Presentationon“Marketing Of Primary Issue”

8/14/2019 Presentation on “Marketing Of Primary Issue”

http://slidepdf.com/reader/full/presentationonmarketing-of-primary-issue 1/19

A

Presentation

on

“Marketing Of Primary Issue”

Presented By:Ashwin Chaudhary (Roll No 5)

Mohsinkhan Belim (Roll No 2)



Primary market

The primary market is that part of the capital markets that deals with the issuance of new securities.Companies, governments or public sector institutionscan obtain funding through the sale of a new stock orbond issue. This is typically done through a syndicate of securities dealers. The process of selling new issues toinvestors is called underwriting . In the case of a new stock issue, this sale is an initial public offering (IPO).

Dealers earn a commission that is built into the price of the security offering, though it can be found in theprospectus.

http://www.answers.com/topic/capital-market

http://www.answers.com/topic/security-finance

http://www.answers.com/topic/funding

http://www.answers.com/topic/stock

http://www.answers.com/topic/bond-wordnet

http://www.answers.com/topic/underwriting

http://www.answers.com/topic/initial-public-offering

http://www.answers.com/topic/prospectus

http://www.answers.com/topic/prospectus


http://www.answers.com/topic/underwriting

http://www.answers.com/topic/bond-wordnet

http://www.answers.com/topic/stock

http://www.answers.com/topic/funding

http://www.answers.com/topic/security-finance

http://www.answers.com/topic/capital-market



Methods of issuing securities in the

primary market are:

Initial public offering ;

Rights issue (for existing companies);

Preferential issue.


http://www.answers.com/topic/rights-issue-1

http://www.answers.com/topic/rights-issue-1




Role of the „Primary Market‟

The primary market provides the channel for sale of new securities. Primary market provides opportunity toissuers of securities; Government as well as corporates,

to raise resources to meet their requirements of investment and/or discharge some obligation. They may issue the securities at face value, or at adiscount/premium and

these securities may take a variety of forms such asequity, debt etc. They may issue the securities indomestic market and/or international market.

http://www.indiansharemarket.org/what-is-the-role-of-the-%e2%80%98primary-market%e2%80%99/














SEBI and what is its role

The Securities and Exchange Board of India (SEBI) is theregulatory authority in India established under Section 3 of SEBI

Act, 1992. SEBI Act, 1992 provides for establishment of Securities and Exchange Board of India(SEBI) with statutory powers for

(a) protecting the interests of investors in securities(b) promoting the development of the securities market and(c)regulating the securities market. Its regulatory jurisdictionextends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated

with securities market. SEBI has been obligated to perform theaforesaid functions by such measures as it thinks fit. Inparticular, it has powers for:

http://www.indiansharemarket.org/what-is-sebi-and-what-is-its-role/






Cont..

Registering and regulating the working of stock brokers

, sub – brokers etc.

Promoting and regulating self-regulatory organizations

Prohibiting fraudulent and unfair trade practices

Calling for information from, undertaking inspection,conducting inquiries and audits of the stock exchanges,

intermediaries, self – regulatory organizations, mutualfunds and other persons associated with the securitiesmarket.











Issue of Shares

Why do companies need to issue shares to

the public?

What are the different kinds of issues?

What is meant by Issue price?

What is meant by Market Capitalisation?

The market value

http://www.indiansharemarket.org/issue-of-shares/








What is an Initial Public Offer-IPO

An Initial Public Offer (IPO) is the selling of securities

to the public in the primary market. It is when anunlisted company makes either a fresh issue of

securities or an offer for sale of its existing securities orboth for the first time to the public. This paves way forlisting and trading of the issuer’s securities. The sale of

securities can be either through book building or

through normal public issue.

http://www.indiansharemarket.org/what-is-an-initial-public-offer-ipo/






Marketing need for primary issue.IPO Success: It's the marketing

For Fully Subscription

Awareness about new issue

To attract public for investment To raise fund via more application

To raise the market price via good imagination



Marketing of Primary Issue

IPO management seems to be fast catching on, withthe “positioning” and “marketing ” of an issuebecoming as crucial to its success as the fundamentalsof a company.

