SEBI Guidelines for IPOs , , , .... , .... , ............

1. IPOs of small companies Public issue of less than five crores has to be through OTCEI and separate guidelines apply for floating and listing of these issues.

(Public Offer By Small Unlisted Companies)

2. Size of the Public Issue Issue of shares to general public cannot be less than 25% of the total issue, incase of information technology, media and telecommunication sectors this stipulation is reduced subject to the conditions that:

Offer to the public is not less than 10% of the securities issued.

A minimum number of 20 lakh securities is offered to the public and

Size of the net offer to the public is not less than Rs. 30 crores.

3. Promoter Contribution

Promoters should bring in their contribution including premium fully before the issue

Minimum Promoters contribution is 20-25% of the public issue.

Minimum Lock in period for promoters contribution is five years

Minimum lock in period for firm allotments is three years.

4. Collection centers for receiving applications

There should be at least 30 mandatory collection centers, which should include invariably the places where stock exchanges have been established.

For issues not exceeding Rs.10 crores (including premium, if any), the collection centres shall be situated at:-

o the four metropolitan centres viz. Bombay, Delhi, Calcutta, Madras; and o at all such centres where stock exchanges are located in the region in which the registered office of the company is situated.

5. Regarding allotment of shares

Net Offer to the General Public has to be at least 25% of the Total Issue Size for listing on a Stock exchange.

It is mandatory for a company to get its shares listed at the regional stock exchange where the registered office of the issuer is located.

In an Issue of more than Rs. 25 crores the issuer is allowed to place the whole issue by book-building

Minimum of 50% of the Net offer to the Public has to be reserved for Investors applying for less than 1000 shares.

There should be atleast 5 investors for every 1 lakh of equity offered (not applicable to infrastructure companies).

Quoting of Permanent Account Number or GIR No. in application for allotment of securities is compulsory where monetary value of Investment is Rs.50,000/- or

above.

Indian development financial institutions and Mutual Fund can be allotted securities upto 75% of the Issue Amount.

A Venture Capital Fund shall not be entitled to get its securities listed on any stock exchange till the expiry of 3 years from the date of issuance of securities.

Allotment to categories of FIIs and NRIs/OCBs is upto a maximum of 24%, which can be further extended to 30% by an application to the RBI - supported by a resolution passed in the General Meeting.

6. Timeframes for the Issue and Post- Issue formalities

The minimum period for which a public issue has to be kept open is 3 working days and the maximum for which it can be kept open is 10 working days. The minimum period for a rights issue is 15 working days and the maximum is 60 working days.

A public issue is effected if the issue is able to procure 90% of the Total issue size within 60 days from the date of earliest closure of the Public Issue. In case of oversubscription the company may have the right to retain the excess application money and allot shares more than the proposed issue, which is referred to as the greenshoe option.

A rights issue has to procure 90% subscription in 60 days of the opening of the issue.

Allotment has to be made within 30 days of the closure of the Public Issue and 42 days in case of a Rights issue.

All the listing formalities for a public Issue has to be completed within 70 days from the date of closure of the subscription list.

7. Despatch of Refund Orders

Refund orders have to be dispatched within 30 days of the closure of the Public Issue.

Refunds of excess application money i.e. for un-allotted shares have to be made within 30 days of the closure of the Public Issue.

8. Other regulations pertaining to IPO

Underwriting is not mandatory but 90% subscription is mandatory for each issue of capital to public unless it is disinvestment in which case it is not applicable.

If the issue is undersubscribed then the collected amount should be returned back (not valid for disinvestment issues).

If the issue size is more than Rs. 500 crores voluntary disclosures should be made regarding the deployment of the funds and an adequate monitoring mechanism to be put in place to ensure compliance.

There should not be any outstanding warrants or financial instruments of any other nature, at the time of initial public offer.

In the event of the initial public offer being at a premium, and if the rights under warrants or other instruments have been exercised within the twelve months prior to such offer, the resultant shares will not be taken into account for reckoning the minimum promoter's contribution and further, the same will also be subject to lockin.

Code of advertisement specified by SEBI should be adhered to.

Draft prospectus submitted to SEBI should also be submitted simultaneously to all stock exchanges where it is proposed to be listed.

9. Restrictions on other allotments

Firm allotments to mutual funds, FIIs and employees not subject to any lock-in period.

Within twelve months of the public/rights issue no bonus issue should be made.

Maximum percentage of shares, which can be distributed to employees cannot be more than 5% and maximum shares to be allotted to each employee cannot be more than 200.

