Nifty 17196.7 (-1.18%)
Sensex 57696.46 (-1.31%)
Nifty Bank 36197.15 (-0.85%)
Nifty IT 35848.05 (-0.86%)
Nifty Financial Services 17779.5 (-1.13%)
Adani Ports 737.45 (-0.22%)
Asian Paints 3110.45 (-2.21%)
Axis Bank 673.00 (-0.46%)
B P C L 385.90 (1.86%)
Bajaj Auto 3287.85 (-1.22%)
Bajaj Finance 7069.25 (-1.55%)
Bajaj Finserv 17488.70 (-1.52%)
Bharti Airtel 718.35 (-1.94%)
Britannia Inds. 3553.75 (-0.69%)
Cipla 912.05 (-1.00%)
Coal India 159.75 (0.28%)
Divis Lab. 4757.05 (-0.42%)
Dr Reddys Labs 4596.50 (-1.42%)
Eicher Motors 2455.55 (0.16%)
Grasim Inds 1703.90 (-1.16%)
H D F C 2771.65 (-1.29%)
HCL Technologies 1171.40 (-1.12%)
HDFC Bank 1513.55 (-0.80%)
HDFC Life Insur. 690.95 (-2.03%)
Hero Motocorp 2462.45 (-0.41%)
Hind. Unilever 2343.65 (-1.66%)
Hindalco Inds. 424.65 (-1.72%)
I O C L 122.20 (1.28%)
ICICI Bank 716.30 (-0.84%)
IndusInd Bank 951.15 (0.59%)
Infosys 1735.55 (-0.73%)
ITC 221.65 (-1.69%)
JSW Steel 644.55 (-0.34%)
Kotak Mah. Bank 1914.20 (-2.55%)
Larsen & Toubro 1801.25 (0.67%)
M & M 836.95 (-1.48%)
Maruti Suzuki 7208.70 (-1.59%)
Nestle India 19321.35 (-0.93%)
NTPC 127.00 (-1.32%)
O N G C 145.90 (1.32%)
Power Grid Corpn 206.10 (-3.92%)
Reliance Industr 2408.25 (-3.00%)
SBI Life Insuran 1165.95 (-1.86%)
Shree Cement 25914.05 (-1.43%)
St Bk of India 473.15 (-0.81%)
Sun Pharma.Inds. 751.80 (-1.89%)
Tata Consumer 774.30 (0.14%)
Tata Motors 480.10 (0.21%)
Tata Steel 1118.00 (0.50%)
TCS 3640.45 (-0.07%)
Tech Mahindra 1593.30 (-2.23%)
Titan Company 2369.25 (-0.72%)
UltraTech Cem. 7332.45 (0.13%)
UPL 712.75 (2.08%)
Wipro 640.75 (-0.94%)

SJS Enterprises Ltd IPO - Information Note

SJS Enterprises Ltd IPO - Information Note
by 5paisa Research Team 30/10/2021

SJS Enterprises Ltd, a leading player in the decorative aesthetics industry, proposes to come out with an IPO of Rs.800 crore. The issue opens on 01-November and closes for subscription on 03-November. The entire issue will be an offer for sale so there will be no fresh funds coming into the company nor any dilution of equity. It will only provide an exit to the existing early investors and provide a basis for stock market valuation.

SJS Enterprises Ltd offers a plethora of such aesthetic products including 2D and 3D appliques and dials, 3D lux badges, domes, overlays, aluminium badges, in-mould labels, lens mask assembly, chrome plate printing etc. SJS Enterprises Ltd essentially caters to the automotive and the consumer durables segment.
 

