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In India, it is possible to get the share listed without IPO but for SME sector. SEBI recently made necessary amendment
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PROPOSAL IN UNION PROPOSAL IN UNION BUDGET 2013BUDGET 2013 1414BUDGET 2013BUDGET 2013--1414
AGB & PartnersCorporate Counsel & Lawyers
PROPOSAL APPROVED BY SEBIPROPOSAL APPROVED BY SEBI
Start up & SMEpListing Listing
AGB & PartnersCorporate Counsel & Lawyers
OPPORTUNTIESOPPORTUNTIESBetter Visibility
W d I b Wider Investor base
Multiple Funding Multiple Funding Options
EExpenses of listing saved
Transformation of listing of start ups & SME into Institutional Trading Platform
AGB & PartnersCorporate Counsel & Lawyers
“ Institutional trading platform” g p
Means the trading platform in a SMEMeans the trading platform in a SMEexchange for listing and trading ofspecified securities of SME for informedspecified securities of SME for informedinvestors.
AGB & PartnersCorporate Counsel & Lawyers
CONTD…..
“ Small and Medium Enterprise”
Means a public company including start upcompany, that complies with all theeligibility conditions specified ing y pregulation 106Y
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
ELIGIBILITY FOR IPOELIGIBILITY FOR IPOAnyAny oneone ofof thethe followingfollowing ::--
AGB & PartnersCorporate Counsel & Lawyers
ELIGIBILITY FOR IPOELIGIBILITY FOR IPO
AnyAny oneone ofof thethe followingfollowing ::--
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
Possibility of Alternate Fundingi h S ifi i C lwithout Sacrificing Control on
Management
Enticing Informed Investors toparticipate in Emerging GrowthStoryStory
Ready Exit Route to OutsideIInvestors
Cheaper Listing
AGB & PartnersCorporate Counsel & Lawyers
Listing of Securities on Institutional Listing of Securities on Institutional Trading Platform Trading Platform
Listing not to be accompanied by any other issue to public in whatsoever manner.
Compan not to make an IPOCompany not to make any IPO .
Private Placement /Right issuePrivate Placement /Right issue allowed without option for renunciation of the right.
AGB & PartnersCorporate Counsel & Lawyers
PP/Right Issue PP/Right Issue -- ConditionsConditionsReceipt of InReceipt of In--principle approval from principle approval from pp p p ppp p pprecognized stock exchangerecognized stock exchange
SR under sub SR under sub ––section (1A) of section 81 section (1A) of section 81 of Companies Act 1956of Companies Act 1956of Companies Act, 1956.of Companies Act, 1956.
Time span for allotment Time span for allotment –– 2 Months2 Months
Explanatory statement to include :Explanatory statement to include :--PurposePurposeIdentity of Identity of allotteesallotteesNature of securities Nature of securities Nature of securities Nature of securities Price Price Information to be disseminated at Information to be disseminated at least least 15 days prior to General 15 days prior to General body meetingbody meeting
Price not to be less than :Price not to be less than :--Book value as per last audited B/sBook value as per last audited B/sValue as determined by Value as determined by Value as determined by Value as determined by Independent Independent auditor or merchant auditor or merchant bankerbanker AGB & Partners
Corporate Counsel & Lawyers
PP/Right Issue PP/Right Issue -- ConditionsConditions
No option as to renunciation of the rightg
Receipt of In-principle approval from recognized stock exchange
C t di t h l tt fCompany to dispatch a letter of offer to its shareholders through either of the mode.either of the mode.
AGB & PartnersCorporate Counsel & Lawyers
Decline due to lack of funds
Expansion Stage
IPODeveloping Stage
portu
nitie
s
PE Firms hold the hands of SMEs
Growth Stage
al M
arke
t OppStable Profit
Margins
Supported by Venture ng th
e C
apita
Supported by Venture Capital FirmsNascent
Stage
Unl
ocki
nProfitability
High Risk & Lower Profit Margins
Increase in Sales & Rise in Profit
Profit Margin tends to rise as the business expands
AGB & PartnersCorporate Counsel & Lawyers
Expansion Stage PP/ Right Issue
Entry of Informed InvestorsDeveloping Stage
portu
nitie
s
Decline / Delay due to lack of fundsGrowth
Stage
al M
arke
t Opp
Stable Profit Margins
Listing w/o IPO
ng th
e C
apita
Supported by Promoter & promoter’s group
Nascent Stage
Unl
ocki
n
E f I f d
Profitability
Promoter & promoter’s group
Listing without IPO Profit Margin tends to rise as the business expands
Entry of Informed Investors
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
Preparation of Information Document
Application to BSE for listing on ITPApplication to BSE for listing on ITP
Hosting of ID on the website of BSE
In-principle Approval by BSE
Signing of Listing Agreement and OtherDocuments
Listing of Securities after satisfaction ofconditions of Regulation 106Y
AGB & PartnersCorporate Counsel & Lawyers
RISK FACTORSBUSINESS Beneficial
Owners
FACTORS
Directors and KMP R l ti hi
Promotersand KMP Relationship,
Related Transactions
,etc.
Legal Proceedings Declarations
AGB & PartnersCorporate Counsel & Lawyers
Companies Act, 1956 and 2013
SEBI (Listing of SS on ITP) Regulations, 13
SEBI (ICDR) Regulations, 2009
D i i A 1996Depositories Act, 1996
Listing Agreement, Rules & Regulations Laws & Bye LawsRegulations, Laws & Bye Laws of Stock Exchange
AGB & PartnersCorporate Counsel & Lawyers
AGBIANSAGBIANSInitiation of Assignment –Conceptual Clarity AGBIANSAGBIANSConceptual Clarity
Initial Legwork
Initiation
Reconstitution of BOD
Conversion into Public Co.
Issuance of Bonus SharesIssuance of Bonus Shares
Preparation of InformationDocumentDocument
AGB & PartnersCorporate Counsel & Lawyers
Conversion of Sharesf f Ph i lform from Physical toDemat Mode
Completion ofS t i l R dSecretarial Records
Li i ith St kLiaison with StockExchange
AGB & PartnersCorporate Counsel & Lawyers
15 – 25
lacs
AGB & PartnersCorporate Counsel & Lawyers
YYearly Budget would
b d 5 6 lakhbe around 5 -6 lakhincluding theappointment ofCompany secretaryp y y
AGB & PartnersCorporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
1 CHow ?
1.Can some one take over my business
?without my permission?
AGB & PartnersCorporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
2.Can some one interfere in daytoday management of the
?Business ?AGB & Partners
Corporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
3.How new funds will come into
Company?Company?
AGB & PartnersCorporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
4 Do I need to pay capital gain tax 4.Do I need to pay capital gain tax
di t t ft li ti ?on my divestment after listing ?AGB & Partners
Corporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
5.What will happen if some one acquires 11 % equity in one
Company ? 11%
EquityAGB & Partners
Corporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
6.What will happen if some one6.What will happen if some one
accumulate 26 % of the equity ?accumulate 26 % of the equity ?AGB & Partners
Corporate Counsel & Lawyers
SOME FAQ’sSOME FAQ’s
How ?
7.Can I delist after some time ?Delist
List
AGB & PartnersCorporate Counsel & Lawyers
AGB & PartnersCorporate Counsel & Lawyers
Email : [email protected]