In many ways, marketing an IPO is akin to marketing amovie or an FMCG product, such as a cola or a pizza.

These days, IPOs need a touch of brand marketing andmanagement involving well-placed positioning andcorrect pricing.

That’s one part of the story. The other iscommunicating the facts to prospective investors.

http://economictimes.indiatimes.com/Markets/IPOs/IPO-Success-Its-the-marketing-stupid/articleshow/1937744.cms




Cont..

And here come the PR agencies, which have now assumed themantle of “communications experts”. Communications expertstoday have to master the art of advising clients on Sebi guidelinesand compliances, PR activities, road shows and events, databasemanagement and so on.

Seamless interaction with distribution channels is not limited to white goods or telecom companies. IPO industry also has itsown channel partners - the broking community and their sub-brokers and agents at almost door-to-door level.

Opinion makers aren’t limited to politics or Bollywood and the

automobile industry. Numerous brokerage agencies areapproached to analyse an upcoming IPO. “Third party testimonials play a major role as analysts with sectoral knowledgestep in,” says the head of a large brokerage house.





Cont..

Money management has acquired many dimensions and an IPO is no different. Playersinvolved in IPO management await with bated

breath just as Bollywood stars, directors andproducers on the day of the release. Action over.Cut.



Marketing the IPO Once it is filed the registration statement is transformed into the

preliminary prospectus or “Red Herring”

The preliminary prospectus is used to market the issue The SEC has 20 days to declare the issue effective

At that point the red herring becomes a prospectus

The company and the underwriter promote the IPO through the “roadshow”

Road shows provide important monitoring for the underwriter on

investor demand During the road shows the underwriter receives orders from individual

and institutional investors - book building Retail investors typically submit a “market order” in which only the

quantity desired is stated

Institutions typically submit limit orders where the quantity demanded is

subject to a maximum price Retail orders are received earlier than institutional orders since institutions

prefer to wait to a later stage of the process before submitting their orders

Institutions submit an order with a commitment to purchase more sharesin the open market if their order is fulfilled



Contd..

Roadshow Preparation Analysts may not participate in the preparation of, contribute to, comment

on, or review the roadshow presentation

Bankers may not solicit input from Analysts on the roadshow presentation

Marketing and Roadshow

During marketing process, no event can be attended by Bankers and Analysts together

Analysts may not introduce management to buyside accounts duringroadshow

Analysts may not provide input into the roadshow schedule or identifyinvestors to target

Analysts may not attend roadshow meetings

Analyst estimates and other perspectives/opinions may not be discussed ordistributed in any manner, at any time by Bankers or Management duringthe roadshow



Contd..

Analysts‟ communications with Investors Analysts may NOT make outgoing phone calls or other

communications to Investors to solicit interest in theoffering

Analysts may respond to incoming calls from Investorsand discuss: Business fundamentals of the company

Information contained in the prospectus

Analyst‟s previously published research reports and financialmodel

Analysts may not discuss or provide an opinion withrespect to: Structuring or pricing of the transaction

Any information not contained in the prospectus



Contd..

Bankers and ECM personnel may not direct and Analyst to initiate or take calls from investors

Analysts may not communicate investor feedback to Bankers or ECM personnel

Analysts may not participate in the pricing call News Paper Advertisement

During marketing process, no event can be attended byBankers and Analysts together

Hear company or underwriter gives total informationabout IPO in various news papers.

Gives ads about issue in every news papers, so thatinvestor can know about IPO.



Contd..

TV commercial During marketing process, no event can be attended by

Bankers and Analysts together

Hear company or underwriter gives TV commercial ads

about IPO and company and its important facts of business.

Gives ads about issue in TV commercial, so thatinvestor can know about IPO.

Online IPO Marketing Net worth: marketing your IPO online gives you

access to a whole new world of investors





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Presentationon“Marketing Of Primary Issue”