PROJECT TOPIC

A STUDY ON RECENT INITIAL PUBLIC OFFERS (IPO) AND THEIR

SHARE PRICE MOVEMENT AFTER LISTING, WITH REFERENCE TO
COCHIN STOCK EXCHANGE LTD
EXECUTIVE SUMMARY
As we all know IPO – INITIAL PUBLIC OFFERING is the
hottest topic in the current industry, mainly because of India being a
developing country and lot of growth in various sectors which leads a
country to ultimate success. And when we talk about country’s growth
which is dependent on the kind of work and how much importance to
which sector is given. And when we say or talk about industries growth
which leads the economy of country has to be balanced and given
proper finance so as to reach the levels to fulfill the needs of the
society. And industries which have massive outflow of work and a big
portfolio then its very difficult for any company to work with limited
finance and this is where IPO plays an important role.
This report talks about how IPO helps in raising fund for the
companies going public, what are its pros and cons, and also it gives us
detailed idea why companies go public. How and what are the steps
taken by the companies before going for any IPO and also the role of
(SEBI) Securities and Exchange Board of India the BSE and NSE , what
are primary and secondary markets and also the important terms
related to IPO. It gives us idea of how IPO is driven in the market and
what are various factors taken into consideration before going for an
IPO. And it also tells us how we can more or less judge a good IPO.
Then we all know that scams have always been a part of any sector
you go in for which are covered in it and also few recommendations are
given for the same. It also gives us some idea about what are the
expenses that a company undertakes during an IPO.
IPO has been one of the most important generators of
funds for the small companies making them big and given a new vision
in past and it is still continuing its work and also for many coming
years.

