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Introduced by SEBI in 1995

Recommendation of Mr. Y.H. Malegam for

optimum price discovery of CorporateSecurities

Share prices are determined on the basis of

demand for the shares at various price levelsin the market

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..a process undertaken by which a demand

for the securities proposed to be issued by abody of corporate is elicited and built up andthe price for such securities is assessed forthe determination of the quantum of suchsecurities to be issued by means of a notice,

circular, advertisement, document orinformation memoranda or offer document..

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The issuer discloses a price band in the RedHerring Prospectus

A 20 % price band is offered by the issuerwithin which investors are allowed to bid andthe final price is determined by the issueronly after closure of the bidding

50 % of shares offered are reserved for QIBS,

35 % for small investors and the balance forall other investors

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Book building mechanism helps smallinvestors to subscribe to securities at aprice, which is arrived at by atransparent process

During the period for which the bookfor the offer is open, the bids arecollected from investors at variousprices within the price band

The issue price is determined after thebid closure based on the demandgenerated in the process

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After the bidding process is complete,on the basis of the demands receivedat various price levels within the priceband specified by the issuer, BookRunning Lead Manager (BRLM) in closeconsultation with the issuer arrives at aprice at which the security offered bythe issuer, can be issued

The final prospectus with all the detailsincluding the final issue price and theissue size is filed with ROC, thuscompleting the issue process. Only the

retail investors have the option of

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stands for Draft Red Herring prospectus

Filed with SEBI and the Exchanges

Issued in accordance with Section 60B of theCompanies Act

Does not contain complete particulars of theprice at which the Equity Shares are issued andthe size (in terms of value) of this Issue

SEBI makes the DRHP filed by companiesavailable on its website for inviting commentsfrom the public

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Issued in accordance with Section 60B of theCompanies Act

Incorporates all the changes suggested bySEBI

It is filed with ROC at least three days beforethe Bid/Issue Opening Date

Become a Prospectus upon filing with the

ROC after the Pricing Date

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The contains: Purpose of the issue Proposed offering price range Disclosure of any option agreement Underwriter's commissions and discounts

Promotion expenses Net proceeds to the issuing company (issuer) Balance sheet Earnings statements for last 3 years, if

available

Names and address of all officers, directors,underwriters and stockholders owning 10% ormore of the current outstanding stock

Copy of the underwriting agreement Legal opinion on the issue

Copies of the articles of incorporation of theissue.

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