Key terms of the IPO issue of SJS Enterprises Ltd
 

Key IPO Details

Particulars

Key IPO Dates

Particulars

Nature of issue

Book Building

Issue Opens on

01-Nov-2021

Face value of share

Rs.10 per share

Issue Closes on

03-Nov-2021

IPO Price Band

Rs.531 - Rs.542

Basis of Allotment date

10-Nov-2021

Market Lot

27 shares

Refund Initiation date

11-Nov-2021

Retail Investment limit

13 Lots (351 shares)

Credit to Demat

12-Nov-2021

Retail limit - Value

Rs.190,242

IPO Listing date

15-Nov-2021

Fresh Issue Size

Nil

Pre issue promoter stake

98.86%

Offer for Sale Size

Rs.800 crore

Post issue promoters

50.37%

Total IPO Size

Rs.800 crore

Indicative valuation

Rs.1,650 crore

Listing on

BSE, NSE

HNI Quota

35%

QIB Quota

50%

Retail Quota

10%

 

Data Source: IPO Filings
 

Here are some of the key merits of the SJS Enterprises Ltd business model


1) SJS is one of the leading players in the decorative aesthetics segment

2) It straddles the complete value chain from design to delivery

3) It supplies over 11.5 crore parts to over 170 customers across 20 countries

4) The ten largest customers of SJS have been loyal leaders for over 15 years

5) ROCE of 31.6% makes it a very niche value play in the segment

6) OEMs account for 66%-68% of total revenues, making it a stable business model

7) Free cash flow to EBITDA of 57% and Free cash flow to PAT of 96% makes it a very healthy profitability and cash flow scenario for SJS Enterprises Ltd
 

Check - SJS Enterprises IPO - 7 Things to know
 

How is the SJS Enterprises Ltd IPO structured?


The SJS Enterprise IPO will be a total offer for sale where the promoters will be diluting their stake through the issue. Here is a gist of the IPO offer of the company.

A) The OFS component will comprise of the issue of 147.60 shares and at the peak price band of Rs.542, the OFS value would be Rs.800 crore which will also be the size of the total IPO issue.

B) Out of the total OFS of Rs.800 crore, Evergraph Holdings Pte Ltd, the promoter company will sell shares worth Rs.710 crore while one of the promoters, Mr. K A Joseph will shares worth Rs.90 crore.

The promoter holdings will get substantially diluted post the OFS and the public will end up with 49.63% shares with promoters holding 50.37% shares post the issue.
 

Key Financial parameters of SJS Enterprises Ltd
 

Financial Parameters

Fiscal 2020-21

Fiscal 2019-20

Fiscal 2018-19

Sales Revenues

Rs.251.62 cr

Rs.216.17 cr

Rs.237.25 cr

Net Profit

Rs.47.77 cr

Rs.41.29 cr

Rs.37.60 cr

Net Worth

Rs.315.22 cr

Rs.279.65 cr

Rs.238.56 cr

Net Profit Margins

18.98%

19.10%

15.85%

ROCE

31.63%

26.44%

28.28%


Data Source: Company RHP

The net margins and the ROCE hint at solid financials and have also been consistently growing over time. The EBITDA margins above 31% hint at profitable operations and that is evident from the strong customer franchise built by the company.

Also, being an OFS, there will be no dilution of equity, which shows the ability of the company to self-fund growth from internal resources.
 

Investment Perspective for SJS Enterprises Ltd
 

Being a total OFS, the issue of SJS Enterprises Ltd will not result in dilution of equity and hence shareholders earnings will be protected. Here are some merits.

a) In the kind of decorative aesthetics business that SJS is into, long term relations matter a lot. That is where the OEM links of SJS can be value accretive.

b) The design to delivery approach means that SJS Enterprises Ltd straddles the entire value chain. That gives them greater control over inputs and output as well as costs.

c) It counts among its OEM customers marque global names and domestic names like Suzuki, ,M&M, John Deere, Volkswagen, Honda, Bajaj Auto, Ashok Leyland, TVS Motors, Marelli, Whirlpool, Panasonic, Samsung, Eureka Forbes, Godrej and the list goes on.

d) Share of exports have been growing from 9.8% to 16.1% over the last 2 years. That is a good approach to de-risk the model from the Indian consumer market.

