Page 85 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Indian Financial System

Notes action, as prescribed under its bylaws, would be initiated against him. In such a case, if the
minimum subscription as disclosed in the prospectus is not received, the issue proceeds would
be refunded to the applicants.
The subscriber should have an option to receive the security certificates or hold the securities in
dematerialized form as specified in the SEBI guidelines.

The exchange concerned should not use the Settlement/Trade Guarantee Fund of the exchange
for honouring the brokers' commitment in case of failure of a broker to bring in funds.
On payment and receipt of the sum payable on applicants for the amount towards minimum
subscription, the company should allot the shares to the applicants as per these guidelines. The
registrar to the issue should post the share certificate to the investors or, instruct the depository
to credit the depository account of each investor. The allotment of securities should be made not
later than 15 days from the closure of the issue, failing which interest at 15 per cent would be
paid to the investors.
The cases of applicants who have applied, directly or by post, to the registrar to the issue and
have not received allocation, he (the registrar) should arrange to refund the application monies
paid by them within the time prescribed.
The brokers and other intermediaries engaged in the process of offering shares through the
online system should maintain the following records for a period of five years: (i) orders
received, (ii) applications received, (iii) details of allocation and allotment, (iv) details of margin
collected and refunded, and (v) details of refund of application money.

Notes The SEBI would have the right to carry out an inspection of the records, books and
documents relating to the above, of any intermediary connected with the system and
every intermediary in the system should at all times cooperate with the inspection. In
addition, the stock exchange(s) has/have the right of supervision and inspection of the
activities of its connected member brokers.

5.3.7 Book-Building

Book-building means a process 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. A company proposing
to issue capital through book-building has to comply with the requirements as given in the
following pages:
75 Per cent Book-building Process

In an issue of securities to the public through a prospectus, the option for 75 per cent book-
building is available subject to the following:
1. The option of book building is available to all body corporates that are otherwise eligible
to make an issue of capital to the public as an alternative to, and to the extend of, the
percentage of the issue, which can be reserved for firm allotment. The issuer company can
either reserve the securities for firm allotment or issue them through the book-building
process. The issue of securities through the book-building process should be separately
identified/indicated as 'placement portion category', in the prospectus. The securities
available to the public should be separately identified as "net offer to the public". The

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