Prospectus Case Study

DETAILS OF THE STUDY

PROSPECTUS

The ‘Prospectus’ is the most important document, for the company to come out with a Public Issue. Pursuant to Section 2(36) of The Companies Act, ‘Prospectus’ means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate. The purpose of the Prospectus is to provide all the necessary and true information to investors about a Company in order to enable him to make an investment decision. The Prospectus is a document by way of which the

This basic inter locations of difference opinion is what leads ultimately to price discovery for the issue.

DUE DILIGENCE

Investing in Initial Public Offerings (IPO), which seemed like a no-brainer till recently with most IPO’s yielding handsome returns post-listing, has turned riskier with shares trading at various levels not very different from the offer price? The case for re-examining the way one has been assessing IPO’s as an investment avenue has become stronger.

What is Due Diligence?

Due diligence is used to investigate and evaluate a business opportunity. The term due diligence describes a general duty to exercise care in any transaction. As such, it spans investigation into all relevant aspects of the past, present, and predictable future of the business of a target company. Due diligence sounds impressive but ultimately it translates into basic commonsense success factors such as "thinking things through" and "doing your homework".

Why is Due Diligence Conducted?

There are many reasons for conducting due diligences which are as follows:-

Confirmation that the business is what it appears to

Gain information that will be useful for valuing assets, defining representations and warranties, and/or negotiating price concessions.

Verification that the transaction complies with investment or acquisition criteria.

Who Conducts Due Diligence?

Lead and co-investors, Corporate Development Staff, Attorneys, Accountants, Investment Bankers, Loan Officers and other Professionals involved in a transaction may have a need or an obligation to conduct independent Due Diligence. Target management typically assists these parties in obtaining due diligence information but because it is unwise to totally rely on management third party consultants such as Astute Diligence are often brought in to conduct Due Diligence.

When is Due Diligence Conducted?

Initial data collection and evaluation commences when a business opportunity first arises and continues throughout the talks. Thorough detailed due diligence is typically conducted after the parties involved in a proposed transaction have agreed in principle that a deal should be pursued and after a preliminary understanding has been reached, but prior to the signing of a binding contract.

How is Due Diligence