3.9 Process Of Public Issue


The major activities involved in making a public issue of securities before it is launched are as follows:

  1. Preparation Of The Prospectus
    The lead manager is responsible for the preparation of the prospectus, which is a document that disseminates all the information about the company, the promoters, the objectives of the issue, and has the contents as specified by the registrar of company law. The final prospectus has to be forwarded to SEBI and the listing stock exchanges.
  2. Appointment Of The Lead Manager
    Before making a public issue of securities the firm should appoint a SEBI-registered merchant banker to manage the issue as a lead manager. He/she is then responsible for all the pre and the post-issue activities, liaison with the other intermediaries and statutory bodies like the SEBI, stock exchanges and the registrar of companies (ROC) as also ensure that the securities are listed on the stock exchanges.
  3. Appointments Of Intermediaries
    The other intermediaries who are involved in the public issue of securities are underwriters, registrars, bankers to the issue, brokers and advertising agencies. Apart from these it also involves promotion of the issue, printing and dispatch of prospectus and application forms, obtaining statutory clearances, filing the initial listing application, final allotment and refund activities. The cost of a public issue ranges between 12-15 per cent of the issue size and can go up to 20 per cent during bad market conditions.
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