Nandini Gureja’s Post

Basis checklist for SMEs considering an IPO 1. Net Tangible Assets: The net tangible assets of the company are not less than INR 3 crore in each of the preceding three full years. 2. Net Profit: The company should have a net profit of at least INR 15 lakh in at least one of the preceding three years. 3. Net Worth: The company should have a net worth of not less than INR 1 crore in each of the preceding three full years. 4. Track Record: The company or its promoters should have a track record of at least three years in the same business. 5. No Mandatory Public Issue: SMEs are not required to have a mandatory public issue if the post issue face value capital is less than INR 10 crores. 6. Mandatory market making: Market making by merchant bankers is mandatory for a minimum period of three years from the date of listing of the SME. 7. Minimum Application Size: Minimum application and trading lot shall be Rs. 1,00,000 in order to ensure that investing in an SME company is more of an informed investment decision and less of a speculative activity. 8. Issue Process: The issue process is 100% underwritten and full amount of issue size is kept in an escrow account. 9. Equity Share Capital: The company's paid-up equity share capital shall not exceed INR 25 crore. 10. Listing Agreement: The company should support Demat securities trading. It must have an agreement with NSDL and CDSL custodians. 11. In-principal Approval: The SME company should obtain in-principle approval from the stock exchange for listing its securities. 12.The leverage ratio of the company should not be more than 3:1 except for finance companies which may have certain relaxation. 13. The SME company needs to submit three years of audited financial reports, along with a certificate from an independent chartered accountant, and any other required regulatory reports. Please note that these are the general requirements. #smeipo #listing #stockexchange

IPO Rush: 41 cos file papers with SEBI (239 issues YTD) 1. Record IPO Filings in September 2024 41 Companies filed their Draft Red Herring Prospectus (DRHP) with SEBI in September. 15 DRHP filings in a single day on September 30, the highest in history. The rush was partly due to the validity of audited financials for the quarter ending March 31, which expired on September 30. 2. Historical Context The previous monthly record for DRHP filings was 34 in September 2010. In August 2021, 27 companies filed DRHPs, and 26 filings occurred in September 2007. March 2010 and September 2021 saw 22 companies file IPO drafts. 3. Reasons for IPO Rush Buoyant secondary markets and strong investor demand are major drivers. Increased domestic fund flows from institutions and retail investors, alongside aggressive participation by foreign institutional investors (FIIs), especially in the primary market. Indian corporates are optimistic about growth, focusing on expanding capacity or engaging in strategic acquisitions. 4. Key IPOs in the Pipeline All Time Plastics IPO: Plans to raise ₹350 crore through a mix of new equity shares and an offer-for-sale. Proceeds will be used for debt repayment, acquiring equipment for a new facility, and general corporate purposes. Scoda Tubes IPO: Aiming to raise ₹275 crore for expanding production capacity of seamless and welded tubes and pipes, working capital needs, and general corporate purposes. The company is a prominent Indian maker of stainless steel pipes and tubes. Dev Accelerator IPO: Targeting to raise funds through the issuance of 24.7 million equity shares. Proceeds will go towards capital expenditure, repayment of certain borrowings, and corporate purposes. A leading flex space operator with a presence in Tier-1 and Tier-2 Indian cities. 5. IPO Market Performance in 2024 So far in 2024, 62 companies have raised ₹64,485 crore through IPOs. This marks an increase from ₹49,436 crore raised by 57 companies in 2023. 120 companies have filed DRHPs in the first nine months of 2024, compared to 112 in 2023, 89 in 2022, and 126 in 2021. 6. What’s Driving the IPO Surge? Strong business prospects, improved equity capital market outlook, and sustained domestic liquidity are encouraging companies to go public. Foreign inflows and investor confidence in India's growth potential are key contributors to the IPO boom.

Manba Finance IPO Overview: Manba Finance shares had a strong market debut on September 30, 2024, listing at ₹145 on the NSE, which is 20.83% higher than its IPO price of ₹120. On the BSE, shares opened at ₹150, a 25% increase. The IPO, valued at ₹150.84 crore, was available for subscription from September 23 to September 25 and was priced between ₹114 and ₹120. It attracted significant interest, with a subscription rate of 224.05 times. Retail investors subscribed 143.95 times, while Non-Institutional Investors (NII) and Qualified Institutional Buyers (QIBs) had subscriptions of 511.62 times and 148.55 times, respectively. The IPO consisted of a fresh issue of 1.26 crore shares, with a minimum application size of 125 shares (₹15,000 investment). The allotment date was September 26. Manba Finance, established in 1998, is a non-banking finance company (NBFC) providing loans for vehicles, small businesses, and personal needs. The company saw a 44% revenue increase and a 90% rise in profit for the fiscal year ending March 31, 2024. #Manbafinance #IPO #Investment #Investors #Stocks