.
INTRODUCTION
IPO stands for Initial Public Offering and means the new
offer of shares from a company which was previously unlisted. This is
done by offering those shares to the public, which were held by the
promoters or the private investors prior to the IPO. In the case when
other investors or Promoter held the shares the stake holding comes
down to the extent their shares are offered to the public. In other cases
new shares are issued to the public and the shares, which are with the
promoters stay with them. In both cases the share of the promoters in
the total capital comes down.
For example say there are 100 shares in a company and 50
of these are offered to the public in an IPO then in such a case the
promoter’s stake in the company comes down from 100% to 50%. In
another case the company issues 50 additional shares to the public
and the stake of the promoter comes down from 100% to 67%.
Normally in an IPO the shares are issued at a discount to
what is considered their intrinsic value and that’s why investors keenly
await IPOs and make money on most of them. IPO are generally priced
at a discount, which means that if the intrinsic value of a share is
perceived to be Rs.100 the shares will be offered at a price, which is
lesser than Rs.100 say Rs.80 during the IPO. When the stock actually
lists in the market it will list closer to Rs.100. The difference between
the two prices is known as Listing Gains, which an investor makes
when investing in IPO and making money at the listing of the IPO. A
Bullish Market gives IPO investors a clear opportunity to achieve long
term targets in a short term phase.
What is an IPO
An IPO is the first sale of stock by a company to the public.
A company can raise money by issuing either debt or equity. If the
company has never issued equity to the public, it's known as an IPO.
Companies fall into two broad categories: private and
public.
A privately held company has fewer shareholders and its owners don't
have to disclose much information about the company. Anybody can
go out and incorporate a company: just put in some money, file the
right legal documents and follow the reporting rules of your
jurisdiction. Most small businesses are privately held. But large
companies can be private too. Did you know that IKEA, Domino's Pizza
and Hallmark Cards are all privately held?
It usually isn't possible to buy shares in a private company.
You can approach the owners about investing, but they're not
obligated to sell you anything. Public companies, on the other hand,
have sold at least a portion of themselves to the public and trade on a
stock exchange. This is why doing an IPO is also referred to as "going
public."
Public companies have thousands of shareholders and are
subject to strict rules and regulations. They must have a board of
directors and they must report financial information every quarter. In
the United States, public companies report to the Securities and
Exchange Commission (SEC). In other countries, public companies are
overseen by governing bodies similar to the SEC. From an investor's
standpoint, the most exciting thing about a public company is that the
stock is traded in the open market, like any other commodity. If you
have the cash, you can invest. The CEO could hate your guts, but
there's nothing he or she could do to stop you from buying stock.
The first sale of stock by a private company to the public,
IPO’s are often issued by smaller, younger companies seeking capital
to expand, but can also be done by large privately-owned companies
looking to become publicly traded. In an IPO, the issuer obtains the
assistance of an underwriting firm, which helps it determine what type
of security to issue (common or preferred), best offering price and time
to bring it to market. IPO’s can be a risky investment. For the individual
investor, it is tough to predict what the stock will do on its initial day of
trading and in the near future since there is often little historical data
with which to analyze the company. Also, most IPO’s are of
companies going through a transitory growth period, and they are
therefore subject to additional uncertainty regarding their future value.
Primary and Secondary markets
In the primary market securities are issued to the public
and the proceeds go to the issuing company. Secondary market is term
used for stock exchanges, where stocks are bought and sold after they
are issued to the public.
PRIMARY MARKET
The first time that a company’s shares are issued to the
public, it is by a process called the initial public offering (IPO). In an IPO
the company offloads a certain percentage of its total shares to the
public at a certain price.
Most IPO’S these days do not have a fixed offer price.
Instead they follow a method called BOOK BUILDIN PROCESS, where
the offer price is placed in a band or a range with the highest and the
lowest value (refer to the newspaper clipping on the page). The public
can bid for the shares at any price in the band specified. Once the bids
come in, the company evaluates all the bids and decides on an offer
price in that range. After the offer price is fixed, the company allots its
shares to the people who had applied for its shares or returns them
their money.
SECONDRY MARKET
Once the offer price is fixed and the shares are issued to
the people, stock exchanges facilitate the trading of shares for the
general public. Once a stock is listed on an exchange, people can start
trading in its shares. In a stock exchange the existing shareholders sell
their shares to anyone who is willing to buy them at a price agreeable
to both parties. Individuals cannot buy or sell shares in a stock
exchange directly; they have to execute their transaction through
authorized members of the stock exchange who are also called STOCK
BROKERS.
Why Go Public?
Basically, going public (or participating in an "initial public
offering" or IPO) is the process in which a business owned by one or
several individuals is converted into a business owned by many. It
involves the offering of part ownership of the company to the public
through the sale of debt or more commonly, equity securities (stock).
Going public raises cash and usually a lot of it. Being
publicly traded also opens many financial doors:
 Because of the increased scrutiny, public companies can usually
get better rates when they issue debt.
 As long as there is market demand, a public company can always
issue more stock. Thus, mergers and acquisitions are easier to do
because stock can be issued as part of the deal.
 Trading in the open markets means liquidity. This makes it
possible to implement things like employee stock ownership
plans, which help to attract top talent.
Being on a major stock exchange carries a considerable
amount of prestige. In the past, only private companies with strong
fundamentals could qualify for an IPO and it wasn't easy to get listed.
The internet boom changed all this. Firms no longer
needed strong financials and a solid history to go public. Instead, IPOs
were done by smaller startups seeking to expand their businesses.
There's nothing wrong with wanting to expand, but most of these firms
had never made a profit and didn't plan on being profitable any time
soon. Founded on venture capital funding, they spent like Texans
trying to generate enough excitement to make it to the market before
burning through all their cash. In cases like this, companies might be
suspected of doing an IPO just to make the founders rich. This is known
as an exit strategy, implying that there's no desire to stick around and
create value for shareholders. The IPO then becomes the end of the
road rather than the beginning.
How can this happen? Remember: an IPO is just selling
stock. It's all about the sales job. If you can convince people to buy
stock in your company, you can raise a lot of money.
Getting In On an IPO
The Underwriting Process
Getting a piece of a hot IPO is very difficult, if not
impossible. To understand why, we need to know how an IPO is done, a
process known as underwriting.
When a company wants to go public, the first thing it does
is hire an investment bank. A company could theoretically sell its
shares on its own, but realistically, an investment bank is required - it's
just the way Wall Street works. Underwriting is the process of raising
money by either debt or equity (in this case we are referring to equity).
You can think of underwriters as middlemen between companies and
the investing public. The biggest underwriters are Goldman Sachs,