10. Relaxations to public issues by infrastructure companies. 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.

The infrastructure companies will be exempted from the requirement of making a minimum public offer of 25 per cent of its securities.

The requirement of 5 shareholders per Rs. 1 lakh of offer is also waived in case of offerings by infrastructure companies.

For public issues by infrastructure companies, minimum subscription of 90% would no longer be mandatory provided disclosure is made about the alternate source of funding which the company has considered, in the event of under subscription in the public issue.

Infrastructure companies are permitted to freely price the offerings in the domestic

market provided that the promoter companies along with Equipment Suppliers and other strategic investors subscribe to 50% of the equity at the same or a higher price than what is being offered to the public. Adequate disclosures about the justification for the pricing will be required to be made in the offer documents.

The Infrastructure Companies would be allowed to keep their issues open for 21 days. The relaxation would give infrastructure companies sufficient time to mobilise funds for their issues.

Infrastructure Companies would not be required to create and maintain a Debenture Redemption Reserve (DRR) in case of Debenture Issues.

SICK INDUSTRIAL COMPANY

Sick Industrial Companies Act (SICA)

Sick industrial unit is defined as a unit or a company (having been in existence for not less than five years) which is found at the end of any financial year to of a company less the provisions and expenses, as may be prescribed. An industrial unit is also regarded as potentially sick or weak unit if at the end of any financial year, it has accumulated losses equal to or exceeding 50 per cent of its average net worth in the immediately preceding four financial years and

has failed to repay debts to its creditor(s) in three consecutive quarters on demand made in writing for such repayment. The two basic factors which may result in sickness of an industrial unit are:-

Internal factors are those which arise within an organisation. They include:-

Mismanagement in various functional areas of a company like finance, production, marketing and personnel;

Wrong location of a unit;

Overestimation of demand and wrong dividend policy;

Poor

Poor inventory management in respect of finished goods as well as inputs;

Unwarranted unproductive fixed assets,etc.;

Failure environment;

Poor

External factors are those which take place outside an organisation. They include:-

Energy

Failure to achieve optimum capacity due to shortage of raw materials as a result of production set-backs in the supply industries, poor agricultural output because of natural reasons,changes in the import conditions,etc.

Infrastructural problems like transport bottlenecks;

Credit squeeze;

Situations like market recession, changes in technology,etc;

International

Industrial sickness may be caused by a combination of all such factors. It has several adverse consequences on the economy as a whole. Some of which may be enumerated as follows:-

It leads to loss of substantial revenue to the Government and enhances its public expenditure

It locks up necessary resources and funds in the sick unit. This also increases the non-performing assets (NPAs) of banks and financial institutions;

It leads to loss of production and productivity in the economy;

It

It vitiates the industrial atmosphere and leads to worker-management disputes,strikes,lock-outs,etc;

It climate of the economy.

In the light of the above consequences of sickness and its growing incidence by size, region and industry followed by its far-reaching adverse socioeconomic has been the enactment of the Sick Industrial Companies (Special Provisions) Act,1985 (SICA).

Sick Industrial Companies (Special Provisions) Act, 1985

The most important piece of legislation dealing with industrial sickness was the Sick Industrial Companies (Special Provisions) Act,1985 (SICA). It applies to industrial undertakings both in the public and private sectors. SICA pertains to the industries specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, (IDR Act) subject to the exceptions specified in the Act. SICA, including any rules or schemes made thereunder, had overriding provisions over other laws except the provisions of the Foreign Exchange Regulation Act,1973 and the Urban Land (Ceiling and Regulation) Act, 1976.

The as to make the investments in such units profitable. At the same time, to ensure the closure of unviable units so as to release the investments locked up in such units for productive use elsewhere.

Thus, the broad objectives of SICA were:-

Timely detection of sick and potentially sick companies.

Speedy such companies.

The expeditious enforcement of the measures so determined and for all matters connected therewith or incidental thereto.

The important provisions of SICA were:-

It provided for the constitution of two quasi-judicial bodies, that is, Board for Industrial and Financial Reconstruction (BIFR) and Appellate was entrusted with the work of taking appropriate measures for revival and rehabilitation of potentially sick undertakings and for liquidation of non-viable companies. While, AAIFR was constituted for hearing the appeals against the orders of the BIFR.

