Page 136 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 7: Depositories and Custodians

There will be proportionate allocation if it is over subscribed. Notes
Minimum bid amount for NIB's exceeds 1,00,000 and in multiple there after.
Maximum bid size not exceeding the size of the issue subject to regulators as applicable to
the bidder.
Amount applicable by Non-Institutional bidder at the time of submission of Bid cum
application form: Full bid amount to be paid on bidding.
3. Retail Individual Investors: Individuals (including HUFs in the name of karta) applying
for equity shares such that the Bid amount per Retail individual Bidders does not exceed
` 1,00,000 in value.
At least 30% of the Net issue is available for allocation.

The unsubscribed portion in this category will available for allocations to QIB's and non-
institutional Bidder.
There will be proportionate allocation if it is oversubscribes.

Minimum bid amount for RIB's in multiple of equity shares.
Maximum bid should not exceed ` 1,00,000.
Payment of amount applicable to Retail individual Bidder at the time of submission of Bid
cum Application form depending upon the payment method.

Additionally there can be Reservations for:
(i) Employees/Directors of the issues/promoter companies.
(ii) Existing shareholders of the issuer/promoter companies.

Price Band and Cut-Off Price

The investors are informed of the price band for bidding. The lower end of the price band is the
floor price and the upper end of the price band is the cap price. The cap price is the price band
should not be more than 20% of the floor price.
The investor can opt to bid at any price of the prices (including the floor price and ceiling price) in
multiplies of ` 1/- within the price band. The issuer in consultation with BRLM's (Book Running
Lead Manager) can revise the price band (upward or downward) during the period the bid is open
subject to keeping the bidding period open for a minimum of three days after the revision.
Retail individual bidders can bid at "cut-off" price. In which case, they need not indicate the price
as the specific number and yet become eligible to be considered for allotment irrespective of the
issue price finally decided through the price discovery process. They must pay the margin
amount calculated at the ceiling price. The other categories of investors are forbidden from
applying at cut-off price.
For example: Company name is Reliance Petroleum Limited
The price band is ` 57/- to ` 62/-
Cut-off price is ` 16/- for partly paid case

Cut-off price is ` 62/- for fully paid case
Benchmarks are pre-determined for each fund based on the most appropriate indices available
in the market or by constructing proxy benchmarks out of multiple indices. Performance of each
fund is continuously tracked based on the benchmarks and recalibrated.

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