1. IPO Readiness and Listing of shares
Private and confidential April 2018

2. IPO considerations

3. IPO considerations Considering an IPO? Why IPO?
Advantages/ disadvantages
Ongoing reporting
Are you ready?
IPO readiness/process
Which market are you eligible for
Business and Tax considerations

4. Issues facing your business
Thinking about an IPO?
Issues facing your business
Scalability
Why IPO?
Financial reporting
procedures
Forecasting
Which market?
Local vs. overseas
Future reporting
requirements
- Eligibility
Transparency of
ownership structure
Resources/timing/
project management
Investment story?
— Suitability
Corporate
governance
Choosing advisors
Management team
Incentivisation/
remuneration
Investor relations
Historical financial
track record
Tax efficient group
structure
Dividend policy
Going public is a long, involved process that represents a significant milestone for any company.

5. Steps to consider when you go public
There are a number of key fundamentals that you should consider
Why IPO?
Which market?
Are you eligible?
Are you ready? 1 2 3
To raise capital for growth
To raise profile and status in the market
To realise the value of the Company
To obtain a broad investor base
To provide an exit strategy for existing shareholders
To be able to use listed shares as an acquisition currency or to reward staff
Regulatory requirement for Indian companies to be listed or in the process of listing in India
Companies can also consider alternative structures for an international listing
Business considerations
India, London, New York, Amsterdam, Singapore etc. If London: Main Market or AIM
The key eligibility criteria differ according to which market you want to list in
Is there growth potential for your products/operations
Has your Company demonstrated that it can be profitable
Is there a robust business plan
Is the promoter group able to contribute additional capital to the Company, if required
Are you prepared to give up Management ‘control’ and invite independent Non-Executive Directors onto the Board
Are you prepared for outside investor/regulator scrutiny and loss of privacy

6. Advantages v/s disadvantages of going public
The advantages
The disadvantages
Companies typically make use of a variety of financing options before they even consider going public.
Going public potentially provides both tangible and intangible benefits, including the following:
Increased capital
Improved financial position
Less dilution than through PE route
Enhanced ability to raise equity
Liquidity and valuation
Improved credibility with business partners
Better employee morale and productivity
Listing improves liquidity for investors
There are also some very significant disadvantages of going public that should be weighed against the many advantages:
Disclosure of information
Demands on management
Pressure to maintain growth pattern
Possible loss of control
Listing regulations
Enhanced corporate governance.
Extensive ongoing reporting requirements
Incurrence of additional cost

7. Business and Tax considerations
Business considerations
Tax considerations
Equity v/s debt
Valuations and dilution of current holding
Impact on operations
Cost of funds
Use of IPO proceeds
Foreign exchange requirements
Enhancement in brand value
Continuing regulatory compliance
Analysing the tax implication of preferring an IPO under the existing structure.
Tax restructuring
Analysing suitable jurisdictions
Deciding on the listing vehicle
Tax treaties between India and other countries
Tax impact on future distributions
Option of seeking advance ruling
Regulatory compliances
Tax implications for shareholders

8. Stakeholders involved
Regulators – SEBI/ ROC/ Others
Investors/ Analyst
Company – Going for listing
Auditors (Previous and current)
Bankers/ Underwrites
Lawyers (India/ International)

9. SEBI Regulations- An Overview

10. ICDR- Listing Requirements
Net tangible assets (excluding intangibles) of at least Rs.3 Crores in each of the preceding 3 years of which not more than 50 % is held in monetary assets;
Average pre-tax operating profits ≥ Rs. 15 Crores during 3 most profitable years out of past 5 years;
Net worth of at least Rs.1 Crore in each of the 3 preceding FY;
The aggregate of the proposed issue does not exceed 5 times the pre-issue net worth of the immediately preceding financial year; and
If name has changed in the last one year, at least 50% of the revenue for the preceding full one year has been earned from the activity indicated by the new name
Issue is made through book-building process with at least 75% of net offer to public being allotted to QIBs if above conditions are not met