If one looks at the valuations in P/E terms, the stock is quoting at 35X historic earnings and around 31X forward earnings assuming CAGR growth rates sustaining. That is a reasonable level to pick up a stock with leadership position in its niche.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

IRCTC Asked to Share 50% Convenience Fee

IRCTC Allowed to Retain 100% of Convenience Fee
by 5paisa Research Team 30/10/2021

In a high level meeting between the top officials of the IRCTC and the Railway Board, the Ministry of Railways decided to withdraw the decision to ask IRCTC to share 50% of the convenience fee charged from customers on online ticketing. The new rule was to be effective from 01-November but now stands withdrawn.

The secretary of DIPAM, the disinvestment body, Mr. Tuhin Kant Pandey clarified that the decision to ask IRCTC to share 50% of the convenience fee on railway ticketing with the government had been scrapped. This is a major source of revenues for IRCTC and is charged over and above the price of the ticket to finance the online interface.

It was a volatile trading day for IRCTC on the bourses. The stock opened weak on Friday after it had closed at Rs.913.75 on Thursday. However, once the implications of the 50% sharing became evident the stock dropped all the way to Rs.650 on the BSE, a fall of nearly 29% from previous close. However, after the clarification hinted by the government, the stock bounced back and closed at Rs.845.65, still with a loss of 7.45%.

In terms of market cap loss, IRCTC has already lost 33% falling from Rs.100,000 crore in early October to Rs.67,000 crore currently. Even after this sharp fall, the stock quotes at a P/E ratio of 49X and a price to book value of 9.97. Here is why the 50% share could have been significant hit on the numbers of IRCTC.

Sharing of convenience fee is nothing new. The convenience fee was shared 20:80 in FY15 and in that year convenience fees had generated Rs.253 crore. In the next year, the sharing arrangement was moved to 50:50 and the total convenience fee related revenues was Rs.562 crore. Between 2017 and 2019, the convenience fee practice was discontinued.

In the year 2019-20, IRCTC re-introduced the convenience fee to compensate for some of the losses caused by COVID lockdowns. However, at that point, the Railways waived off its share and IRCTC was allowed to retain the full amount of Rs.352 crore in 2019-20 and Rs.299 crore in 2020-21. In the first 5 months of FY22, IRCTC has already earned Rs.224 crore as convenience fee.

The moral of the story is that the 50:50 sharing would have been a huge revenue and profit dent for IRCTC. That has now been set to rest with the Railways confirming that there will be no convenience fee sharing for now.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

SEBI comes out with New Trading Guidelines for MF Employees

SEBI comes out with New Trading Guidelines for MF Employees
by 5paisa Research Team 30/10/2021

In the light of the Templeton fiasco last April and the subsequent SEBI order on the role ostensibly played by the senior managers of the fund, SEBI has opted to tighten the screws. It has barred employees and directors of AMCs and trustees of the fund from buying or selling units when having non-public information like pertaining to winding up of schemes.

In the case of Templeton, which had shut down 6 funds citing illiquidity, it was later found that the senior managers and their family members had redeemed units of the fund just ahead of the winding up announcement. That was a clear case of misuse of information at the cost of existing unit holders and SEBI wants to tighten the screws on this side.

The complete list of dos and don’ts are expected to be communicated explicitly to the funds. However, for starters it does appear like any connected person having some degree of inside information about the change in investment objectives, major defaults, major liquidity crisis in the fund, major redemptions etc must not indulge in buying and selling units of these funds.

Currently, the code of conduct for mutual fund directors, employees, fund managers and traders only extend to the actual buying and selling of underlying shares. There is no mention of the transactions on mutual fund units. Under the new dispensation, such rules and code of conduct will extend to the units of the specific fund too.

For example, currently employees of the fund are only required to report to the compliance officer about any purchases or sales of stocks on a regular basis. However, going ahead, they will also have to report any buying and selling in units of the mutual fund to ensure that there is no trading ahead of any news flow. Such compliance reporting will have to happen on a weekly basis.

