing investors about specific, material risks that should be considered when making
an investment decision.
Case Study
Multi Commodity Exchange Of India Limited
Internal Risks
1. They are subject to certain risks relating to the operation of an electronic trading
platform and may be unable to keep up with rapid technological changes. Any
failure to keep up with industry standards in technology and respond to participant
preferences could cause their market share to decline, which could have an adverse
effect on their business and operations.
Exchange markets are characterised by rapid technological change, change in usage
patterns, change in client preferences, frequent product and service introductions and the
emergence of new industry standards and practices. These changes could render their
existing technology uncompetitive or obsolete. As all trading on their Exchange is
conducted exclusively on an electronic basis, they are heavily dependent on their
information technology system and the technology they use for their electronic trading
platform.
In the last three fiscals, they have experienced six instances of technical problems during
trading hours. These technical problems were due to issues with, among other things,
their network, hardware and software that caused trading halts ranging between 30
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minutes and 90 minutes, during which their team detected and fixed the error and
restarted the trading system. Any future instances of technical problems may adversely
affect their business and operations.
Increasing the trading volumes on their trading platforms, as well as their ability to
continue to grow their business, will depend, in part, on their ability to:
increase the number of devices, such as trader work stations and other
connectivity devices capable of sending orders to their electronic trading platform;
enhance their existing services and maintain and improve the functionality and
reliability of their electronic platform, in particular, reducing network downtime
or disruptions;
develop or license new technologies that address the increasingly sophisticated
and varied needs of their members;
increase capacity to cope with increasing trading volume on their online platform
during peak trading hours or unusual market volatility;
anticipate and respond to technological advances or service offerings by
competitors and emerging industry practices on a cost-effective and timely basis;
continue to attract and retain highly skilled technology staff to maintain and
develop their existing technology and to adapt to and manage emerging
technologies;
develop new services and technology that address the increasingly sophisticated
and varied needs of their existing and prospective clients; and
respond to failure of systems due to power or telecommunications failure, acts of
God, war or terrorism, human error, natural disasters, fire, sabotage, hardware or
software malfunctions or defects, computer viruses, acts of vandalism or similar
events.
They cannot assure you that they will be able to successfully implement new technologies
or adapt their proprietary technology to their members’ requirements or emerging
industry standards in a timely and cost effective manner, or at all. Any failure to keep up
with industry standards in technology and respond to participant preferences could cause
their market share to decline, which could have an adverse effect on their business and
results of operations.
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2. They could be harmed by employee misconduct or errors that are difficult to detect
and any such incidences could adversely affect their financial condition, results of
operations and reputation.
Employee misconduct or errors could exposethemto business risks or losses, including
regulatory sanctions and serious harm to their reputation. Such employee misconduct
include bindingthemto transactions that exceed authorised limits that present
unacceptable risks to us, hiding unauthorised or unsuccessful activities and improper use
of confidential information. It is not always possible to detect or deter misconduct, and
the precautions they take to prevent and detect such activity may not be effective in all
cases. Their employees and agents may also commit errors that could subjectthemto
claims and proceedings for alleged negligence, as well as regulatory actions in such case,
their business, financial condition, results of operations and reputation could be adversely
affected.
3. Their inability to renew or maintain their statutory and regulatory permissions and
approvals in connection with trading of commodities and operation of their business
would adversely affect their operations and profitability.
They are required to obtain and maintain various statutory and regulatory permissions and
approvals for the trading of commodities on their exchange and operating their business.
In the future, they will be required to renew such permissions and approvals and obtain
new permissions and approvals for trading of commodities. While they believe that they
will be able to renew or obtain such permissions and approvals as and when required,
there can be no assurance that the relevant authorities will issue any such permissions or
approvals in the timeframe anticipated bythemor at all. Failure bythemto renew, maintain
or obtain the required permissions or approvals may result in the interruption of the
trading of commodities and may subsequently have a material adverse effect on their
business, financial condition and results of operations.
