Impact Of Ipo On Indian Economy

925 words - 4 pages

The impact of IPO’s in Indian economy

1) An Introduction to Indian economy.
2) IPO
3) How IPO’s contribute to business development
4) How development in business contribute to Indian economy
5) Reliance IPO’s
6) History and future scope for IPO’s
7) Failure of facebook IPO

(1)
The economy of India is the eleventh largest in the world by nominal GDP and the third largest by purchasing power parity (PPP) The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF. Currently the GDP of India worth 1.676$ trillion and the GDP growth rate was 6.5% for (fy) ...view middle of the document...

From a company prospective, IPO help them to identify their real value which is decided by millions of investor once their shares are listed in stock exchanges. IPO's also provide funds for their future growth or for paying their previous borrowings.

Procedure

IPO’s generally involve one or more investment banks known as "underwriters". The company offering its shares, called the "issuer", enters into a contract with a lead underwriter to sell its shares to the public. The underwriter then approaches investors with offers to sell those shares.

The sale (allocation and pricing) of shares in an IPO may take several forms.

▪ Best efforts contract
▪ Firm commitment contract
▪ All-or-none contract
▪ Bought deal

IPO Grading and IPO Ranking are among the few popular inputs investor's uses before applying in initial public offerings IPO.
IPO Ratings are provided by various financial institutions & independent brokers. Few popular IPO Rating providers in India are Capital Market, Money Control, S P Tulsian's IPO recommendations etc.
IPO Grading is provided by SEBI approved rating agencies including CRISIL, CARE and ICRA. IPO Grading is designed to provide investors an independent, reliable and consistent assessment of the fundamentals of IPO Issuer Companies. 

(3) The global IPO (Initial Public Offering) market continued its downward trend in the second quarter of 2012, reporting fourth consecutive period of declining deals in nearly every corner of the world. During the first half of 2012, the IPO market experienced a slump as uncertain global economic prospects and the debt crisis in euro zone dented investor confidence, according to a report by Ernst & Young released in June 2012.Global IPO volume during the first half of 2012 was $57.7 billion through 385 deals, approximately 50 percent lower than $115 billion raised through
765 deals in the same time period of 2011. Despite the Facebook IPO of $16 billion, which accounted for 40 percent of global IPO volume, the global IPO. market in the first half of 2012 experienced the...

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