How a Company Can do IPO

vengabeats

vengabeats

Nilesh Nagdev
Before issuing a IPO the company have to follow these rules

1. The company must have an existence of atlest 3- yrs
2. The company must have an distributional profits of 3 years
3. The compoany must have tangible assets of at least 3 Crores Net
4. Company should have a networth of 1 Crore
5. Net worth= equity+ reserve
6. Size of an IPO should not exceed more than 5 times of networth
 
Initial Public Offerings

Corporates may raise capital in the primary market by way of an initial public offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. This Initial Public Offering can be made through the fixed price method, book building method or a combination of both.

In case the issuer chooses to issue securities through the book building route then as per SEBI guidelines, an issuer company can issue securities in the following manner:

1> 100% of the net offer to the public through the book building route.

2>75% of the net offer to the public through the book building process and 25% through the fixed price portion.
 
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