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Equity Shares
By:
Maria Bhalerao
Namrata Tiwari
Neenoy gonsalves
Shanson Paul
Ritesh Shinde
Gaurav Bhansal
Chetan Jadhav
What is Financial Market
A system comprised of individuals and
institutions, instruments, and procedures
that bring toget...
Equity Shares
Equity shares were earlier known
as ordinary shares.
 The holders of these shares are
the real owners of t...
Features of Equity shares
Right to Control
Pre - emptive Right
Owned Capital
Transfer of Shares
Equal Rights
Transfe...
Advantages
No Obligation to pay Dividend
Capital Gain
Limited Liability
Owner of the company
Right Issue
Long term a...
Disadvantages
No Flexibility in capital structure
Speculation
Uncertain and Irregular Income
Trading on Equity not pos...
Types
Authorised share capital
Issued share capital
Subscribed share capital
Paid up share capital
Perference Shares
They have fixed rate of return
They do not enjoy normal voting
rights
These shares are called hybrid
...
Advantages
Appeal to caution investors
No obligation for dividend
No interference
Trading on equity
Disadvantages
Fixed obligation
Limited appeal
Low return
No voting rights
Preference can be traded on stock exchange
Preference shares are quasi-equity instruments that
have limited voting rights...
IPO
• Definition: A company’s first
equity issue made available to the
public.
• This issue occurs when a privately
held c...
Current Example of IPO
Indigo
IndiGo Airlines IPO to open on
October 27, price band Rs 700-765
Indigo lines up IPO to r...
IPO Promotor : Rahul Bhatia & Rakesh Gangwal
Lead Manager: Barclays, citigroup ,JP morgan
Issue Detail:
 »» Issue Open...
CCD
Café Coffee Day plans to raise Rs 1150 crore through
IPO which open on 14, October 2015 and close on 16,
October 2015...
Coffee Day Enterprises is the parent company of the Coffee
Day Group and operates coffee business through a
subsidiary, C...
Issue Detail:
»» Issue Open: Oct 14, 2015 - Oct 16, 2015
»» Issue Type: 100% Book Built Issue IPO
»» Issue Size: Equity S...
What is depository receipts
““a security designed to make investinga security designed to make investing
outside of one’s ...
Types of ADRs
Non sponsored
•Traded on the OTC market
No formal agreement between bank and company
•The underlying compan...
Level 1 sponsored
One bank acts as a transfer agent for the company
Limited reporting requirements with SEC
Periodic fi...
Level 2 sponsored
Under SEC regulation
Must file form equivalent to the U.S. Form 10-k
annually in compliance with GAAP
...
Level 3 Sponsored
Requirements for listing similar to the strictness of a
U.S. company
Form F-1 required, which resemble...
What is GDR
A global depository receipt (GDR), also known
as international depository receipt (IDR), is a
certificate iss...
Novation Process
When buyer becomes seller and
seller became the buyer all this
process is called as novation
process
ADR of HDFC Bank
. HDFC Bank is the second largest private sector
bank in the country (after ICICI Bank) in terms of
asse...
HDFC Bank plans to raise Rs1,500-2,000 crore
through domestic institutional investors and the rest
from foreign investors...
Under HDFC’s proposed sponsored level 1 ADR
programme, up to 10 per cent of its existing paid-up
capital will be converte...
(NOV-9/2015)American Depository Receipts of HDFC Bank
Price
(US$)58.88
Open
(US$)59.14
High
(US$)59.79
Low
(US$)58.11
% Ch...
Conclusion
 Companies come to the stock market in a variety of different ways and for a variety of 
reasons.
 As a priva...
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Equity shares ppt

  1. 1. Equity Shares By: Maria Bhalerao Namrata Tiwari Neenoy gonsalves Shanson Paul Ritesh Shinde Gaurav Bhansal Chetan Jadhav
  2. 2. What is Financial Market A system comprised of individuals and institutions, instruments, and procedures that bring together borrowers and savers.  It help to facilitate:  Price discovery  To raise the capital  Cash liquidity
  3. 3. Equity Shares Equity shares were earlier known as ordinary shares.  The holders of these shares are the real owners of the company.
  4. 4. Features of Equity shares Right to Control Pre - emptive Right Owned Capital Transfer of Shares Equal Rights Transfer of Shares
  5. 5. Advantages No Obligation to pay Dividend Capital Gain Limited Liability Owner of the company Right Issue Long term and permanent capital
  6. 6. Disadvantages No Flexibility in capital structure Speculation Uncertain and Irregular Income Trading on Equity not possible Limited control
  7. 7. Types Authorised share capital Issued share capital Subscribed share capital Paid up share capital
  8. 8. Perference Shares They have fixed rate of return They do not enjoy normal voting rights These shares are called hybrid financing
  9. 9. Advantages Appeal to caution investors No obligation for dividend No interference Trading on equity
  10. 10. Disadvantages Fixed obligation Limited appeal Low return No voting rights
  11. 11. Preference can be traded on stock exchange Preference shares are quasi-equity instruments that have limited voting rights and give specific dividend that is paid out before a company distributes dividend to regular shareholders. According to data compiled from depositories, in the last three years, more than Rs 25,000 crore was raised through preference share issuance by 295 companies. In 2011-12, 147 issuers tapped the market to raise Rs 10,000 crore.
  12. 12. IPO • Definition: A company’s first equity issue made available to the public. • This issue occurs when a privately held company decides to go public • Also called an “unseasoned new issue.