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4. They depend on their executive officers and other key personnel, and their business
may be adversely affected if they fail to retain these professionals or attract new
ones.
Their future success depends in large part upon the continued service of their executive
officers, as well as various key management, technical and trading operations personnel.
Some of these individuals have significant experience in the commodities trading industry
and financial services markets and possess skills and understanding of how various
businesses in their industry operate. The loss of service of their executive officers and key
managerial personnel could have an adverse effect on their business, financial condition
and results of operations.
Their future success also depends, in significant part, upon their ability to continue to
recruit and retain highly skilled and specialised individuals as employees. The level of
competition in their industry for people with these skills is intense. If any of their key
personnel or other professionals were to leave, they cannot assure you that they would be
able to replace these key personnel in a timely manner. Significant losses of key
personnel, particularly to their competitors, could have an adverse effect on their
business, financial condition and results of operations.
5. They do not own several properties used by them for their operations. Any
termination of the relevant lease or leave and license agreements in connection with
such properties or their failure to renew those agreements could adversely affect
their operations.
Currently, five of the six properties used by them for their operations are not owned by
them. Further, the lease on one of these five properties is in the process of being renewed.
Any termination of the lease or leave and licenses in connection with such properties
which are not owned by them or their failure to renew the same and upon favourable
conditions, in a timely manner or at all could adversely affect their operations.
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External Risks
1. Their future results of operations are difficult to predict and are subject to
fluctuations caused by various factors beyond their control.
Their results of operations may fluctuate in the future due to a number of factors, many of
which are beyond their control. As such, their results of operations during any fiscal and
from period to period are difficult to predict and their historical results of operations in
any particular period may not be an indication of their future performance. Their business
and results of operations may be affected by the following factors:
real and perceived supply and demand imbalances in the underlying commodities
economic downturns or stagnant economic growth in Indian and global markets
a decrease in demand for commodities and futures in the Indian and global
markets
an increase in prevailing interest rates in India
competition from global and Indian commodity exchanges
fluctuations in the value of and returns from investment instruments in which they
invest their surplus cash and funds
changes in government policies affecting the commodities and futures industry in
India; and
accidents or natural disasters
Due to the above factors, you should not rely on past performance to predict their future
performance. An occurrence of any of the above factors may adversely affect their
business and results of operations, which may vary significantly from the expectations of
their shareholders, market analysts and the investing public.
2. They are subject to risks arising from exchange rate fluctuations.
While most of their expenditure, as well as their accounts as a whole, are denominated in
Indian Rupees some of their expenditures are denominated in foreign currencies. As a
result, fluctuations in foreign exchange rates, in particular the exchange rate of U.S.
Dollars for Indian Rupees, may affect their results of operation. They do not currently
hedge their foreign currency exchange rate exposure.
Speciality Restaurants Limited
43
Internal Risks
1. Their ability to maintain their competitive position and to implement their business
strategy is dependent to a significant extent on their senior management team and
other key personnel.
They depend on their current senior management for the implementation of their strategy
and the operation of their day-to-day activities. Furthermore, relationships of members of
senior management are important to the conduct of their business. Competition for
experienced management personnel in the fine dining sector is intense, the pool of
qualified candidates is limited, and they may not be able to retain the services of their
senior executives or key personnel or attract and retain high-quality senior executives or
key personnel in the future. Consequently, there can be no assurance that these
individuals will continue to make their services available to them in the future. Any
significant loss of senior management or key personnel could materially and adversely
affect their business, financial condition, results of operations and prospects.
In addition, if any member of their senior management team or any of their other key
personnel joins a competitor or forms a competing company, they may consequently lose
their proprietary know-how including pricing of their menu items, new restaurant
launches and pricing relating to the procurement of raw material. Their key management
personnel have entered into confidentiality and/or non-competition agreements with us.
However, if any disputes arise between any of their key management personnel and us, it
may be difficult for them to enforce these agreements.
2. General and industry-specific economic fluctuations could adversely affect their
business, financial condition, results of operations and prospects.
