Public Offers, Mergers and Amalgamations

1. Initial Public Offer(IPO) on Main Board

The IPO process begins on the day the issuing company decides to go public till the listing of the IPO and the post-issue activities. The IPO process in India is a complex and lengthy task. The IPO process is governed by SEBI, the market regulator, which protects the interests of investors and regulates the securities market and related matters. The presence of many IPOs is a sign of a healthy stock market and economy.

The IPO process involves various stages where the prescribed regulations must be followed closely.

We will cover the IPO process in detail by explaining it step-by-step. GAA Consulting

is your one stop window to plan and execute IPO without any hassle.

How GAA Consulting would assist you with IPO ?

Step 1: Merchant Banker (Lead Manager) Appointment

Step 2: Draft Red Herring Prospectus (DRHP) Approval from SEBI

Step 3: IPO Application to Exchanges.

Step 4: Price determination/ IPO pricing method

Step 5: Red Herring Prospectus (RHP) Submission

Step 6: IPO roadshow/ Advertisements

Step 7: IPO Open for Anchor Investor

Step 8: IPO Open for Public

Step 9: IPO Shares Allotment

Step 10: IPO Listing Date Announcement

Step 11: IPO Shares Listing

Step 12: Post-Listing Documents

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2. Further Public Offer (FPO) on Main Board

A Further Public Offering (FPO) on the Main Board is a process through which a company, which is already listed on the stock exchange, issues additional shares to the public. Unlike an Initial Public Offering (IPO), where a private company goes public for the first time, an FPO allows an already listed company to raise additional capital by offering new shares to existing shareholders and the general public.

The FPO on the Main Board involves various steps, including pricing the new shares, preparing the offer document, obtaining necessary approvals, and ensuring compliance with regulatory requirements. It is an effective way for companies to raise funds for various purposes, such as business expansion, debt reduction, acquisitions, or capital expenditure.

The benefits of an FPO include providing existing shareholders with an opportunity to increase their stake in the company, enhancing liquidity in the company’s shares, and bolstering the company’s capital base for future growth.

How GAA Consulting would assist you with FPO ?

Step 1: Assess the Funding Requirements and Objectives of the FPO

Step 2: Prepare the Offer Document, Prospectus, and Letter of Offer

Step 3: Appoint Investment Bankers, Legal Advisors, and Other Intermediaries

Step 4: Price the FPO Shares and Determine the Number of Shares to be Offered

Step 5: File the FPO Application with Regulatory Authorities and Stock Exchanges

Step 6: Conduct Investor Roadshows and Build Investor Interest

Step 7: Obtain Necessary Approvals from Regulatory Authorities and Shareholders

Step 8: Publish the FPO Prospectus and Offer Shares to the Public

Step 9: Monitor Investor Subscription and Allotment of FPO Shares

Step 10: Finalize Share Allotment and Refunds (if applicable)

Step 11: Obtain Stock Exchange Listing Approval for FPO Shares

Step 12: Commence Trading of FPO Shares on the Stock Exchange

Step 13: Comply with Post-FPO Reporting and Disclosure Requirements

Step 14: Implement the Raised Capital for the Intended Purpose

Step 15: Periodic Review and Reporting of Post-FPO Performance.

At GAA Consulting, we understand the complexities involved in an FPO on the Main Board and offer expert guidance to companies throughout the process. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of FPOs.

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3. Preferential Issue by a listed issuer

A preferential issue is a method used by listed companies to raise additional capital by offering shares to a select group of investors, which may include promoters, institutional investors, or qualified institutional buyers (QIBs). Unlike a further public offering (FPO), which involves issuing shares to the general public, a preferential issue is targeted towards specific investors at a predetermined price.

The preferential issue allows the company to raise funds quickly and efficiently, as it does not require the extensive documentation and roadshows associated with an IPO or FPO. It is also a way for promoters and key investors to increase their stake in the company.