BIFR conditions:-

If with respect to their company. Such reference was to be made within sixty days from the date of finalisation of the duly audited accounts of the company for the financial year at the end of which the company had become sick. For filing the reference, the Board

On receiving such information (reference) with respect to a sick company or upon its own knowledge as to the financial condition of a company. Such a reference to the board may be made by:- (i) The Central Government; (ii) The Reserve Bank of India; (iii) State Governments; (iv) Public financial institutions; (v) State level institutions; or (vi) Scheduled banks.

However, industrial undertakings (belonging to such a company) were situated in that State; (ii) a public financial institution or a State level institution or a scheduled bank, unless it had, by reason of any financial assistance or obligation rendered by it or undertaken by it, interest in such a company. The Board

If the Board deems it fit to make an inquiry or to cause an inquiry to be made into any industrial company, it may appoint one or more persons as special director(s) of the company for safeguarding the financial and other interests of the company. The appointment of a special director shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956 or in any other law for the time being

Any special director so appointed shall :- (i) hold office during the pleasure of the Board and may be removed or substituted by any person by order in writing by the Board; (ii) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto; (iii) not be liable to retirement by rotation and shall for anything, done or omitted to be done in good faith in the discharge of his duties in relation to the sick industrial company.

If after making an inquiry, the Board is satisfied that the company has become sick, it shall, after considering all the relevant facts and circumstances

If

specified in the order, give such time to the company as it may deem fit to make its net worth exceed the accumulated losses.

If the Board decides that it is not practicable for the sick company to make its net worth exceed the accumulated losses within a reasonable company, it may, as soon as may be, by order in writing, direct any operating agency specified in the order to prepare a scheme providing for such measures in relation to that company. The measures may include:-

The financial reconstruction of the sick industrial company;

The

The amalgamation of the sick industrial company with any other company (transferee company), or any other company with the sick industrial company (transferee company);

The

Such other preventive, ameliorative and remedial measures as may be appropriate;

Such the purposes of the measures specified above

If the Board is of the opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record and forward its opinion to the company in accordance with the provisions of the Companies Act, 1956.

Where in respect of an industrial company, an inquiry is pending, or any scheme referred is under preparation or consideration or a sanctioned

scheme is under implementation, then no proceedings for the winding-up of the industrial company or for execution, distress or the like against any of the properties of the industrial company shall be made. Also, no suit for the recovery of money or for the enforcement of any security proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.

Also with respect to the above conditions, the Board may by order declare with respect to the sick industrial company concerned that the operation to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising there under before the

However, such declaration shall not be made for a period exceeding two years, which may be extended by one year at a time so that the total period shall not exceed seven years in the aggregate

Under with mentioned officer

CREDIT RATING AGENCIES

ICRA Limited in 1991 by leading financial/investment institutions, commercial banks and financial services companies as

Today, a Exchange.

Alliance with Moodys Investors Service

The international Credit Rating Agency Moodys Investors Service1 is ICRAs largest shareholder. The participation of Moodys is supported by a Technical Services Agreement, which entails Moodys providing certain high-value technical services to ICRA. Specifically, the agreement is aimed at benefiting ICRAs in-house research capabilities, and providing it with access to Moodys global research base. analysts on various subjects to help them better understand and manage concepts and issues relating to the development of the capital markets in India. Besides this formal training programme, the agreement provides for Moodys advising ICRA on Rating-products strategy, and the Ratings business in general.

The ICRA Factor

Facilitating Efficiency in Business... ICRA information products, Ratings, and solutions reflect independent, professional and impartial

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The Research Factor... We

capabilities. We have dedicated teams for Monetary, Fiscal, Industry and Sector research, and a panel of standards of quality and credibility.

Committed to the Development of the Financial Market... The focus of ICRA in the coming years will continue to be on developing innovative concepts and products in a dynamic market environment, generating and promoting wider investor awareness and interest, enhancing efficiency and transparency in the financial market, and providing a healthier environment for market participants and regulators

CRISIL

Credit Rating and Information Services of India Ltd. (CRISIL) a global analytical company providing ratings, research, and risk and policy advisory services.

CRISIL's majority shareholder is Standard and Poor's. Standard & Poor's, a part of The McGraw-Hill Companies, is the world's foremost provider of credit ratings.

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CRISIL's Global Analytical Centre (GAC) supports the Global Resource Management initiative of Standard & Poor's (S&P). Under this initiative, GAC provides resources to S&P to improve workflow efficiencies, handle end-to-end analytical jobs, process information, and execute complex modelling assignments.

CRISIL Research is India's largest independent research house. Through constant innovation, and comprehensive research offerings, covering the economy, industry and companies, CRISIL Research meets the requirements of more than 750 Indian and global clients. Apart from off-the-shelf research reports, CRISIL also provides incisive, customised research that allows clients to take informed business and investment decisions.