Merrill Lynch, Credit Suisse First Boston, Lehman Brothers and Morgan
Stanley.
The company and the investment bank will first meet to
negotiate the deal. Items usually discussed include the amount of
money a company will raise, the type of securities to be issued and all
the details in the underwriting agreement. The deal can be structured
in a variety of ways. For example, in a firm commitment, the
underwriter guarantees that a certain amount will be raised by buying
the entire offer and then reselling to the public. In a best efforts
agreement, however, the underwriter sells securities for the company
but doesn't guarantee the amount raised. Also, investment banks are
hesitant to shoulder all the risk of an offering. Instead, they form a
syndicate of underwriters. One underwriter leads the syndicate and the
others sell a part of the issue.
Once all sides agree to a deal, the investment bank puts
together a registration statement to be filed with the SEC. This
document contains information about the offering as well as company
info such as financial statements, management background, any legal
problems, where the money is to be used and insider holdings. The SEC
then requires a cooling off period, in which they investigate and make
sure all material information has been disclosed. Once the SEC
approves the offering, a date (the effective date) is set when the stock
will be offered to the public.
During the cooling off period the underwriter puts together
what is known as the red herring. This is an initial prospectus
containing all the information about the company except for the offer
price and the effective date, which aren't known at that time. With the
red herring in hand, the underwriter and company attempt to hype and
build up interest for the issue. They go on a road show - also known as
the "dog and pony show" - where the big institutional investors are
courted.
As the effective date approaches, the underwriter and
company sit down and decide on the price. This isn't an easy decision:
it depends on the company, the success of the road show and, most
importantly, current market conditions. Of course, it's in both parties'
interest to get as much as possible.
Finally, the securities are sold on the stock market and the
money is collected from investors.
As you can see, the road to an IPO is a long and
complicated one. You may have noticed that individual investors aren't
involved until the very end. This is because small investors aren't the
target market. They don't have the cash and, therefore, hold little
interest for the underwriters. If underwriters think an IPO will be
successful, they'll usually pad the pockets of their favorite institutional
client with shares at the IPO price. The only way for you to get shares
(known as an IPO allocation) is to have an account with one of the
investment banks that is part of the underwriting syndicate. But don't
expect to open an account with $1,000 and be showered with an
allocation. You need to be a frequently trading client with a large
account to get in on a hot IPO.
Bottom line, your chances of getting early shares in an IPO are slim to
none unless you're on the inside. If you do get shares, it's probably because nobody
else
wants them. Granted, there are exceptions to every rule and it would be incorrect
for us to
say that it's impossible. Just keep in mind that the probability isn't high if you are a
small
investor.
IPO – ADVANTAGES AND
DISADVANTAGES
The decision to take a company public in the form of an
initial public offering (IPO) should not be considered lightly. There are
several advantages and disadvantages to being a public company,
which should thoroughly be considered. This memorandum will discuss
advantages and disadvantages of conducting an IPO and will briefly
discuss the steps to be taken to register an offering for sale to the
public. The purpose of this memorandum is to provide a thumbnail
sketch of the process. The reader should understand that the process
is very time consuming and complicated and companies should
undertake this process only after serious consideration of the
advantages and disadvantages and discussions with qualified advisors.
Advantages of going public
 Increased Capital
A public offering will allow a company to raise capital to use for
various corporate purposes such as working capital acquisitions,
research and development, marketing, and expanding plant and
equipment.
 Liquidity
Once shares of a company are traded on a public exchange,
those shares have a market value and can be resold. This allows
a company to attract and retain employees by offering stock
incentive packages to those employees. Moreover, it also
provides investors in the company the option to trade their
shares thus enhancing investor confidence.
 Increased Prestige
Public companies often are better known and more visible than
private companies, this enables them to obtain a larger market
for their goods or services. Public companies are able to have
access to larger pools of capital as well as different types of
capital.
 Valuation
Public trading of a company's shares sets a value for the
company that is set by the public market and not through more
subjective standards set by a private valuator. This is helpful for
a company that is looking for a merger or acquisition. It also
allows the shareholders to know the value of the shares.
 Increased wealth
The founders of the company often have the sense of increased
wealth as a result of the IPO. Prior to the IPO these shares were
illiquid and had a more subjective price. These shares now have
an ascertainable price and after any lockup period these shares
may be sold to the public, subject to limitations of federal and
state securities laws.
Disadvantages of going Public
 Time and Expense
Conducting an IPO is time consuming and expensive. A
successful IPO can take up to a year or more to complete and a
company can expect to spend several hundreds of thousands of
dollars on attorneys, accountants, and printers. In addition, the
underwriter's fees can range from 3% to 10% of the value of the
offering. Due to the time and expense of preparation of the IPO,
many companies simply cannot afford the time or spare the
expense of preparing the IPO.
 Disclosure
The SEC disclosure rules are very extensive. Once a company is a
reporting company it must provide information regarding
compensation of senior management, transactions with parties
related to the company, conflicts of interest, competitive
positions, how the company intends to develop future products,
material contracts, and lawsuits. In addition, once the offering
statement is effective, a company will be required to make
financial disclosures required by the Securities and Exchange Act
of 1934. The 1934 Act requires public companies to file quarterly
statements containing unaudited financial statements and
audited financial statements annually. These statements must
also contain updated information regarding nonfinancial matters
similar to information provided in the initial registration
statement. This usually entails retaining lawyers and auditors to
prepare these quarterly and annual statements. In addition, a
company must report certain material events as they arise. This
information is available to investors, employees, and
competitors.
 Decisions based upon Stock Price
Management's decisions may be effected by the market price of
the shares and the feeling that they must get market recognition
for the company's stock.
 Regulatory Review
The Company will be open to review by the SEC to ensure that
the company is making the appropriate filings with all relevant
disclosures.
 Falling Stock Price
If the shares of the company's stock fall, the company may lose
market confidence, decreased valuation of the company may
effect lines of credits, secondary offering pricing, the company's
ability to maintain employees, and the personal wealth of
insiders and investors.
 Vulnerability
If a large portion of the company's shares are sold to the public,
the company may become a target for a takeover, causing
insiders to lose control. A takeover bid may be the result of
shareholders being upset with management or corporate raiders
looking for an opportunity. Defending a hostile bid can be both
expensive and time consuming. Once a company has weighed
the advantages and disadvantages of being a public company, if
it decides that it would like to conduct an IPO it will have to retain
a lead
 COMPANY PROFILE