11. ICDR-Listing Requirements
Promoters' Shareholding
Public Shareholding
Minimum 20% of post issue shareholding;
Lock-in of minimum promoter’s contribution for 3 years;
Promoter’s holding in excess of 20% shall be locked in for 1 year
Atleast 25% of post issue capital (at offer price) is ≤ INR 1600 Crore;
Atleast INR 400 Crore, if post issue capital (at offer price) is ≥ INR Crore and ≤ INR 4,000 Crore;
Atleast 10%, if the post issue capital is ≥ INR 4,000 Crore
IPO Key Considerations
Alteration in AoA
Pricing of shares
Common form or transfer
Fully paid shares to be free from all lien
Advance call money may carry interest but shall not entitle declaration of dividend
No forfeiture of unclaimed dividends before claims barred by law
option or right to call of shares can be be given only wit with the sanction of the company in general meeting
Price to be determined in consultation with Merchant Banker
Differential pricing for different type of investor allowed subject to certain conditions
If issue size is ≥ INR 500 Crore, Face value may be less than INR 10 but not lower than INR 1
If issue size is < INR 500 Crore, Face value shall be INR 10

12. LODR- Board Governance and Listing Compliances
Board Composition
Constitution of Committees
Various Policies
Independent Directors
One Women Director;
1/2 of the members of the Board be non-executive directors;
1/3rd ID's, if Chairman is non- executive and if Chairman is executive director 1/2 shall be ID's.
A person shall not serve more than 7 companies as ID;
If, a person is serving as WTD in any listed company, he shall not serve as ID of more than 3 companies
Audit Committee;
Nomination and Remuneration Committee;
CSR Committee
Stakeholder Relationship Committee;
Risk Management Committee (Applicable on top 100 listed companies as per market capitalization)
IPO Committee (optional)
Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;
Policy on preservation of documents;
Policy for determining material subsidiaries;
Vigil Mechanism;
Nomination and Remuneration Policy;
Policy on diversity of Board;
Risk Management Policy;
Code of Conduct for Board and Senior Management;
Familiarization Programme;
Policy for determining material events.
Dividend Distribution Policy(Applicable on top 100 listed companies as per market capitalization)
Code of Conduct for Insider Trading Regulations
Code of Fair Disclosures
ID’s to hold one separate meeting in a year without the presence of non-IDs and members of the management of the Company;
IDs in their separate meeting to review:-
Performance of non-IDs and Board;
Performance of the chairperson
the quality, quantity and timeliness of flow of information between the management and the board
The company to familiarize the IDs through various programmes about the Company

13. Disclosures- LODR, Insider Trading and SAST

14. LODR-Public Disclosures
Quarterly results within 45 days
Capital and Debt Restructuring
Issuance, split, consolidation, forfeiture of securities etc.
Disclosure to Stock Exchanges
Revision in Ratings
Agreements/ family settlements impacting change in management
Fraud/defaults by promoters/ KMP and their arrest
Change in Directors, KMP, Auditor & Compliance Officer
Notice, call letters etc. issued to shareholders. General Meeting proceedings.
Amendment of MoA/AoA

15. LODR- Disclosure of outcome of Board Meeting
Dividends and/or cash bonuses recommended or declared or the decision to pass any dividend and the date on which dividend shall be paid/dispatched;
Cancellation of dividend with reasons thereof;
Buyback of securities;
Fund raising proposed to be undertaken;
Increase in capital by issue of bonus shares;
Reissue of forfeited shares or securities, or the issue of shares or securities held in reserve for future issue or the creation in any form or manner of new shares or securities or any other rights, privileges or benefits to subscribe to;
Short particulars of alterations of capital, including calls;
Financial results;
Voluntary delisting
Within
30 minutes to
Stock Exchange
Disclosures