Listed issuers must comply with the regulations set forth by the Securities and Exchange Board of India (SEBI) and other relevant authorities when conducting a preferential issue. The process involves obtaining necessary approvals, setting the issue price, and ensuring transparent communication with shareholders and investors.

Steps involved in Preferential Issue by a Listed Issuer

Step 1: Assess the Funding Requirements and Purpose of the Preferential Issue

Step 2: Obtain Approval from the Board of Directors and Shareholders

Step 3: Determine the Number of Shares to be Issued and the Issue Price

Step 4: Identify and Approach Prospective Investors for the Preferential Issue

Step 5: Prepare the Preferential Issue Document and Offer Letter

Step 6: File Required Forms and Documents with the Stock Exchange and SEBI

Step 7: Obtain Necessary Regulatory Approvals for the Preferential Issue

Step 8: Allot Shares to the Investors and Receive Payment

Step 9: Update Company’s Records and Registers

Step 10: Comply with Post-Issue Reporting and Disclosure Requirements

Step 11: Use the Raised Capital for the Intended Purpose

Step 12: Monitor Shareholding Patterns and Investor Response

Step 13: Periodic Review and Reporting of Post-Issue Performance.

At GAA Consulting, we understand the intricacies involved in conducting a preferential issue by a listed issuer and offer expert guidance to companies throughout the process. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of preferential issues.

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4. Rights Issue by a listed issuer

A rights issue is a method used by listed companies to raise additional capital from their existing shareholders. It offers shareholders the opportunity to purchase additional shares in proportion to their current holdings at a discounted price. The purpose of a rights issue is to provide existing shareholders with the chance to participate in the company’s capital raise and maintain their ownership percentage.

In a rights issue, the company issues rights entitlements to its eligible shareholders, allowing them to subscribe to new shares in the company at a predetermined price within a specified timeframe. Shareholders can either exercise their rights and subscribe to the new shares or renounce their rights, allowing other shareholders to subscribe in their place.

The rights issue process involves obtaining necessary approvals, setting the issue price, informing shareholders, and facilitating the share subscription process. It is subject to regulatory requirements set by the Securities and Exchange Board of India (SEBI) and other relevant authorities.

Steps involved in Rights Issue by a listed issuer

Step 1: Assess the Funding Requirements and Purpose of the Rights Issue

Step 2: Obtain Approval from the Board of Directors and Shareholders

Step 3: Determine the Ratio and Issue Price for the Rights Entitlements

Step 4: Prepare the Rights Issue Offer Document and Letter of Offer

Step 5: Inform Shareholders About the Rights Issue and Allocate Rights Entitlements

Step 6: Provide Option for Shareholders to Subscribe or Renounce Their Rights

Step 7: File Required Forms and Documents with the Stock Exchange and SEBI

Step 8: Obtain Necessary Regulatory Approvals for the Rights Issue

Step 9: Allot Shares to Subscribing Shareholders and Receive Payment

Step 10: Update Company’s Records and Registers

Step 11: Comply with Post-Issue Reporting and Disclosure Requirements

Step 12: Use the Raised Capital for the Intended Purpose

Step 13: Monitor Shareholder Response and Subscription Status

Step 14: Periodic Review and Reporting of Post-Issue Performance.

At GAA Consulting, we understand the complexities involved in conducting a rights issue by a listed issuer and offer expert guidance to companies throughout the process. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of rights issues.

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5. Bonus Issue by a Listed Issuer

A bonus issue, also known as a scrip issue or capitalization issue, is a method used by listed companies to reward their shareholders by issuing additional shares without any cost. In a bonus issue, the company converts its reserves, accumulated profits, or surplus into new shares and distributes them among its existing shareholders in proportion to their current shareholding. This results in an increase in the total number of outstanding shares and a decrease in the share price proportionately.

The purpose of a bonus issue is to enhance shareholder value, increase liquidity in the market, and improve the company’s capital base without affecting its financial position. Bonus issues are an effective way to acknowledge shareholders’ loyalty and encourage them to continue investing in the company.

