StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Pricing Strategies of Indian Initial Public Offering - Essay Example

Cite this document
Summary
This study investigates the initial and long-run performance of 100 IPOs listed on the BSE and NSE between 2000 and March 2006. For measuring whether an IPO is under priced or not, the return on the first day of trading in relation to the offer price is taken. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.6% of users find it useful
Pricing Strategies of Indian Initial Public Offering
Read Text Preview

Extract of sample "Pricing Strategies of Indian Initial Public Offering"

Download file to see previous pages

The costs of undertaking an IPO are very large and as such companies prefer using another method herein referred to as private placements. This is partly because the costs of a placing are far lower than an offer for sale, and partly it is because in 1996 the Stock Exchange scrapped its rule requiring that new issues worth more than £50m should offer a proportion to the public(Global-Investor 2008). With the introduction of the book-building process, and the scrapping of the concept of par value for shares, the pricing process has become more open.

It is now possible to follow the fixed price route or the book-building route for an issue. In case of the book-building process, the price is not fixed, but a price band is suggested. The investors can bid for any price between the cap and the floor, and the quantum of subscription. One of the lead managers will work as the book-runner. The final issue price is determined as the cut-off, at which the issue is fully subscribed. The book-building could be used for 75% of the issue, which could be subscribed by institutions and high net worth individuals, and the balance 25% could be issued to individual investors as a fixed price issue, the price being the cut-off determined via book-building.

It is also possible to have 100% book-built issues, where the individual investors also take part in the book-building process. The book-building process can be completely automated (online) using the systems of the stock exchanges. This process is known as e-IPO. The price band at present is 20% i.e. the cap could only be 20% higher than the floor. The price band could be revised during the bidding period, to a maximum of 20% on either side. The public issue should be open for a minimum of five days, and a maximum of ten days.

The post-issue promoter holding should be at least 20%, whereas earlier it was 50% in the case of premium issues. If the price band is revised, the bidding period

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Pricing Strategies of Indian Initial Public Offering Essay”, n.d.)
Pricing Strategies of Indian Initial Public Offering Essay. Retrieved from https://studentshare.org/business/1515043-pricing-strategies-of-indian-initial-public-offering
(Pricing Strategies of Indian Initial Public Offering Essay)
Pricing Strategies of Indian Initial Public Offering Essay. https://studentshare.org/business/1515043-pricing-strategies-of-indian-initial-public-offering.
“Pricing Strategies of Indian Initial Public Offering Essay”, n.d. https://studentshare.org/business/1515043-pricing-strategies-of-indian-initial-public-offering.
  • Cited: 0 times

CHECK THESE SAMPLES OF Pricing Strategies of Indian Initial Public Offering

Buyer Behaviour and Integrated Marketing Communication-Starbucks goes to India

nbsp;… The American Association of Advertising Agencies (AAAA) defines IMC as: 'a concept of marketing communication planning that recognizes the added value of a comprehensive plan that evaluates the strategic role of a variety of communications disciplines - for example, general advertising, direct response, sales promotion, and public relations.... It needs to take stock of Internal as well as External factors which drive its urge for entering indian Coffee space....
9 Pages (2250 words) Literature review

Pricing strategy of ipos and what are the reason behind failure in ipos in india

The Dissertation entitled Under Pricing and After Market Performance- a Study on indian initial public offering is the outcome of my sole effort with the advice and help of many.... The work entitled under pricing and after market performance- A study on indian initial public offering is an attempt to examine the important determinants of under pricing and analyse the behaviour of initial public offering return and after market performance in Indian context.... The researcher takes a sample of 20 indian initial public offering listed on both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)....
40 Pages (10000 words) Essay

Indian Banking Sector

About 92 percent of the country's banking The public sector commercial banks are again divided into three groups – the State Bank group, other nationalized banks and the regional rural banks.... The banking sector is no more limited to accepting deposits from the public and giving out to loans to public.... As competition in the indian banking sector has increased due to deregulation and dilution of government ownership in PSBs, opening up of the banking sector to the private banks and foreign banks, competition has intensified....
12 Pages (3000 words) Essay

Global Marketing: Telstra

These distinct aspects will be visible in many countries including the Asian country of India and thus, those aspects could act as an advantage as well as a challenge for the organisations entering it particularly Telstra, who is planning to enter it with optimum marketing strategies.... Among the many departments, which constitute an organization, the marketing department's role is omnipresent and crucial, as it can only boost an organization through various strategies....
10 Pages (2500 words) Essay

Organizational analysis of the Nike Company

The company needs to design and market multipurpose shoes so that public can use them in wide range of scenarios of life.... This organization analysis paper sample has reviewed the current strategic position of Nike and found that the company is attempting to focus on nations that are in the process of fiscal turmoil....
10 Pages (2500 words) Research Paper

Market Internationalization for McDonalds India

There is no doubt that by a business internationalizing its activities, it often comes with a host of advantages when the business is enjoying some form of success.... On the other hand, it increases marketing planning and control complexity.... With the increasing variety of products… As a result of the global trade patterns that exist, a market crisis is not restricted anymore to one country or local sales region (Rosenbloom 2011)....
12 Pages (3000 words) Essay

Plan for Indian Restaurant - Pearls Valley Restaurant

he proposed name of our new business is Pearls Valley Restaurant which will be an Indian restaurant catering to the needs of indian and Pakistani customers.... he proposed name of our new business is Pearls Valley Restaurant which will be an Indian restaurant catering to the needs of indian and Pakistani customers.... This document, Business Plan for indian Restaurant - Pearls Valley Restaurant, will provide business plan for our proposed business i....
12 Pages (3000 words) Case Study

Marketing Communications: Integrating Offline and Online with Social Media

By taking this step, the America based beverage company which is specialized in offering health drinks to its customers is focusing on the process of entering in to the related energy drinks sector that is existent in a new market sector like India.... As a matter of fact, in an effort to capitalize on the needs of the masses that are existent in the emerging economies like India, the California based Monster Beverage Corporation is focused on the process of generating revenues for its products by catering to the energy drink requirements of the indian market....
24 Pages (6000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us