The idea is to ensure that the interests of the key employees of the mutual fund are aligned with the long term interests of the unit holders of the fund. Under this alignment principle, a stipulated percentage of compensation shall be paid in units of the mutual fund to ensure skin in the teeth for these personnel.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Looking for Value Investing? Find Out Cheap Shares to Buy Here!

share market stock
by 5paisa Research Team 01/11/2021

Since the Indian stock market has recovered from its recent losses and the Sensex and Nifty have hit new highs in this financial year, investors may be interested in searching for investment possibilities.

The ideal strategy, according to theory, is to find the best low-priced shares to purchase right now, while the market is turbulent. These are the stocks that have the potential to become multi-baggers in the future.

Here is a list of the 5 cheap shares to buy in the Indian stock at absolutely throw-away prices. Let’s get right to it!

 

5 Cheap Stocks to buy on the Indian Stock Market


1. South Indian Bank Ltd.


The bank's headquarters are in the Keralan city of Thrissur. A total of 857 branches and 54 ext. counters and 20 regional offices in over 27 states and 3 union territories make up South Indian Bank Ltd. in India. Around 1334 ATMs and 42 bulk note acceptor/cash deposit machines have been set up all across India by this firm.

Financial inclusion is being implemented by South Indian Bank Ltd., which has so far reached over 100 villages and about 15 urban areas throughout the states of Kerala, Andhra Pradesh, Tamil Nadu, and Chhattisgarh and established around 11 unique FLC centers on the bank premises as of March 2019.

In the banking industry, South Indian Bank Ltd. could be an excellent investment if you're searching for long-term profits. This bank has been steadily increasing its performance in retail lending, which is where it plans to concentrate its efforts going forward.

 

2. Sanwaria Consumer Ltd.


As a part of the Sanwaria Group, Sanwaria Consumer Ltd. was formed in 1991 and officially opened for business in 1993. One of India's largest integrated food processing companies, Lt. Shri Ram Narayan Agrawal founded it, is engaged in the production and sale of FMCG products like rice, edible oil, pulses, and sugar, as well as flours like wheat and rice.

For the first time, the business is selling its product directly to consumers by establishing small retail stores called 'Sanwaria Kirana,' which are the size of an ATM. At Mandideep, Itarsi, and Betul, three manufacturing facilities of Sanwaria Consumer Ltd. are strategically situated in the Indian consumer food production and consumption belt. The business is also active on the international market, importing and exporting a wide range of goods.

3. Vodafone Idea Ltd.

With a mission to "deliver world-class digital experiences to connect and inspire every Indian to achieve a better future," Vodafone Idea Ltd. is one of India's biggest telecommunications providers. As of August 31, 2018, Vodafone India and Idea Cellular were amalgamated into one company, although the combined company continues to use both the Idea and Vodafone brands.

The Vodafone Group now owns 45.1% of Vodafone Idea Ltd., the Aditya Birla Group owns 26.1%, and the public will own the remaining shares. The merged company is headed by Mr Kumar Mangalam Birla as Chairman and Mr Balesh Sharma as CEO.

4. GMR Infrastructure Ltd.

Bangalore-based GMR Group Ltd. was founded by Grandhi Mallikarjuna Rao in 1978 and specialises in building infrastructure. Several infrastructure projects have been undertaken in India using the Public-Private Partnership (PPP) concept. It began in the agricultural sector by establishing small jute, sugar, brewery, etc. businesses and gradually expanded into the Infrastructure sector during the last decade.

These days, the GMR group's focus is on airports as well as the energy industry as well as transportation infrastructure in urban regions. Aside from Nepal, Indonesia, Singapore, and the Philippines, the GMR Group has infrastructure assets and projects all over the world.

5. Bank of Maharashtra


The Government of India (GOI) owns 87.01 per cent of the Bank of Maharashtra, one of India's largest PSBs. As of March 2018, it serviced more than 15 million consumers spread over 2000 locations around the nation. In addition, it has the most branches of any PSB in Maharashtra.

There were Rs. 15,509.36 Crore in gross non-performing assets (NPAs) declared by the business (17.31 per cent of total assets) and Rs. 1,663.12 Crore in interest income on their own (up 1.19 per cent from last quarter). Due to excessive expenses, the bank recorded a net loss after tax of Rs. 3,764 crore in the third quarter of 2018.