The bonus issue process involves obtaining necessary approvals, determining the bonus ratio, and notifying shareholders about the issuance. It is subject to regulatory requirements set by the Securities and Exchange Board of India (SEBI) and other relevant authorities.

Steps involved in Bonus Issue by a Listed Issuer

Step 1: Assess the Company’s Financial Position and Reserves

Step 2: Obtain Necessary Approvals from the Board of Directors and Shareholders

Step 3: Determine the Bonus Ratio (e.g., 1:1, 1:2, etc.)

Step 4: Notify Shareholders About the Bonus Issue

Step 5: Allocate Bonus Shares to Shareholders

Step 6: Update Company’s Records and Registers

Step 7: File Required Forms and Documents with the Stock Exchange and SEBI

Step 8: Obtain Necessary Regulatory Approvals for the Bonus Issue

Step 9: Adjust the Share Capital and Share Price Post Bonus Issue

Step 10: Comply with Post-Issue Reporting and Disclosure Requirements

Step 11: Monitor Shareholder Response and Impact on Share Price

Step 12: Periodic Review and Reporting of Post-Bonus Issue Performance.

At GAA Consulting, we understand the significance of bonus issues by listed issuers and offer expert guidance to companies throughout the process. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of bonus issues.

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6. Qualified Institutions Placement by a Listed Issuer

A Qualified Institutions Placement (QIP) is a method used by listed companies to raise capital by issuing shares or securities to qualified institutional buyers (QIBs). QIBs include mutual funds, banks, financial institutions, foreign institutional investors (FIIs), and other specified entities. QIP allows companies to raise funds quickly and efficiently from institutional investors without going through the lengthy process of public offerings.

QIPs are subject to regulations set by the Securities and Exchange Board of India (SEBI) and other relevant authorities. The issuing company determines the issue size, price, and terms of the placement, and the shares or securities are offered exclusively to QIBs.

The QIP process involves obtaining necessary approvals, setting the placement price, notifying shareholders, and executing the issuance. It provides a cost-effective way for companies to raise capital for various purposes, such as business expansion, debt reduction, acquisitions, or working capital requirements.

Steps involved in Qualified Institutions Placement by a listed issuer

Step 1: Assess the Funding Requirements and Purpose of the QIP

Step 2: Obtain Approval from the Board of Directors and Shareholders

Step 3: Determine the QIP Issue Size, Price, and Terms

Step 4: Prepare the Placement Document and Offer Letter

Step 5: Identify and Approach Qualified Institutional Buyers (QIBs)

Step 6: Obtain In-Principle Approval from Stock Exchange and SEBI

Step 7: Conduct Roadshows and Investor Meetings

Step 8: File Required Forms and Documents with the Stock Exchange and SEBI

Step 9: Obtain Necessary Regulatory Approvals for the QIP

Step 10: Allot Shares or Securities to QIBs and Receive Payment

Step 11: Update Company’s Records and Registers

Step 12: Comply with Post-Issue Reporting and Disclosure Requirements

Step 13: Use the Raised Capital for the Intended Purpose

Step 14: Monitor Investor Response and Subscription Status

Step 15: Periodic Review and Reporting of Post-QIP Performance.

At GAA Consulting, we understand the intricacies involved in conducting a Qualified Institutions Placement by a listed issuer and offer expert guidance to companies throughout the process. Our experienced team ensures compliance with all regulatory norms, accurate placement execution, and seamless QIP implementation.

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7. Initial Public Offer (IPO) by a Small and Medium Enterprise

An Initial Public Offering (IPO) by a Small and Medium Enterprise (SME) is a significant step towards growth and expansion for these companies. An SME going public through an IPO offers its shares to the general public and institutional investors for the first time, aiming to raise capital for various purposes, such as business expansion, technology adoption, debt reduction, or working capital requirements.