Their business, financial condition, results of operations and prospects depend on a
variety of general economic and industry-specific factors. The fine dining sector of the
restaurant industry is highly fragmented and competitive and is affected by changes in
national, regional and local economic conditions, consumer credit, taxation,
unemployment and changing demographic trends. In the second half of 2007, they
experienced a slowdown due to the downturn experienced by global financial markets in
that period which continued and substantially increased in 2008 and continued to some
44
extent in the first half of 2009. In the second half of 2011, they again experienced a
slowdown due to the domestic economic conditions in India and tightened credit
conditions experienced globally as a result of the Eurozone debt crisis. In periods of
economic uncertainty, consumers tend to decrease their discretionary, restaurant
spending, which may materially and adversely affect their business, financial condition,
results of operations and prospects.
The performance of individual restaurants may also be adversely affected by factors such
as changing guest traffic patterns and the establishment of nearby competing restaurants.
In response to such developments, they may need to increase their marketing efforts,
adjust their pricing or take other actions, which may adversely affect their results of
operations. These factors are generally beyond their control, and their ability to manage
the risks they present is important to their operations. Reduced guest traffic in their
restaurants for any reason, increased costs of doing business or reduced prices for their
products as a result of these or other considerations could adversely affect their business,
financial condition, results of operations and prospects.
3. Their agreement with Pepsi Foods Private Limited has expired, and any failure to
enter into a new agreement may have an adverse impact on their business, results of
operations and financial condition.
Their agreement with Pepsi Foods Private Limited (“Pepsi”) under which their Company
had agreed to purchase and Pepsi had agreed to provide Pepsi beverages as their preferred
cold beverage supplier at their restaurants during the term of the agreement expired on
March 31, 2012. Under this agreement, Pepsi paid a specified amount to them annually
for the purpose of carrying out joint marketing and promotional activities. A new
agreement with Pepsi is currently under negotiation. If they are unable to enter into a new
agreement with Pepsi, they may continue to incur a higher cost in relation to beverages
sold as well as a decrease in their marketing budget which may have an adverse impact on
their results of operations and financial condition.
4. Their inability to identify, open and operate new restaurant locations profitably may
adversely affect their business.
45
Identifying and securing the best restaurant locations is essential to their business. Good
location is generally one of the most important elements for restaurant success. Their
business development strategy depends in part on their ability to assess locations and
successfully open restaurants in new and existing markets. Desirable locations may be
limited for many reasons, including the general lack of prime real estate in the markets in
which they compete and restrictions in some of these markets on the use of certain
locations for restaurants. As a result, desirable locations for new restaurants or for the
relocation of existing restaurants may not be available at an acceptable cost or on
acceptable terms or at all. Further, they may not correctly identify prime locations that
can support the restaurants they open. For example, in April 2011, they closed a Mainland
China restaurant in Delhi because it was located in a mall that was not receiving high
guest traffic. Certain additional factors, some of which are beyond their control, that
could adversely affect their new restaurants include the availability of adequate financing
and fit-out costs.
In addition, they have in the past and may in the future experience delays or higher-than-
anticipated costs in opening new restaurants. They may also experience delays or fail to
obtain required government approvals or licenses and permits to operate their corporate
restaurants. Any such delays or failures to obtain relevant government approvals and/or
licenses and permits can have an adverse impact on their revenues, as they may start
incurring lease costs when they run past their fit out period under the terms of their lease
agreements. They may also start incurring significant employee-related expenses, as they
typically relocate their restaurant management and staff to new restaurants three months
in advance of a new restaurant opening.
They depend in large part on their ability to operate new restaurants on a profitable basis.
They typically incur a significant amount of start-up costs including architecture and
design fees and construction costs. Any cost escalations can lead to an increase in their
capital expenditure and delay their breakeven period. They cannot guarantee that they can
recoup their costs and operate new restaurants profitably in the short-term or at all.