Conclusion

Small-cap stocks, such as those trading under Rs. 20, tend to be more volatile in price than larger-cap companies. Given the massive devastation that the stock has previously through in the recent past, the downside risk is extremely minimal in the majority of instances. So keep in mind that if you hold any of these investments for an extended length of time, you may stand to profit handsomely.

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Top 10 Share Market Investors in India (With Quotes)

 Top 10 Indian Share Market Investors
by 5paisa Research Team 01/11/2021

Stock market participants all have the same hopes and aspirations. Almost everyone aspires to achieve financial success, like the world's wealthiest investors, including Warren Buffet, Rakesh Jhunjhunwala, and Jeff Bezos. Long-term, everyone wants multi-baggers with stock returns of 5x, 10x, or 20x.

In the stock market, like in any other area of your life where you spend your time, patience, money, and so on, identifying such stocks or items is critical. However, this isn't something that everyone can do. So, we have compiled a list of investors and their share market quotes who have made it big in the Indian stock market. Let's get started, shall we?

Top 10 Indian Share Market Investors

1. RadhaKishan Damani

According to the business community, Mr Radhakishan Damani is a wise investor in the Indian stock market who's created a firm that's always working to better understand consumer requirements and provide them with the appropriate solutions.

DMart was developed by Mr Damani, a staunch believer in the foundations of business and strong ethical values, into an effective, big, and lucrative retail chain, which is widely appreciated by customers, partners, and workers alike

One of India's most successful and well-known value investors, Mr Radhakishan Damani, was already well-known. He had a deep knowledge of the Indian consumer market and its psychology thanks to his investment approach.

2. Rakesh Jhunjhunwala

In addition to being known as "India's Warren Buffet" and "The Big Bull," Rakesh Jhunjhunwala is one of India's most renowned and helpful stock market analysts.

Born to a salaried officer, Rakesh entered the stock market after graduating as a contractual bookkeeper. He now trades shares. From a little investment of Rs 5,000, he's already amassed a fortune of around Rs 15,000 crore in assets.

"Rare Enterprises" provides the resources used by Mr Jhunjhunwala. It was an amalgamation of his significant other's name and his own initials, so it was given that name.

Re-kha and Ra-kesh, to be precise. He's presently working at Aptech Limited as an executive. Hungama Digital Media Entertainment Pvt Ltd, another employer, is where he finds employment as well.

3. Ramesh Damani

Investor expert Ramesh Damani, one of India's finest stock market financial professionals, started his wealth-building career when the Sensex was at 600 in the 1990s. Damani graduated from HR College in Mumbai with a bachelor's degree and went on to get a master's in business administration from California State University, Northridge (BBA)

Ramesh Damani Finance Pvt Ltd. is the company he presently interacts with. In 1989, Ramesh Damani, the son of a successful stock market analyst and investor, became a member of the Bombay Stock Exchange (BSE).

Ramesh had planned a career as a stockbroker. Nevertheless, he became a long-term speculator when he started to enjoy selecting successful stocks.

4. Ramdeo Agrawal

The Indian securities and exchanges finance expert Raamdeo Agrawal is well-known in the industry. He also has a lot of faith in the Motilal Oswal Group. In 1995, he pumped money into Hero Honda, a well-known Indian business with a market value of just INR 1000 crores at the time.

For 20 years, Raamdeo Agrawal held onto his Rs 10 lakh investment in the bike maker's shares at a price of Rs 30 per share, until the share price soared to Rs 2,600 per share. HERO has reached a market cap of around 73,000 crores today.

5. Vijay Kedia

Mr Vijay Kedia is an Indian financial expert who makes uncomplicated yet effective investments. He came from a family of stockbrokers and has a lifelong fascination with the financial market.

When he was only 19, he started trading equities on the stock exchange for the first time. He made a lot of money in his early years of trading, but he subsequently had to deal with enormous losses.

He then went out on his own, but this time he was a complete failure. After trading for just around 10 years, he realized he had nothing to show for his efforts and turned his attention to Investing. Mr Kedia discovered that he could make a contribution on his own, since finding out about Investing was possible only via very rare channels.