  13. 13. Current Example of IPO Indigo IndiGo Airlines IPO to open on October 27, price band Rs 700-765 Indigo lines up IPO to raise an estimate of 2500 cr Indigo jump 20% in 2 day
  14. 14. IPO Promotor : Rahul Bhatia & Rakesh Gangwal Lead Manager: Barclays, citigroup ,JP morgan Issue Detail:  »» Issue Open: Oct 27, 2015 - Oct 29, 2015 »» Issue Type: 100% Book Built Issue IPO »» Issue Size: Equity Shares of Rs. 10 »» Issue Size: Rs. 1,272.20 Crore »» Face Value: Rs. 10 Per Equity Share »» Issue Price: Rs. 700 - Rs. 765 Per Equity Share »» Market Lot: 15 Shares »» Minimum Order Quantity: 15 Shares »» Listing At: BSE, NSE
  15. 15. CCD Café Coffee Day plans to raise Rs 1150 crore through IPO which open on 14, October 2015 and close on 16, October 2015. It has fixed a price band of Rs 316-328 for the share sale. Following about the IPO:- V G Siddhartha, who is the main promoter as well as Chairman and MD, holds 54.78 percent stake, while all promoters together have 92.74 percent holding in the company.
  16. 16. Coffee Day Enterprises is the parent company of the Coffee Day Group and operates coffee business through a subsidiary, Coffee Day Global Ltd (earlier known as Amalgamated Bean Coffee Trading Company Limited) and its subsidiaries. Company is one of the largest exporters of Indian coffee beans, primarily to Europe, Japan and the Middle East. Axis Bank, Citigroup Global Markets, Edelweiss Capital, Kotak Mahindra Capital, Morgan Stanley India and YES Bank are lead managers of the IPO
  17. 17. Issue Detail: »» Issue Open: Oct 14, 2015 - Oct 16, 2015 »» Issue Type: 100% Book Built Issue IPO »» Issue Size: Equity Shares of Rs. 10 »» Issue Size: Rs. 1,150.00 Crore »» Face Value: Rs. 10 Per Equity Share »» Issue Price: Rs. 316 - Rs. 328 Per Equity Share »» Market Lot: 45 Shares »» Minimum Order Quantity: 45 Shares »» Listing At: BSE, NSE
  18. 18. What is depository receipts ““a security designed to make investinga security designed to make investing outside of one’s home country easieroutside of one’s home country easier
  19. 19. Types of ADRs Non sponsored •Traded on the OTC market No formal agreement between bank and company •The underlying company has no commitment Sponsored Varying degrees of commitment a company can make to the DR Program
  20. 20. Level 1 sponsored One bank acts as a transfer agent for the company Limited reporting requirements with SEC Periodic financials not required Traded on the OTC market Most common way DRs are sold in the U.S.
  21. 21. Level 2 sponsored Under SEC regulation Must file form equivalent to the U.S. Form 10-k annually in compliance with GAAP Listed on U.S. Stock Exchanges like NYSE, NASDAQ, and AMEX Provides more exposure in U.S. markets for company
  22. 22. Level 3 Sponsored Requirements for listing similar to the strictness of a U.S. company Form F-1 required, which resembles the U.S. prospectus Registered with SEC Information on company can be easily found by investors Necessary if company intends to issue new shares in U.S. market
  23. 23. What is GDR A global depository receipt (GDR), also known as international depository receipt (IDR), is a certificate issued by a depository bank, which purchases shares of foreign companies and deposits it on the account. They are the global equivalent of the original American depository receipts (ADR) on which they are based. GDRs represent ownership of an underlying number of shares of a foreign company and are commonly used to invest in companies from developing or emerging markets by investors in developed markets.
  24. 24. Novation Process When buyer becomes seller and seller became the buyer all this process is called as novation process
  25. 25. ADR of HDFC Bank . HDFC Bank is the second largest private sector bank in the country (after ICICI Bank) in terms of asset size. The bank has tripled its share from 1.2% of total non-food credit in FY02 to 4.2% in FY12. Retail assets constituted 51.3% of advances in FY12. Its group companies, HDFC Standard Life (insurance), HDFC AMC (mutual funds) and HDFC Securities (equities) add scalability to the bank's offerings
  26. 26. HDFC Bank plans to raise Rs1,500-2,000 crore through domestic institutional investors and the rest from foreign investors “The other approval we have got is to come up with a level 1 American depositary receipt (ADR) which does not involve the issue of fresh capital. It is just a conversion of existing equity shares into ADR. It creates a larger platform of people who can buy the shares.
  27. 27. Under HDFC’s proposed sponsored level 1 ADR programme, up to 10 per cent of its existing paid-up capital will be converted into ADRs.
  28. 28. (NOV-9/2015)American Depository Receipts of HDFC Bank Price (US$)58.88 Open (US$)59.14 High (US$)59.79 Low (US$)58.11 % Change- 0.59 Volume620,772 Value (US$)36,551, 055 52-Week H/L65.44 / 47.60
  29. 29. Conclusion  Companies come to the stock market in a variety of different ways and for a variety of  reasons.  As a private investor, you can sometimes get an allocation of newly-issued shares, but often the issue will be confined to institutional investors. With internet shares, and the movement towards direct online IPOs, this may change for the better.  Most of the time you will be trading in a company's ordinary shares on the secondary  market.  Companies issue other types of share - notably preference shares, convertibles, and warrants - and even if you don't own them they may have an effect on your dividend entitlement if they dilute earnings.  A scrip issue is designed to improve marketability of ordinary shares, and does not dilute your ownership.  A rights issue is designed to raise more money for the company, and existing shareholders will be invited to buy first. You have a choice about whether to exercise your rights, but if you do not, your ownership may be diluted.

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