Furthermore, they cannot guarantee that any new restaurant they open will obtain
operating results similar to those of their existing restaurants. In addition, if they open
new restaurants in their existing geographic locations, the sales performance and guest
traffic of their existing restaurants near new restaurants may decline as a result or the new
restaurants may not yield the desired results. This may in turn, adversely affect their
46
ability to achieve the anticipated growth in revenue and profitability of their entire
restaurant business.
5. Outbreaks of disease affecting their supply chain could adversely affect their
business, financial condition, results of operations and prospects.
Outbreaks of disease affecting their supplies of poultry and fish products could
significantly affect their ability to purchase such commodities, their operations and their
costs of doing business. Among the diseases that could affect their supplies are highly
contagious diseases that may spread rapidly through countries and regions. Even in
countries with high veterinary standards, pigs sometimes contract foot and mouth disease
and cattle “mad cow disease” (bovine spongiform encephalopathy).
In addition, avian influenza is a highly contagious viral disease that affects poultry and
that has since 2005 spread rapidly in Asia. They select poultry suppliers who monitor
their supply for the presence of avian influenza and other diseases. They also perform
independent tests when there is a high risk of infection in the regions in which their
suppliers operate, when they change providers (or their providers change production
facilities) or in case of any guest complaints. Although avian influenza has not been
detected in the production facilities of any of their suppliers, there can be no guarantee
that it will not affect their suppliers in the future, and there can be no assurance that avian
influenza will not spread within India, including the regions in which their suppliers’
production facilities are located. If their third-party suppliers’ poultry populations were to
be infected, they may not be able to locate additional suppliers of poultry products or may
be able to obtain poultry only at greatly increased prices that could adversely affect their
results of operations.
Any outbreak of disease affecting their supply chain, or even one that does not affect their
suppliers, may also create adverse publicity regarding their products, resulting in
declining demand. Because they depend on third-party suppliers for these commodities,
the risk of purchasing affected products is largely beyond their control. As a result of
these and other factors, any outbreak of disease, or the possibility of an outbreak of
disease, affecting their supply chain could adversely affect their business, financial
condition, results of operations and prospects.
47
6. Their use of imported foodstuffs and equipment exposes them to the risk of the
imposition or increase of tariffs, duties, quotas and other limitations on imported
foodstuffs.
They depend to a certain extent on ingredients and equipment that are imported from
China by local third party suppliers in Mumbai from whom they purchase such
ingredients and equipment. They may in future, directly import certain ingredients or
additional items from China or other countries. India has in place import quotas and
tariffs on food products imported from China, which generally increases prices for
imported products. They have no control over the imposition of such measures and such
restrictions may increase in the future, thereby increasing the costs of these commodities
and negatively affecting their results of operations.
In addition, Indian authorities may ban imports of foodstuffs into India, as a result of
health or other considerations. These and other measures that reduce the supply of
imported foodstuffs available on global markets, or the supply available in India, may
cause prices for certain of their ingredients to increase, thereby increasing their costs. To
the extent that they are not able to increase the price of the products sold in their
restaurants without negatively affecting demand or to adjust their menu offerings to
compensate for higher costs of ingredients, the imposition or continuation of such
measures could adversely affect their business, financial condition, results of operations
and prospects.
7. They face risks associated with the expansion of their business in Indian cities and
other locations as well as into new restaurant formats.