He started reading newspapers, journals, and annual reports of organizations while he was still in the learning phase of his career as a contributor, and this helped him develop his perspective.

6. Nemish Shah

Among other venture firms in India, Nemish Shah is a key backer of ENAM. He's also one of the country's finest small-time financial investors.

In many ways, Nemish Shah's approach to venture capital is similar to Warren Buffet's. He believes that investing in companies that make money through increasing usage is a sound strategy. Shah's stakes in Asahi India, a car glass manufacturer, have more than tripled in the last three years.

If the return on capital employed (ROCE) is less than 9%, investing in the company is not justified. The most important factor is how the association plans to develop in the future. When marketers raise money all the time, the value diminishes.

7. Porinju Veliyath

Indian stock market investor and retailer Mr Porinju Veliyath is exceptional. As a co-conspirator in his portfolio, he deals with the executive's company Equity Intelligence India Limited.

Mr Porinju Veliyath was born on June 6, 1962, in Kerala, India. Because he was born into a low-income household, he started working at the age of 17 to help support his parents and siblings.

He then relocated to Ernakulum, where he worked as a telephone administrator for the Ernakulum phone trade while doing his LLB at Ernakulam Law College. Since he was a child, he had been fascinated by the stock market. As a result, after graduating, he went to Mumbai to pursue his passion.

8. Dolly Khanna

Dolly Khanna, whose portfolio value was estimated at more than Rs 600 crore in November 2017, overexerted herself in the Indian stock markets a year ago. Rajiv Khanna, who invests in Rain Industries Ltd on behalf of his better half Dolly, has seen a return of over 577 per cent since 2017.

There are also additional multi-baggers in Dolly Khanna's plan, including NOCIL Ltd. (returning 171%) and PPAP Automotive (returning 342%).

9. Ashish Kacholia

Another financial expert renowned for his multi-bagger mid and small-cap selections, Ashish Kacholia, showed his tenacity last year.

NOCIL Ltd is a typical company that Dolly Khanna has in his collection. Nocil Ltd, the world's largest manufacturer of elastic synthetic compounds, has had its 2017 offerings increase by an astounding 172 per cent, as previously mentioned.

Ashish Kacholia's other multi-baggers include KEI Industries, which returned 204%, and APL Apollo Tubes, which returned 116% in 2017.

10. Chandrakant Sampat

Self-taught Sampat has spent decades honing his skill of evaluating business actions rather than what people anticipate from them. By then, it should be obvious that Sampat, who is now 86, is one of the country's most experienced and well-respected financial experts.

Sampat is concerned about the impact of monetary expansion on the world's finite normal assets. The information is missing, but we've shown to be keen.

Conclusion

These are some of the finest stock market investors who have made it big in the Indian stock market. All these individuals have a diversified investment approach and have won accolades for it. You can get a lot of information about choosing the right stock to invest in by analyzing the portfolio of these investors.

 

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order
Next Article

Listing Requirements and Delisting - A Comprehensive Guide

Listing & Delisting: Key Requirements
by 5paisa Research Team 01/11/2021

Listing Requirements and Delisting - A Comprehensive Guide

Given the influx of IPOs, one of the most important concerns for investors is what are the qualifying requirements for an IPO in India. Basically, an IPO is a way for a business to raise money from the market by becoming public.

In FY 20-21, 60 Indian businesses, including small and medium-sized enterprises (SMEs), went public via initial public offerings (IPOs) on the country's two main exchanges, the Bombay Stock Exchange and the National Stock Exchange.

However, despite how accessible these exchanges are to businesses looking to list, there are criteria that must be met in order for a company to be considered for listing. Today, we'll examine the requirements for filing an IPO in India.

To get an IPO, a business must satisfy certain financial and legal criteria, as well as comply with other regulations. Aside from this, the post also discusses the factors that might lead to a stock being delisted from the Indian stock market. Let’s get started.