COCHIN STOCK EXCHANGE LTD

INTRODUCTION

COCHIN STOCK EXCHANGE LTD is one of the premier Stock Exchanges in

India. Established in the year 1978.The Exchange has under gone tremendous

transformation over the years. The exchange had a humble beginning with just 5

companies listed in 1978 -79, and had only 14 members. Today the exchange has

more than 508 members and 240 listed companies. In 1980 the company went for

computerization of its offices. In order to keep pace with the changing scenario in

the capital market, CSE look various initiatives including trading in dematerialized

shares. CSE introduced the facility of computerized trading called "Cochin Online

Trading (COLT)" on March 17, 1997.. CSE was one of the promoters of the

"Interconnected stock exchange of India (ISE)".The objective was to consolidate

the small, fragmented and less liquid markets into a national level integrated liquid

market. With the enforcement of efficient margin system and surveillance, CSE

has successfully prevented defaults. Introduction of fast track system made CSE

the stock exchange with shortest settlement cycle in the country at that time. By the

dawn of the new century, the regional exchanges faced a serious challenge from
the NSE & BSE. To face this challenge CSE promoted a 100% subsidiary called

the "Cochin Stock Brokers Ltd. (CSBL)" and started trading in the National Stock

Exchange (NSE) and Bombay Stock Exchange (BSE).

CSBL is the first subsidiary of a stock exchange to get membership in both

NSE & BSE,CSBL also became a participant in the Central Depository

Services. The CSE has been playing a vital role in the economic development

of the country in general, and Kerala in particular and striving hard so as to

achieve the following goals:

• Providing investors with high level of liquidity whereby the cost and

time involved in the entry and exit from the market becomes the least.