They currently plan to expand their operations in new locations in existing as well as new
Metros and Tier I cities, and opportunistically, in Tier II cities in India. They may also
opportunistically expand in certain international locations. These locations and cities will
be new operating environments for us, located, in some instances, a great distance from
their Mumbai headquarters. Although they seek to supervise these operations by use of
their management teams in certain designated hub cities in which they operate that are
relatively nearby, they may have less control over their activities and these businesses
may face more uncertainties with respect to their operational needs. In future, they may
launch new restaurant formats and develop additional brands to cater to different
48
segments of the population. For example, they are in the process of developing an all day
Italian cafe concept to cater to the 18 – 30 age groups. They do not have substantial
experience in such new restaurant concepts and brands. They may face challenges
resulting in substantially greater costs as compared to their existing restaurants, restaurant
formats and brands when entering new markets or new restaurant concepts and brands,
such challenges include identifying and hiring experienced personnel, selecting and
securing the best restaurant locations in light of the local real estate market and obtaining
relevant regulatory approvals. They may face problems in establishing a reliable supply
chain and raw materials may be available only at higher-than-anticipated costs, if at all. In
addition, they may face additional challenges due to the unfamiliarity of consumers in the
new markets or new restaurant concepts and brands, with their brands and, in some cases,
their cuisines. They may also face competition from existing restaurant operators already
established in these new locations and cities, and they may be able to respond more
promptly to changes in guest needs and preferences. New markets or new restaurant
concepts and brands may also have different competitive conditions, consumer tastes and
discretionary spending patterns than their existing markets or their existing restaurant
concepts and brands.
External Risks
1. A slowdown in economic growth in India could cause their business to suffer.
Their performance and the growth of their business are necessarily dependent on the
health of the overall Indian economy. As a result, any slowdown in the Indian economy
could adversely affect their business. India’s economy could be adversely affected by a
general rise in interest rates, inflation, natural calamities, such as earthquakes, tsunamis,
floods and drought, increases in commodity and energy prices, and protectionist efforts in
other countries or various other factors. In addition, the Indian economy is in a state of
transition. It is difficult to gauge the impact of these fundamental economic changes on
their business. Any slowdown in the Indian economy could adversely affect their
business, results of operations, financial condition and prospects.
2. Their ability to raise foreign capital may be constrained by Indian law.
49
As an Indian company, they are subject to exchange controls that regulate borrowing in
foreign currencies. Such regulatory restrictions limit their financing sources for their
business operations or acquisitions and other strategic transactions, and consequently
could constrain their ability to obtain financings on competitive terms and refinance
existing indebtedness. In addition, they cannot assure you that the required approvals will
be granted tothemwithout onerous conditions, or at all.
3. Regional hostilities, terrorist attacks or social unrest in India and South Asia or
other countries, could adversely affect the financial markets and the trading price of
the Equity Shares could decrease.
Terrorist attacks and other acts of violence or war including those involving India, the
United States or other countries, may adversely affect the Indian and worldwide financial
markets. On November 26, 2008, terrorists staged a coordinated attack on several
prominent international hotels and various other locations in the financial centre of
Mumbai. Such terrorist acts may result in a loss of business confidence and have other
consequences that could adversely affect their business, results of operations, financial
condition and prospects. Increased volatility in the financial markets, including economic
recession, can have an adverse impact on the economies of India and other countries.
In addition, South Asia has from time to time experienced instances of civil unrest and
hostilities among neighbouring countries. Present relations between India and certain of
its neighbouring countries continue to be fragile because of issues such as terrorism,
armament and other political and social matters. Increased tensions and hostilities may
occur in the future and on a wider scale. Events of this nature in the future, as well as
social and civil unrest within other countries in Asia, could influence the Indian economy
by disrupting communications and making travel and transportation more difficult.
India has also experienced social unrest, communal disturbances and riots in some parts
of the country during recent times. Such political and social tensions could create a
perception that investments in Indian companies involve greater degrees of risk. These
hostilities and tensions could lead to political or economic instability in India and a
possible adverse affect on the Indian economy, their business, future financial
performance and the trading price of the Equity Shares.
50
Disclosure 15: Management and Other Disclosures
i. Board of Directors.
ii. Compensation of Managing Directors/ Whole time Directors.
iii. Compliance with Corporate Governance requirements.
iv. Shareholding of Directors, including details of qualification shares held by them.
v. Interest of the Directors.
vi. Change, if any, in the directors in last three years and reasons thereof, wherever
applicable.
vii. Management Organisation Structure.
viii. Details regarding Key Management Personnel.
ix. Employees.
x. Disclosures regarding employees stock option scheme/ employees stock purchase
scheme of the issuer company, if any, as required by the Guidelines or Regulations of
the Board relating to Employee Stock Option Scheme and Employee Stock Purchase
Scheme.
xi. Payment or Benefit to Officers of the Company (non-salary related).