📢 Important Update: Tax Implications on Buyback of Shares for Shareholders in India with effect from October 1, 2024 :- ✔ Entire amount received by shareholders from buybacks will be treated as dividend income. ✔TDS will be deducted by the company at the rate of 10%, in case of payment to resident individuals (provided the buyback proceeds are equal to or exceed Rs 5,000). ✔Cost of acquisition of shares (purchase cost) tendered in a buyback will be treated as a capital loss (either short term or long term) for shareholders, which can be offset against other capital gains or carried forward for up to eight years. #taxation #directtax #equitymarket #incometax #knowledgesharing #financialliteracy #budget

Read this on taxation of buyback: The entire amount received on buy-back of shares would now be taxed as dividends in the hands of investors at ordinary rates as against the 20% buyback tax rate. The cost of acquisition of shares bought back will be considered as a capital loss, which will be eligible for set-off against other capital gains or carry forward. This makes the taxation of buyback more complex because the benefit of capital loss will be available only in future when the investor has earned other capital gains,” To give example : Earlier Buyback was charged in hands of company at 20% tax rate ...So if company had issued shares at Rs.50 10 years back and buyback was done at 500 after 10 years, 20% *(500-50)=90 was paid as buyback tax by company.. Nothing was paid by shareholder , it was Nil.... Now if company announces buyback, you will have to pay tax at Slab rate on entire 500 as Dividend tax and Rs.50 will be considered as Capital Loss to be set off against capital gains in next 8 years

Tax कैसे लगेगा IPO के listing gains पर India में - IPO listing gain पर income tax के नये rate क्या है? - Tax on IPO listing gain calculation Read: https://lnkd.in/dSNA9wDJ #incometax

Latest News Once the allotment is finalized, investors can check the allotment status of the Manba Finance IPO by visiting the official websites of either BSE, NSE, or Link Intime

𝗖𝗵𝗮𝗽𝘁𝗲𝗿 𝟭𝟱/𝟯𝟬 𝗧𝗵𝗲 𝗥𝗼𝗹𝗲 𝗼𝗳 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 𝗮𝗻𝗱 𝗜𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝘀 In India there are 𝟭.𝟲 𝗠𝗶𝗹𝗹𝗶𝗼𝗻 registered corporations and around  𝟲𝟬𝟬𝟬 trade on Stock exchange   In the US there are around 𝟲 𝗠𝗶𝗹𝗹𝗶𝗼𝗻 corporations and round 𝟭𝟬𝟬𝟬𝟬  trade on Stock Exchange Whenever any 𝗖𝗼𝗺𝗽𝗮𝗻𝘆 𝗽𝗹𝗮𝗻𝘀 𝘁𝗼 𝗴𝗼 𝗽𝘂𝗯𝗹𝗶𝗰 (𝗜𝗣𝗢) the following are the broad steps which are carried out : 1.    Corporations hire an 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗕𝗮𝗻𝗸 (𝗨𝗻𝗱𝗲𝗿𝘄𝗿𝗶𝘁𝗲𝗿 [𝗨𝗪] of the IPO process), some companies choose 1,2 ofr 3 UWs 2.    These UWs fill up the 𝗦𝟭/𝗗𝗥𝗛𝗣 𝗳𝗼𝗿𝗺 𝗮𝗻𝗱 𝘀𝘂𝗯𝗺𝗶𝘁 𝗶𝘁 𝘁𝗼 𝘁𝗵𝗲 𝗦𝗘𝗖 (𝗗𝗥𝗛𝗣 𝗳𝗼𝗿𝗺 𝗮𝗻𝗱 𝘀𝘂𝗯𝗺𝗶𝘁 𝗶𝘁 𝘁𝗼 𝗦𝗘𝗕𝗜), till the time SEC/SEBI declares the filled S1(DRHP) as 𝗘𝗙𝗙𝗘𝗖𝗧𝗜𝗩𝗘 3.    This period of time between the filled S1(DRHP) and it getting effective is called 𝗪𝗮𝗶𝘁𝗶𝗻𝗴 𝗣𝗲𝗿𝗶𝗼𝗱/𝗤𝘂𝗶𝗲𝘁 𝗣𝗲𝗿𝗶𝗼𝗱/𝗥𝗲𝘃𝗶𝗲𝘄 𝗣𝗲𝗿𝗶𝗼𝗱. 4.    There is a list of activities which SEC/SEBI permit in this quiet period to advertise for the company’s IPO 5.    Generally, the companies do 𝗥𝗼𝗮𝗱 𝗦𝗵𝗼𝘄𝘀  etc where the senior leadership of the firm talks about the initiatives and the vision of the company 6.     Once the SEC/SEBI makes the S1/DRHP effective, the company finalizes the I𝗜𝗣𝗢 𝗽𝗿𝗶𝗰𝗲 𝗯𝗮𝗻𝗱 𝗮𝗻𝗱 𝗼𝘁𝗵𝗲𝗿 𝗱𝗲𝘁𝗮𝗶𝗹𝘀. 7.    The IPO is opened to the public, and investors can subscribe to the shares. The company and underwriters manage the allocation of shares based on demand 𝗙𝗼𝘂𝗹𝘀 𝗱𝗲𝘁𝗲𝗰𝘁𝗲𝗱 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝗮 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 Whenever there is a foul detected against a company, 𝗦𝗘𝗖/𝗦𝗘𝗕𝗜 𝘁𝗮𝗸𝗲𝘀 𝗲𝗻𝗳𝗼𝗿𝗰𝗲𝗺𝗲𝗻𝘁 𝗮𝗰𝘁𝗶𝗼𝗻𝘀 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗮𝗻𝗱 𝗦𝗘𝗖/𝗦𝗘𝗕𝗜 𝘀𝗲𝗻𝗱𝘀 𝗪𝗲𝗹𝗹𝘀 𝗡𝗼𝘁𝗶𝗰𝗲/𝘀𝗵𝗼𝘄 𝗰𝗮𝘂𝘀𝗲 𝗻𝗼𝘁𝗶𝗰𝗲 to the important people/company and informs the recipients of the alleged violation. It provides them an opportunity to explain or defend their actions before any enforcement action is taken. #Leadership #PersonalFinance #ShivWrites #LinkedInCommunity #USA #India #StockMarket

