Page 89 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Indian Financial System

Notes the mandatory collection centres as per the relevant SEBI guidelines. The bidding terminals
should contain an online graphical display of demand/bid prices updated at periodic intervals
not exceeding 30 minutes. The lead manager should ensure the availability of adequate
infrastructure with syndicate members for data entry of the bids in a timely manner. The investors
who had not participated in the bidding process or have not received information of entitlement
of securities may also apply.

Additional Disclosures

Apart from meeting the disclosure requirements as specified in the guidelines discussed earlier,
the following disclosures should also be suitably made:
1. The particulars of syndicate members, brokers, SCSBs, registrars, bankers to the issue and
so

The following statement under the "basis for issue price":
(i) "The issue price has been determined by the issuer in constitution with the book
runner(s),

(ii) the basis of the assessment of market demand for the offered securities by way of
building".
2. The following accounting ratios should be given under the basis for issue price for each of
accounting periods for which the financial information is given:
(i) EPS, pre-issue for the last 3 years (as adjusted for changes in capital),
(ii) P/E pre-issue

(iii) Average return on net worth in the last 3 years,
(iv) Net asset value per share based on last balance sheet,
(v) Comparison of all the above accounting ratios of the issuer company with industry
average and those of the peer group, that is, companies of comparable size in the
industry. The source from which industry average and accounting ratios of the peer
has been taken should also be indicated.
(vi) The accounting ratios disclosed in the offer document should be calculated after
effect to the consequent increase of capital on account of compulsory conversions
standing, as well as on the assumption that the options outstanding to subscribe for
additional capital would be exercised.

3. The proposed manner of allocation among respective categories of investors in the event
of under-subscription.

Task How is price determined under this method?

5.3.8 Green Shoe Option

A Company making an initial public offer of equity shares can avail of the Green Shoe Option
(GSO) for stabilizing the post-listing price of its shares. The GSO means an option of allocation
of shares in excess of the shares included in the public issue and operating a post-listing price
stabilizing mechanism through a Stabilizing Agent (SA). The concerned issuing company should
seek authorization for the possibility. If allotment of further issues to the SA at the end of the

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