Promoters/ Principal Shareholders:
i. Details about promoters who are individuals
ii. Details about promoters which are companies
iii. Common pursuits
iv. Interest of promoters
v. Payment or benefit to promoters of the issuer company
vi. Related party transactions as per the Financial Statements
Case Study
Multi Commodity Exchange Of India Limited
Shareholding of Directors:
51
Their Articles do not require their Directors to hold any qualification shares in the Company.
The following is the shareholding of the Directors in the Company as of the date of this Red
Herring Prospectus:
Sr. No Name of Director Number of Equity Shares
1. Venkat Chary 12,500
2. V. Hariharan 541,032
3. Joseph Massey 31,250
4. Lambertus Rutten 8,750
5. P.G. Kakodkar 1,875
6. Paras Ajmera 540,529
7. C. M. Maniar 1,250
8. Shvetal S. Vakil 1,250
Changes in Board of Directors in the last three years:
Name Date of
App./
Change/
Cessation
Reason for the Change
K. Venugopal Jan 10, 2012 Appointment as a nominee of SBI
B.Sriram Jan 10, 2012 Cessation due to withdrawal of nomination by SBI
P. Satish Dec 28, 2011 Appointment as a nominee of NABARD
S. Balan Dec 28, 2011 Cessation due to withdrawal of nomination by
NABARD
Usha Suresh Feb 14, 2011 Appointment as nominee of FMC
Anupam
Mishra
Feb 7, 2011 Cessation due to withdrawal of nomination by FMC
Ashima Goyal May 29, 2010 Appointment as nominee of FMC
K.T. Chacko May 29, 2010 Appointment as nominee of FMC
B. Sriram April 22,
2010
Appointment as nominee of the SBI
Anup Banerji April 22, Cessation due to withdrawal of nomination by SBI
52
2010
Ajit Ranade April 1, 2010 Cessation due to expiry of term of nomination by the
FMC
Prakash Apte April 1, 2010 Cessation due to expiry of term of nomination by the
FMC
S. Balan Sept 4, 2009 Appointment as nominee of NABARD
P. Satish Sept 4, 2009 Cessation due to withdrawal of nomination by
NABARD
R.M.
Premkumar
Aug 10, 2009 Appointment as nominee of FMC
Lambertus
Rutten
July 1, 2009 Change in designation as Managing Director and CEO
Joseph Massey July 1, 2009 Change in designation as Non- Executive Director
P. Satish May 20, 2009 Appointment as nominee of NABARD
R.
Balakrishnan
May 20, 2009 Cessation due to withdrawal of nomination by
NABARD
S. Narayan April 1, 2009 Cessation
Asha Das April 1, 2009 Cessation due to expiry of term of nomination by the
FMC
Speciality Restaurants Limited
Shareholding of Directors:
The shareholding of our Directors as of the date of filing this Prospectus is set forth below:
Name of Director Number of Equity Shares held
Anjan Chatterjee 16,529,905
Suchhanda Chatterjee 11,970,000
Indranil Ananda Chatterjee 19
Susim Mukul Datta Nil
Tara Sankar Bhattacharya Nil
Jyotin Mehta Nil
53
Dushyant Rajnikant Mehta Nil
Vishal Satinder Sood Nil
Changes in Board of Directors in the last three years:
Name Date of Appointment/
Change/ Cessation
Reason
Phiroz Savak Sadri August 18, 2009 Resignation
Dushyant Rajnikant Mehta August 18, 2009 Appointment
Ravi Chandra Adusumalli December 17, 2009 Resignation
Vishal Satinder Sood December 17, 2009 Appointment
Jayanta Chatterjee February 9, 2011 Resignation
Rajesh Dubey February 9, 2011 Resignation
Biswajit Mukhopadhyay February 9, 2011 Resignation
Indraneil Palit February 9, 2011 Resignation
Jyotin Mehta February 9, 2011 Appointment
Tara Sankar Bhattacharya February 9, 2011 Appointment
Susim Mukul Datta February 9, 2011 Appointment
Disclosure 16 : Dividend Policy:
The company needs to disclose its dividend policies. Following disclosures are expected:
1. Dividend policy of the Company
2. Rate of Dividend and Amount of Dividend paid for the last five financial years :
3. Information about changes, if any, in dividends announced and dividends paid and time gap between the dividends announced and dividends paid.