16. SAST- Disclosures under Takeover Code1 2 3
Event Based
Acquisition of ≥5%;
Change of ≥2% after the 5%
Disclosure to be made to Stock Exchange within 2 days
Continual
Persons holding ≥25%;
Every Promoter
Disclosure to be made to Stock Exchange within 7 days of closure of financial year
Encumbered Shares
Encumbrance considered akin to acquisition/ disposal of shares
Include a pledge, lien or any such transaction, by whatever name called.
Convertible security shall also be regarded as shares and disclosures of such acquisitions and holdings shall be made accordingly.
No obligation on the Target Company to give the disclosure to Stock Exchange.

17. Disclosures under Insider Trading Regulations
Initial Disclosures
Disclosure of their holding in the Company by Promoters, Directors and KMPs within 30 days of Listing.
Every KMP, Director or person becoming a promoter shall disclose his holding of securities in Company as on date of appointment/becoming promoter to the Company within 7 days of such appointment.
Continual Disclosures
Every promoter, employee and director shall disclose to the Company the number of securities acquired or disposed of within 2 trading days, if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregate to a traded value in excess of Rs. 10 Lacs;
Company shall notify the particulars of such trading to stock exchange within 2 trading days of receipt of aforementioned disclosures.
Disclosures by other connected persons
The Company may at its discretion require any other connected person or class of connected persons to make disclosure of their holding and trading of securities

18. Roadmap for IPO

19. Roadmap for an Indian IPO
Readiness Diagnostics and preparation
Appointment of Merchant Bankers and other advisors
Due diligence
Compilation of information for and review of offer document
Preparation of restated financial statements including auditors’ report and other certifications
Information for Road shows
Launch of IPO
Receiving bids/applications
Closure of IPO
Review of offer document before and after printing of offer document with price information
Stage 1
Preparation
Stage 3
Marketing and distribution
Unlisted Company
Stage 2
Filings
Listed Company
Filing of draft offer document with SEBI
Responses to SEBI Comments
Filing of offer document with Registrar of Companies in India
Stage 4
Listing and quotation
Allocation and allotment
Obtain Listing Approvals
Listing on stock exchanges

20. Illustrative IPO timeline
Publication of Research Report
Roadshows
Obtain listing and trading approvals
File RHP with ROC
Kick off
Due Diligence & Drafting
Incorporate SEBI comments in RHP
Anchor Investor
Listing
T - 60 T
T + 10
T + 40
T + 50
T + 54
T + 55
T + 76
T + 130
T + 137
T + 140
T + 152
T + 153
T + 158
T + 162
T + 163
T + 165
T + 177
T + 178
T + 179
In-house preparation
Auditors report and other certifications
In-principle approval from SEs
File RHP with SEBI
Allotment
Issue Opens
Research Presentation
Receive SEBI comments on DRHP
Receive SEBI go-ahead to
RHP
Issue closes
File DRHP with SEBI
Note: Timelines may alter depending on preparedness of the Company, Market sentiments (secondary and primary) and SEBI and Stock Exchange clearances

21. Discussion Atul Mittal Director Deloitte Haskin & Sells LLP 9810065744
Past – Chairman and Central Council member- NIRC-ICSI

22. This material has been prepared by Deloitte Haskins & Sells LLP (“DHSLLP”), on a specific request from you and contains proprietary and confidential information. This material may contain information sourced from publicly available information or other third party sources. DHSLLP does not independently verify any such sources and is not responsible for any loss whatsoever caused due to reliance placed on information sourced from such sources. The information contained in this material is intended solely for you. Any disclosure, copy or further distribution of this material or the contents thereof is strictly prohibited.
Nothing in this material creates any contractual relationship between DHSLLP and you. Any mutually binding legal obligations or rights may only be created between you and DHSLLP upon execution of a legally binding contract. By using this material and any information contained in it, the user accepts this entire notice and terms of use.
©2018 Deloitte Haskins & Sells LLP