Often heard about mutual funds stating that “please read the offer documents carefully before investing”?. Same is the case of shares, with a lot of public issues set to come out in the coming months, it’s important to go through the offer document before applying for an IPO.

This is because a listed company is legally bound to abide by commitments made in the document.

Here’s the information you can find in one.

ABOUT US

· Competitive strengths, industry regulation, corporate structure, main objects, subsidiary details.

· Management and board of directors, compensation, corporate governance, related party transactions, exchange rates and dividend     policy.

· The debt level of the company.

· Critical accounting policies relating to depreciation and revenue recognition.

COVER PAGE

· Contact details of the company, lead managers and registrars.

· Nature, number, price and amount of instruments offered, as well as the issue size.

· Particulars regarding listing.

INTRODUCTION

· Merchant bankers and their responsibilities, details of brokers or syndicate members to the issue.

· Details of capital structure, objects of the offering, fund requirement, funding plan, schedule of implementation, funds deployed, sources of financing of funds already deployed, sources of financing for the balance fund requirement, interim  use of funds, basic terms of issue, basis for issue price, tax benefits.

· The industry overview to understand the sector dynamics and future outlook. It also helps to determine the number of players in the industry and their respective market shares.

RISK FACTORS

· Management’s view on internal and external risks to the company and proposals to address them.

· Forward-looking statements about the company.

FINANCIAL STATEMENTS

· Last five year’s financial statements and restatement including assets, liability, cash flow and profit and loss.

LEGAL INFORMATION

· Any outstanding litigation and developments involving the company, promoters, subsidiaries, and group companies.

· Material developments since the last balance sheet date, government approvals/licensing arrangements, investment approvals and indebtedness.

REGULATORY AND STATUTORY DISCLOSURES

· Eligibility to enter the capital market.

· Letters of allotment or refund orders, consents, expert opinion.

· Capitalisation of reserves or profits.

· Revaluation of assets, classes of shares, stock market data for equity shares of the company.

· Promise vis-a-vis performance in the past issues and mechanism for Redressal of investor grievances.

OFFERING INFORMATION

· Terms of the issue, market lot, issue procedure, the process of making an application.

· Designated date, instructions for completing the bid form, payment instructions, submission of the bid form, the basis of allotment or allocation.

WHERE TO GET IT?

ONLINE

· The soft copies are put up on the websites of the merchant banker and Sebi under the ‘reports/documents’ section.

PHYSICAL COPIES

· You can get one from the merchant banker or the Mumbai office of Sebi on payment of Rs 100 through a demand draft.

Source : ET Wealth, 10th Dec,2013.