Investment Banking –Dilution Management By:- Rahul Magan Group Chief Executive Officer (CEO), Treasury Consulting Pte Ltd Ex Group Corporate Treasurer – EXL Service Holdings, Inc. Corporate Treasurer – HCL Technologies Limited Founder & Angel (Incubator) – Bohemian Editor In Chief – “ The Maverick Treasurer “, “ The Fraudster “

Dilution Management Dilution Management is an art performed by I Bankers where by they would be using all the aforesaid options to increase the holdings of the promoters. Rights Renunciation Preferential Allotment Private Placement Issue of Convertibles Bonus Issues Open Offers Sweat Equity Shares with Differential Rights Delisting of Rights

Types of Underwriting Complete Underwriting Partial Underwriting Safety Net Underwriting Firm Underwriting In this I Bankers would takes complete responsibility of buying complete shares if public wont buy the same. This is done using Security net. This is known as Firm Underwriting. Soft Underwriting In this I Bankers would try and selling the same however if they failed then they wont buy rest of the shares. This is known as Soft Underwriting.

Process of Dilution Management Rights Renunciation Preferential Allotment Private Placement Issue of Convertibles Bonus Issues Creeping Acquisition Shares Buyback Open Offers Sweat Equity Shares with Differential Rights Delisting of shares Dilution Management I Bankers would get the fees of doing all such activities which is known as “Under Writing Commission “. In some Cases Underwriting is paid in cash while in some case it is paid in he form of shares like Warrants. Warrants are noting but Call Options where by I Bankers is having right to Buy agreed amount of shares at agreed prices at an agreed date. In case of I Bankers warrants are issued In the Money (ITM) The following are the actions done by I Bankers to perform Dilution Management. Sometimes I Bankers use them standalone basis or they would use the same as combination.

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