4. Information about Dividend Yield.
54
5. Taxation aspects of dividend distribution.
MCX:
MCX has paid dividends in past and hence has made the data regarding history of dividends available. The data is as follows:
Fiscal 2007 2008 2009 2010 2011
Face value of Equity Share
(per share) 10 5 5 5 10
Dividend on Equity Shares
(in Rs million) 857.64 234.62 205.29 203.99 254.99
Dividend rate (%) 220% 60% 50% 50% 50%
Dividend tax (in Rs million) 120.27 39.87 34.89 33.88 41.37
However, the amounts paid as dividends in the past are not necessarily indicative of our dividend amounts, if any payable or to be paid, or our dividend policy, in the future.
Speciality Restaurants:
Following were disclosures from Speciality Restaurents:
The declaration and payment of dividends will be recommended by our Board of Directors and approved by our shareholders, in their discretion, subject to the provisions of the Articles of Association of our Company and the Companies Act.
The dividend, if any, will depend on a number of factors, including but not limited to the earnings, capital requirements contractual restrictions and overall financial position of our Company. In addition, our ability to pay dividends may be impacted
55
by a number of factors, including restrictive covenants under the loan or financing arrangements we may enter into.
Our Company has no stated dividend policy and has not paid any dividend in the last five years.
PROPOSED CHANGES BY SEBI IN IPO PROCESS:Some of the major decisions likely to be approved by the SEBI board at its August 16
meeting are:
1. Halving the bidding period for public offerings to five days. So that the process
completes faster.
2. Making the object clause of prospectuses of issuing companies more specific.
In a book-build issue, general corporate expenses will not exceed 20% of the
estimated issue size. At present, issuers keep a large amount under general corporate
expenses to keep the issue size ambiguous. In case the issuer adds or deletes to the
object clause that changes the issue size by 20%, SEBI may ask the issuer to re-file
the draft RHP.
3. The regulator is planning to allow investors to apply for IPOs and FPOs online
ie. electronically, and use credit and debit cards for e-payment of application money.
4. The minimum application size for all investors is proposed to be increased to
INR 15,000. By doing so, SEBI intends to gratify more number of smaller applicants
in cases of oversubscribed issues. This would also ensure wider participation of retail
public in the primary market thereby improving liquidity of the stock.
5. ‘Safety net mechanism’ can be implemented where a certain portion of the
investment made by retail shareholders in the IPOs could be guaranteed for a fixed
period, which could be for six months, even if the shares’ value plunge below the IPO
allotment price during this time. Small retail investors would be compensated by the
promoters and other entities selling shares through IPOs in the event of the company’s
shares plunging below a certain threshold limit within six months of listing or the time
frame set by SEBI.
6. Tighter guidelines for large companies that don't have a track record of making
profits. Such companies, which seek to issue IPOs, will now sell a minimum of 75%
56
of the issue to qualified institutional bidders (Previously it was 50%). 15% shall be
allocated to non-institutional investors and 10% to retail investors.
7. The market regulator is also planning to send a strong signal to Indian
promoters to price issues conservatively. In case a new issue trades at 20% below
the offer price for three months, the promoters (not the company) will have to
mandatorily buy 5% of the issue size from original allotees whose application amount
is not more than Rs 50,000.
BIBLIOGRAPHY
WEBSITES:
o Sebi.gov.in
o Bse india.com
DOCUMENTS:
o Multi Commodity Exchange Of India Limited – Red Herring Propspectus
o Speciality Restaurants Limited - Prospectus
o Securities and Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000
57