• Bringing in high tech solutions and make possible absolute

transparency of all operations.

• Building infrastructure for capital market by turning CSE into a

financial super market.

• Spreading equity cult and to serve investors of the region.

• Professional stock broking and investment management function.

 • Imparting Capital market knowledge to all intermediaries on a

continuous basis.

• Developing a winning team of professionals, as employees of CSE

whose development will play a crucial role in shaping the future of

CSE & its associates.

MEMBERSHIP PROFILE

CSE currently has more than 508 trading members. The total trading

membership is limited to 1000. As per the SEBI norms CSE charges an initial

deposit of Rs 2 Lakh from each of its members. Based on the volume of

trade,members are required to contribute additional deposits. Along with this an

annual subscription fee of Rs.200 for individual members and Rs 500 for corporate

members is being charged by CSE. The members are allowed to appoint their

assistants or sub brokers based on the guidelines given by SEBI. During the first

five years of membership each member who is registered with the Securities and

Exchange Board has to pay Rs. 5000 annually to SEBI as SEBI Fee on or before
1st October of each financial year.There after a fee of Rs 5000 has to be paid to

SEBIfor every block of five years .

The Cochin Stock Exchange is directly under the control and supervision of

Securities & Exchange Board of India (the SEBI), and is today a demutualised

entity in accordance with the Cochin Stock Exchange  (Demutualisation)  Scheme, 

2005  approved  and  notified  by SEBI on 29th of August 2005. Demutualisation 

essentially means de-linking and separation of ownership and trading rights and 

restructuring  the  Board  in  tune  with  the Corporate Governance norms.  The

first phase of de-linking these  rights  has since come into effect.  And in the

second phase, the ownership, which is presently held by the Members of the

Exchange, would also undergo a change in that 51% of the share capital will be

held by the public, other than stockbrokers, within the next one year. 

MANAGEMENT OF CSE LTD

The policy decisions of the CSE are taken by the Board Of Directors which

is constituted with 13 members of whom less than one-fourth are elected from

amongst the trading member of CSE, 2 persons are nominated by SEBI, The rest

are Public Interest Directors.. The Board appoints the Executive Director who is
an ex-officio member of the Board. He takes care of the administration of the

exchange.

The Cochin Stock Brokers Ltd (CSBL), is the wholly owned subsidiary of the

exchange. The Subsidiary is managed by the Chief Executive Officer.The Board

Of Directors of the subsidiary consists of the Chief Executive Officer,two

representative directors from the CSE of whom one is the Executive Director,and

the other a senior official of CSE.The other members of the board are Public

Interest Directors appointed with the consent of SEBI.

The operation of any Stock Exchange can commence only with the recognition of

the Central Government under the Securities Contract (Regulation) Act (SCR),

1956. The various regulations concerning the listing of companies and the trading

related activities are provided under SCR rules, 1957 .The bylaws of the exchange

give guidelines on opening and closing of CSE, timing of trading, regulation of

badla and carryover business, fixation of margins, making of prices, arbitration,

settlements of disputes etc.

ORGANISATIONAL STRUCTURE
 BOARD OF
DIRECTORS

EXECUTIVE
DIRECTOR

Legal Systems Members Settleme Listing

hip nt

Marketing Finance
and Public

Each of the department and their various functions are described below:

LEGAL DEPARTMENT
 CSE has a full-fledged Legal Department, headed by Manager-
Legal and is primarily engaged in advising the management in the merits and
demerits of legal issues involving the exchange.
A major function undertaken by the department is to ensure that the various
rules, regulations and directives of SEBI with regard to trading in the Capital
Market by brokers and sub-brokers, are brought to the notice to members and
the investing public. Manager-Legal is the compliance officer as per the
provisions of SEBI regulations and ensures strict compliance of SEBI directives
and guidelines.
Manager-Legal also functions as secretary to the board of directors. The three
important areas being looked after by the legal department are:
(a) Investor Grievance Service
(b) Arbitration
(c) Default
SYSTEM DEPARTMENT
It is the heart of the various operations of CSE. The
department provides the necessary technical supports for screen based
trading and the computerized functioning of all other departments.
The various activities of the department include: -
 Developments of various software needed for the functioning of
the exchange.
 Maintenance of Multex software, which provides online trading
with NSE and BSE.
 Maintenance of an effective network of computers for the smooth
functioning of the exchange.
  Provide the necessary services to the settlement and surveillance
departments.
The major back office system soft wares used are NESS and BOSS for NSE and
BSE trades calculations respectively. These soft wares are developed in-house by
CSE. These soft wares are used to maintain the entire records of all the trades that
occur each day. It also does all the required calculations for deductions and also
creates all kinds of reports needed by the brokers and their clients.
Now a days CSE using CBRS (Core Broking Software). The clients and members
are directly used by CBRS system.

SETTLEMENT DEPARTMENT
Settlement department is a key department of the CSE. It is
dealing with cash and securities. It helps the broker in setting the matters
related to their pay-in and payout, recovery of dues and settling the matters
related to the bad deliveries. This department is headed by a Deputy Manager
and assisted by two senior officers who look into the operations involved in the
settlement activities in CSE.  CSE is following T+2 settlement system (where
T- date of transaction).

SURVEIALLANCE DEPARTMENT
The Exchange has set up Surveillance Department to keep
close watch on price movements of scrip, detect market abuses like price
rigging, monitor abnormal prices and volumes which are not consistent with
normal trading pattern etc. The main objectives of the department are to
provide a free and fair market, to arrest unsystematic risk from entering into
the system and to manage risks. The surveillance function at the exchange has
assumed greater importance in the last few years. SEBI has directed the stock
exchanges to setup a separate surveillance department with staff exclusively
assigned for this function. 
It also offers services like:
 Keeping a close watch on the price movement of scrip’s.
  Detect market manipulations like price rigging.
 Monitor abnormal changes in prices and volumes witch are not
consistent with the normal trading pattern.
 Monitor the member broker’s positions to insure that defaults do
not occur.
ADMINISTRATION DEPARTMENT
A legal officer with two Deputy Managers for administration and
compliance and management information system heads the department. Two
senior officers looking after public relations and administration form part of
administration.
The major activities of this department include: -
 Organizing council meeting, annual general meeting, extra
ordinary general meeting, council meetings etc.
  Looking after the admission and expulsion of members.
 Taking care of all related functions needed for the smooth
functioning of the exchange including regular payments of rent,
bills, taxes etc.
 Public relations.
  Giving necessary guidelines and support to students and other
who visit the exchange for various activities.
 Implementation of the guidelines given by council of
management.
 Procedures involved in the listing.
 Matters associated with various committees like arbitration,
grievance, disciplinary and defaults.

LISTING
Listing means admission of the securities of a company to
trading privileges on a Stock Exchange. The principal objectives of listing are
to provide ready marketability and impart liquidity and free negotiability to
stocks and shares; ensure proper supervision and control of dealings therein;
and protect the interests of shareholders and of the general investing public.

FINANCE DEPARTMENT
This department takes care of the various financial
transactions of CSE thus acting as the life line of the organization. The
department is headed by a Finance officer and assisted by a Deputy Manager
and several senior and junior officers.
The major activities of the department include:
 Annual Report Generation
 Fund Management
 Interaction with bankers
  Keeping general accounts of the CSE.
 Maintaining of payrolls and cash register.
 Taxation
 Budgeting and Expense research.
 Maintenance of internal control system.
 Interaction with external and internal audits.