The IPO process for SMEs is tailored to suit their specific needs and regulatory requirements. It involves thorough preparation, adherence to legal norms, and effective communication with potential investors to build investor confidence.

SME IPOs are governed by the regulatory framework set by the Securities and Exchange Board of India (SEBI) and other relevant authorities. These regulations aim to provide a fair and transparent mechanism for SMEs to access the capital market while safeguarding the interests of investors.

Steps involved are as follows

Step 1: Assess the Readiness of the SME for an IPO

Step 2: Conduct Due Diligence and Prepare the IPO Prospectus

Step 3: Appoint Investment Bankers, Legal Advisors, and Other Intermediaries

Step 4: Set the IPO Price and Number of Shares to be Offered

Step 5: File the IPO Application with Regulatory Authorities

Step 6: Conduct Roadshows and Investor Meetings

Step 7: Obtain Necessary Approvals from Regulatory Authorities

Step 8: Publish the IPO Prospectus and Offer Shares to the Public

Step 9: Monitor Investor Subscription and Allotment of Shares

Step 10: Finalize Share Allotment and Refunds (if applicable)

Step 11: Obtain Stock Exchange Listing Approval

Step 12: Commence Trading of Shares on the Stock Exchange

Step 13: Comply with Post-IPO Reporting and Disclosure Requirements

Step 14: Utilize the Raised Capital for the Intended Purpose

Step 15: Periodic Review and Reporting of Post-IPO Performance.

At GAA Consulting, we understand the unique challenges faced by SMEs in the IPO process and offer expert guidance to help them navigate through the complexities. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of SME IPOs.

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To know more about Initial Public Offerings (IPOs) for SMEs, please click here.

8. Further Public Offer (FPO) by a Small and Medium Enterprise

A Further Public Offer (FPO) by a Small and Medium Enterprise (SME) is a method used to raise additional capital from the public and institutional investors after the SME has already been listed on the stock exchange. An FPO provides the SME with an opportunity to expand its capital base and fund growth initiatives.

Unlike an Initial Public Offering (IPO), where a company goes public for the first time, an FPO involves the issuance of new shares to the public and existing shareholders. The existing shareholders have the option to subscribe to the new shares in proportion to their existing holdings, enabling them to maintain their ownership percentage in the company.

The FPO process for SMEs is subject to regulatory guidelines set by the Securities and Exchange Board of India (SEBI) and other relevant authorities. It involves obtaining necessary approvals, pricing the FPO shares, and notifying shareholders about the offering.

Steps involved are as follows

Step 1: Assess the Funding Requirements and Purpose of the FPO

Step 2: Obtain Approval from the Board of Directors and Shareholders

Step 3: Determine the FPO Issue Size, Price, and Terms

Step 4: Prepare the FPO Offer Document and Letter of Offer

Step 5: Inform Shareholders About the FPO and Allocate New Shares

Step 6: Provide Option for Shareholders to Subscribe to New Shares

Step 7: File Required Forms and Documents with the Stock Exchange and SEBI

Step 8: Obtain Necessary Regulatory Approvals for the FPO

Step 9: Allot FPO Shares to Subscribing Shareholders and Receive Payment

Step 10: Update Company’s Records and Registers

Step 11: Comply with Post-Issue Reporting and Disclosure Requirements

Step 12: Use the Raised Capital for the Intended Purpose

Step 13: Monitor Shareholder Response and Subscription Status

Step 14: Periodic Review and Reporting of Post-FPO Performance.

At GAA Consulting, we understand the specific needs of SMEs in the FPO process and offer expert guidance to help them navigate through the complexities. Our experienced team ensures compliance with all regulatory norms, accurate share allotment, and seamless execution of SME FPOs.

To get in touch with us for guidance or advice, please click here.

To know more about Further Public Offerings (FPOs) for SMEs, please click here.