CRISIL offers products and services covering both equity and debt markets thereby furthering CRISIL's objective to make markets function better.

1. CRISIL Equities 2. Mutual Fund Research 3. Indices - IISL India Index Services and Products Ltd (IISL), a joint venture between NSE and CRISIL Ltd., was set up in May 1998 to provide a variety of indices and index related services and products for the Indian capital markets. It has a consulting and licensing agreement with Standard and Poor's (S&P), the world's leading provider of investible equity indices, for co-branding equity indices.

CRISIL

clients) with independent information, opinions and solutions related to credit ratings and risk assessment; energy, infrastructure and corporate advisory; research on India's economy, industries and companies; global equity research; fund services; and risk management.

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CRISIL is the largest credit rating agency in India. CRISIL pioneered ratings in India more than 20 years ago, and is today the undisputed business leader, with the largest number of rated entities and rating products: CRISIL's rating experience covers more than 45,676 entities, including 23,500 small and medium enterprises (SMEs). As on September 30, 2011, we had more than 15,643 ratings (including over 8000 SMEs) outstanding.

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CRISIL GR&A has served more than 500 firms over the last decade. Our clients include:

12 of the top 15 global investment banks

2 of the top 10 global consulting groups

3 of the top 10 global Asset Management Companies

3 of the top 15 global insurance companies

Several fortune 500 companies

CRISIL Research is India's largest independent research house. Through constant innovation, and comprehensive research offerings covering economy, industry, companies CRISIL Research meets the requirements of more than 750 Indian and global clients. Apart from off the shelf research reports, CRISIL also provides incisive, customised research that allows clients to take informed business and investment decisions.

Comprehensive research coverage on over 65 industries and 150 corporates makes CRISIL a preferred service provider to -

90% of India's commercial banks

4 of the world's largest consulting firms

All the leading brokers, investment banks and private equity players

CRISIL is an eminent player in the capital markets space with detailed perspective covering both debt and equity markets. CRISIL's capital market offerings can be

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CRISIL Equities Offerings under CRISIL Equities are classified as - independent equity research (globally a unique concept) and initial public offer (IPO) grading. CRISIL equities also provide equity outsourcing and customised research for information memoranda and offer documents that are prepared by companies as part of their fund-raising initiatives.

Mutual Fund Services CRISIL FundServices (CFS) is India's leading provider of rankings, desktop and valuation tools, indices and market benchmarks and customised investment research. Its Mutual Fund Rankings have been the industry standard for mutual fund evaluation in India for more than a decade.

CFS has executed various policy level prestigious assignments -

Assisted Employee Provident Fund Organisation (EPFO) in selection of fund managers to manage the EPFO's funds and provide better returns to its members.

Assisted Provident Fund Regulatory and Development Authority (PFRDA) in framing regulations under the PFRDA act.

RISIL Infrastructure Advisory* provides practical and innovative solutions to governments, donor funded agencies and leading organizations in over 20 emerging economies across the world to:

Transform efficiency of public institutions and sector

Design and strengthen reform programmes to catalyse private sector participation

Improve infrastructure service delivery

Some of the key assignments executed :

CRISIL Infrastructure Advisory strategized the takeout finance scheme - a method of making long term debt financing available to large infrastructure projects for India Infrastructure Company Ltd (IIFCL).

CRISIL Infrastructure Advisory's Energy Practice has designed and implemented first of its kind novel Electricity Distribution Franchisee Contract in Maharashtra.

* Effective April 01, 2007, CRISIL transferred its advisory and risk consulting business into a wholly owned subsidiary, CRISIL Risk and Infrastructure Solutions Ltd (CRIS).

CRISIL Risk Solutions* (CRS) provides comprehensive risk management services to banks, financial institutions, and corporates across all areas of risk including: credit, market and operational. In addition to providing innovative software products, it also extends consultancy services and analytical insights, which are focused on helping customers become Basel II-compliant.

Ranked as the No. 1 Risk Solution provider in the last Indian Banks' Association (IBA) Finsight media survey, CRISIL Risk Solutions has delivered risk solutions to about 50 financial institutions in India and abroad and has largest user base of more than 100000 users. CRS's flagship product RAM is the largest deployed Internal risk rating solution in India.

* Effective April 1, 2007, CRISIL transferred its advisory and risk consulting business into a wholly owned subsidiary, CRISIL Risk and Infrastructure Solutions Ltd (CRIS).