OBJECTIVE OF THE STUDY

The objective of the study mainly classified into primary and secondary objective

PRIMARY OBJECTIVE

The primary objective is to study about recent Initial Public Offering(IPO)

companies and their share price variation after listing in stock exchange

To give suggestions and recommendation to the investors ,who are interested in

IPO shares
SECONDARY OBJECTIVE

To suggest the short term and long term investment opportunities to the investors
in IPO shares

To know the price trend of the equity shares of the selected recent IPO companies

To find out intrinsic value of the equity shares and recommend for buy or sell
option

To find out systematic risk and total risk of selected recent IPO companies

To study financial performance of recent IPO companies, from april to may

To deal with theoretical aspects of suggestions provided to the IPO investors

To analyze the market performance of recent IPO

RESEARCH METHODOLOGY

Type of research: explorative

SAMPLE SELECTION

Here I use random sampling for that I select 15 companies out of 37 total IPOs in
last six month ie from October 2010 to march 2011

PERIOD OF THE STUDY

Period of the study means the duration take for completing this project work. So
the period of study is from 16th april 2011 to 31st May , 2011 in cochin stock
exchange

SOURCES OF DATA

The main source of data is cochin stock exchange and datas from, the websites of
national stock exchange and Bombay stock exchange

TOOLS OF DATA COLLECTION

Data refers to facts or information. Collection of data means information required
for doing the project work is to be collected from various sources like primary
source and secondary source. Primary source means the data collected by the
researcher at first time not by copying from any other sources. In addition, these
kind of datas collected by the researcher is called primary data. Secondary data
means the researcher collecting from already existing sources called secondary
sources

In this study I only using secondary datas they are

Magazines, journals

News papers, annual reports

Websites

STATISTICAL ANALYSIS

Here statistical tool used is return analysis

Return=(P1-P0|P0)*100

P1=current price of share

P0=issue price

RATIO ANALYSIS

Some important ratio such as

Earning per share(EPS)=EAT-DIVIDEND TO PREFERENCE

HOLDERS/NO OF EQUITY SHARES

PRICE EARNING RATIO(P|E)=MARKET PRICE PER SHARE|EPS

PEG RATIO=PROSPECTIVE P|E RATIO|PROSPECTIVE EPS GROWTH

RETURN ON CAPITAL=EBIT(EARNING BEFORE INTEREST AND

TAX|CAPITAL EMPLOYED

NET PROIT=EARNING AFTER TAX(EAT)\SALES

 CURRENT RATIO=CURRENT ASSETS|CURRENT LIABILITY

DEBT EQUITY RATIO=LONG TERM DEBT\SHARE HOLDERS

EQUITY

SHARE MARKET ANALYSIS

GRAPH CHART

HISTORICAL ANALYSIS

REPORT CARD

SCOPE OF THE STUDY

Finance is the life blood of business. To run business , finance is an inevitable

one . so the management of finance is very tough job. Risk involved in managing
finance is also very high. Before taking any decision relating to finance we have to
consider number of factors

Issue of securities to the public through primary and secondary market is

the common mean to raise the capital, needed for carrying business successfully.
And one of the major way to raise capital is Initial Public Offering(IPO)

A series of IPOs are going to flood the market over the next few years. So
many companies are queued up to issue IPOs because Indian primary market has
been dormant so long. In this situation, there have been various conflicting views
about the impact of these IPOs issues would create on the market

On the country, the Initial Public offering (IPO) are expected to bring more
cheer to the market. This view, especially among foreign brokerage firm, is based
on the assumption that with increase in floating stock, more FIIs are expected
invest in the Indian market.

In this controversial situation, the project was undertaken to understand about

the issue and trading of IPOs and to analyze the pros and cons of IPOs among
public. The study is helpful to know the recent trend in new issuing IPOs, how
prices are listed in market, and what precautions are to be taken before investing in
IPO shares

LIMITATION OF THE STUDY

Apart the lots of benefit from this project work, it face some limitation also. They
are specified below

The secondary nature of data has been a constraint for the study

The suggestion and recommendation will hold true only, if there are no significant
changes in the market, which influence price share under study

The time period of the study was not sufficient for a comprehensive study, which is
the major factor for all these limitation of the study

The validity of analysis and suggestion depends on the financial statement and
report card published by the company

CHAPTERISATION

This project report is presented in the following chapters

The first chapter deals with introduction and design of the study

The second chapter contain all the profiles needed for the study

the third chapter highlights brief history off all selected IPO firms

the fourth chapter deals with analysis and interpretation of the study

the fifth chapter brings the findings and suggestions along with conclusion of the
study