9. Merger and Amalgamation of Companies

Merger and amalgamation are restructuring strategies employed by companies to combine their businesses for various strategic, financial, or operational reasons. These processes involve the consolidation of two or more companies into a single entity, leading to the pooling of their assets, liabilities, and operations. The resulting company becomes the successor, and the merging companies cease to exist as separate entities.

The objective of a merger or amalgamation can vary, such as achieving economies of scale, expanding market share, diversifying product offerings, or streamlining operations. Companies may choose different types of mergers, including amalgamation, absorption, or consolidation, based on their specific goals and structures.

The merger and amalgamation process is governed by the Companies Act, regulatory authorities, and other applicable laws. It requires careful planning, negotiation, and adherence to legal requirements to ensure a smooth and successful integration of businesses.

Steps involved are as follows

Step 1: Assess the Strategic and Financial Objectives of the Merger/Amalgamation

Step 2: Conduct Due Diligence of the Companies Involved

Step 3: Obtain Approval from the Board of Directors and Shareholders of Each Company

Step 4: Appoint Independent Valuers to Determine the Share Exchange Ratio

Step 5: Prepare the Scheme of Merger/Amalgamation

Step 6: File the Scheme with the National Company Law Tribunal (NCLT)

Step 7: Publish the Notice of the Meeting of Shareholders and Creditors

Step 8: Obtain Approval from the NCLT, Shareholders, and Creditors

Step 9: File Required Forms and Documents with the Registrar of Companies

Step 10: Update Company’s Records and Registers

Step 11: Transfer Assets, Liabilities, and Operations to the Resulting Company

Step 12: Obtain Necessary Regulatory Approvals (if required)

Step 13: Comply with Post-Merger/Amalgamation Reporting and Disclosure Requirements

Step 14: Integrate Business Operations and Functions

Step 15: Periodic Review and Reporting of Post-Merger/Amalgamation Performance.

At GAA Consulting, we understand the complexities involved in the merger and amalgamation of companies and offer expert guidance to ensure a seamless and compliant process. Our experienced team assists companies at every stage, from strategic planning to post-merger integration, to achieve the desired outcomes.

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10. Fast Track Mergers and Amalgamation

Fast Track Mergers and Amalgamation is a streamlined process under the Companies Act that allows certain companies to merge or amalgamate quickly and efficiently. This process is available to specific categories of companies, such as wholly-owned subsidiaries, between holding and wholly-owned subsidiary companies, or companies fulfilling certain financial criteria.

The objective of Fast Track Mergers and Amalgamation is to simplify the procedure and reduce the time required for companies to merge or amalgamate, promoting ease of doing business and encouraging corporate restructuring.

To be eligible for the Fast Track process, the companies involved must meet the prescribed criteria and obtain approval from their respective boards of directors and shareholders. Unlike the regular merger process, Fast Track Mergers and Amalgamation do not require approval from the National Company Law Tribunal (NCLT), expediting the overall process.

Steps involved are as follows

Step 1: Assess Eligibility and Criteria for Fast Track Mergers and Amalgamation

Step 2: Obtain Approval from the Board of Directors and Shareholders of Each Company

Step 3: Prepare the Scheme of Fast Track Merger/Amalgamation

Step 4: File the Scheme with the Registrar of Companies (RoC) and Regional Director

Step 5: Publish the Notice of the Meeting of Shareholders

Step 6: Obtain Approval from Shareholders

Step 7: File the Declaration of Solvency with the RoC

Step 8: Inform the Official Liquidator and Registrar of Companies (if applicable)

Step 9: Comply with Post-Merger/Amalgamation Reporting and Disclosure Requirements

Step 10: Integrate Business Operations and Functions (if applicable)

Step 11: Periodic Review and Reporting of Post-Merger/Amalgamation Performance.

At GAA Consulting, we understand the importance of a fast and efficient merger or amalgamation process for eligible companies. Our experienced team assists companies in navigating through the criteria and requirements for Fast Track Mergers and Amalgamation, ensuring a smooth and compliant process.

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