Eligibility Requirements for Listing a Stock

1. Paid-up Capital

The amount of money a business gets from shareholders in return for IPO shares is known as the paid-up capital. A minimum paid-up capital of 10 crores is required per the qualifying criteria for a business to apply.

Additionally, the company's capitalization (the issue price multiplied by the number of equity shares issued after the IPO) must be at least 25 crores.

2. Offerings to be Made in the IPO

As long as all of the basic criteria are fulfilled, the minimum share price in an IPO may be determined based on the company's post-IPO equity capital.

  • A minimum of 25% of each class of equity shares must be issued if the post-IPO equity share capital is less than Rs. 1600 crore
  • A proportion of equity shares equal to Rs. 400 crore rupees must be issued if the post-IPO equity share capital is more than Rs. 1600 crore but less than Rs. 4000 billion.
  • A minimum of 10% of each class of equity shares must be issued if the post-IPO equity share capital exceeds Rs. 4000 crore.

To avoid being delisted, companies must grow their public ownership to at least 25% within three years of their securities being listed on the market.

3. Financial Eligibility Requirements

  • For the previous three years, the company's net worth (assets minus liabilities) must have been at least Rs. 1 crore.
  • To be eligible, the business must have at least Rs. 3 crore in tangible assets in each of the three years before application. A maximum of 50% of these assets may be kept as monetary assets.
  • The past three years' average operational profit must be at least Rs.15 crore.
  • After changing its name, the business must have made at least half of its previous full-year income from the activity represented by its new name;
  • The company's current paid-up share capital must be repaid in full or the shares would be forfeited. The business planning to go public should not have any partially paid-up shares in its stock.

4. Miscellaneous Requirements

If a business wishes to be listed on a stock market, it must submit to the NSE three years' worth of annual reports. In the event that it decides to proceed with the listing criteria,

  • The Board for Industrial and Financial Reconstruction has not been notified about this business. (BIFR).
  • The cumulative losses that resulted in negative net worth have not wiped away the company's value.
  • No court-approved winding-up petition has been received by the business.

What is the Delisting of Shares?

Delisting occurs when a business chooses to stop trading its stock and withdraw its shares from the stock market. Private companies are formed when a public corporation discontinues trading in its common stock.

There is no delisting if a company's shares are accessible on several stock exchange platforms and are only withdrawn from one of them. Delisting refers to the process of removing stock from all stock exchanges where it is no longer possible for investors to trade it. Let's have a look at the various delisting processes.

1. Voluntary Delisting

This occurs when a business, on its own will, chooses to withdraw all of its shares from the market. All shareholders must be paid for all their shares in this kind of transaction. When the business's whole structure changes, a corporation enters voluntary delisting.

This may happen if an investor buys a majority stake in the business and then sells it to the company. Exchange rules may also be a factor, since they may make it difficult for the business to operate properly. Some companies delist all of their shares to keep things running smoothly.

2. Involuntary or Compelled Delisting

Involuntary delisting occurs when a regulator forces a firm to remove all of its shares from the market and put an end to trade. Involuntary or compulsory delisting of a company's shares may occur for a variety of causes or circumstances. Involuntary delisting of shares has a variety of causes, some of which are listed below:

  • Failure to comply with exchange rules may result in a company's delisting without notice.
  • It is necessary to delist stocks for six months when shares have traded inconsistently during the previous three years.
  • Delisting occurs involuntarily if the net value of a business is negative as a result of significant losses suffered in the previous three years.
  • Knowing why a company has chosen to delist helps us better comprehend the implications for shareholders.

Conclusion

Whether it is listing or delisting, there are several criteria that directors of a company need to adhere to. With the surge in IPOs coming in the latest financial year, it is crucial that you are familiar with the right information regarding the standard market practices. Having this information at hand makes you a better investor than you were yesterday. Keep investing! Keep growing!

Open Demat Account

Enter First Name & Last Name
Enter Mobile Number
Enter correct otp
Please enter referal code
Start investing in just 5 mins
Free Demat account, No conditions apply
  • 0%* Brokerage
  • Flat ₹20 per order