The document discusses initial public offerings (IPOs) as a way for unlisted companies to raise funds by launching initial shares to the public. Key aspects of an IPO discussed include the prospectus, which provides an overview of the company, strategies, stakeholder information, intended use of funds, and financial statements. The document also covers the types of capital markets and IPO process, as well as regulations around IPOs in India. A true/false quiz is included testing knowledge of various financial terms and concepts related to public companies.

1. Lecture 4- 5th
August 2020
Discussion
Fund Raising
● IPO or Initial Public Offering is the process by which unlisted companies
launch initial shares of their company to the public in order to raise funds.
● IPO is always a glamorous investment option, as it generally yields very high
returns, but it should be a long term investment.
● The most important document the company and the investment bankers
must produce to make an IPO happen is the prospectus.
● Prospectus include: Company overview and background, Description of the
fund's strategies, Promoter’s Stake, Utilization of Funds, the fund's fee
structure, Financial statements, Financial Ratio, Key Risk Concern, Future
Projection.
● Capital Market types:
● History of Capital Market.
● Journey of IPO.

2. ● Issue of Capital & Disclosure Requirement Regulation (ICDR)-2009.
Surprise Test (True/False)
1. Sweat Equity shares and ESOPs are different. True
2. Preference Share carry a fixed rate of Interest. False
3. Declaration of Dividend is not compulsory. True
4. All the litigation have to be shown as contingent liabilities in the financial
statement. False
5. Free Reserves can be distributed to shareholders in cash. False
6. Transfer of shares between two person is a primary issue. False
7. Interest on Debenture can be paid only when there are profits. False
8. Holding Company means- holding more than 75% of the shareholding in
another company. False
9. Consolidated Financial Statement have to be prepared by companies having
subsidiaries. True
10.There is minimum educational qualification to become Director of a
Company. False
11.Warrants are Contingent Liabilities. False
12.OFCD forms part of the capital of the company. False
13.A company can source funds through Fixed Deposits. True
14.Reliance Industries Ltd is a public sector company. False
● Price and Value difference: Price is the Market Value and Value is the
Intransic Value.
● Offer for Sale: Wherein promoters in public companies can sell their
shares and reduce their holdings in a transparent manner through
the bidding platform for the Exchange.
● Types of Investors:

3. ● Entry Norm
Entry
Norm 1
Profitability Retail-35% Institutional
buyer- 50%
Non
Institutional
Investor-15
%
Entry
Norm 2
QIB Retail- 10% Institutional
buyer- 75%
Non
Institutional
Investor-15
%
● Minimum Subscription of IPO : 90% of Issue
● Soft Underwriting: when an underwriter agrees to buy the shares at
later stages as soon as the pricing process is complete.

4. Next Session – Discussion on Happiest Mind IPO.
Submitted by- Sachi Jain