IPO is expensive. Its not as simple and straight forward as it seems from the outside. Any founders looking to take their companies public should know this. Although the total cost varies based on factors like the size of the company, the market, and the level of preparation required but here's an estimation. [1] Underwriting fees - Investment banks typically charge an underwriting fee of 4-7% of the gross proceeds raised. This is one of the largest costs, as banks help with pricing, promotion, and selling the shares. [2] Legal fees - Legal costs can range from ₹1 crore to ₹10 crore (or more), depending on the complexity of the IPO. These fees cover compliance with regulatory bodies, drafting the prospectus, and ensuring adherence to securities laws. [3] Accounting & auditing fees - Comprehensive financial audits are required, often costing ₹50 lakh to ₹5 crore. These audits ensure that the financials are transparent and accurate for gaining investor confidence. [4] Regulatory & filing fees - Filing with stock exchanges and regulatory authorities incurs fees that can range from ₹10 lakh to ₹1 crore, depending on the listing venue and market size. [5] Marketing & roadshow costs - Promoting the IPO to potential investors involves roadshows, media and marketing expenses, which can add up to ₹50 lakh to ₹2 crore. This step is essential for building demand and ensuring a successful listing. [6] Other Costs - Additional costs include printing the prospectus, fees for public relations, and expenses related to consultants and advisors. These can range from ₹10 lakh to ₹1 crore or more. In total, IPO costs can amount to anywhere between 10-15% of the funds raised in the IPO. For example, if a company raises ₹1,000 crore, it might end up spending around ₹100-150 crore on the IPO process. This substantial expense is the reason why companies only go public when they are confident in their growth trajectory and the potential for long term gains. #IPO

Today Let’s Understand Equity Equity in simple words is the shares of the company. When a person buy share of the company he is buying ownership in the company and entitled to the rights in the company like profit sharing, voting rights. When you get a percentage ownership in company it is common equity. When you get additional rights in dividends, liquidation right they are know as preferred equity. The equity shareholder capital is found in the balance sheet on the liability side. This is because the company use the equity capital to run business and in return the equity shareholder is entitled to get his share of profit according to his equity share held when business makes profit. It is also important to note that equity shareholder are the last to get there money from the business because whenever a company has made the decision to liquidate there asset the company first pay off its debts and the leftover money is shared to equity shareholder according to the type of equity the shareholder has held. Formula to calculate Equity shareholder is: Shareholder equity =Total Asset – Total Liabilities Whenever the company decide to retain the profits into the business and not share the profit with equity shareholder in the form of dividend the retained profit becomes the part of shareholder equity capital. Note: Equity as a asset has the highest risk because the value of equity depends on several factors like business performance, sector performance, economic factors etc. and not just on the business.  Example of how shareholder get’s there part of profit: A equity shareholder gave 1 lakh Rs with a share price of 100 Rs.  Number of shares issued to shareholder is 1000 shares (100000 /100). After 1 year the company makes a profit of 1.2 lakh Rs. Now the investor share value is 120 Rs. The extra 20 Rs per share is the profit the investor received for having a share holding in the company. The total profit the equity share holder gets is Rs 120000(120 *1000). Thanks You Parth Verma Sir. #investmentbanking #finance #valuation #linkedin