IPO & FOREX Quiz

The cutoff price for this issue is Rs 145. This is because the highest bid price received is Rs 155, but the cutoff price is determined based on the bid price that will result in the maximum number of shares being sold. In this case, the bid price of Rs 145 will result in the sale of 100,000 shares, which is the highest number of shares among all the bids. Therefore, the cutoff price for this issue is Rs 145.

The correct answer is 2. An IPO (Initial Public Offering) needs to go through a minimum of two exchanges to be listed. This means that the company offering its shares to the public must have its shares listed on at least two different stock exchanges. This can help provide more liquidity and visibility for the company's shares, as well as potentially attract a larger pool of investors.

ASBA stands for Application Supported by Blocked Amount. It is a mechanism introduced by the Securities and Exchange Board of India (SEBI) for applying to Initial Public Offerings (IPOs) and Rights Issues. Under ASBA, the applicant's bank account is blocked for the amount applied for in the IPO or Rights Issue. This ensures that the funds are available at the time of allotment, but remain in the applicant's account until the finalization of the allotment process. ASBA eliminates the need for refunds and reduces the time taken for the refund process, making it more efficient and convenient for investors.

The correct answer is a. INR. The ISO code for Indian Currency is INR. ISO codes are standardized three-letter codes used to represent currencies worldwide. INR stands for Indian Rupee.

Standard Chartered PLC became the first corporate to issue IDR's (Indian Depository Receipts) in the Indian market. IDR's are financial instruments issued by a foreign company to raise funds from Indian investors. Standard Chartered PLC is a multinational banking and financial services company headquartered in London, and it made history by being the first corporate to introduce this investment tool in India.

Resident individuals are allowed to invest in Venture Funds and unrated debt securities under the Forex scheme.

The correct answer is d. All the above. The Reserve Bank of India plays multiple roles in relation to forex transactions. It is responsible for controlling and managing forex, regulating and conserving forex, and acting as the administrative authority for all forex transactions.

NRIs (Non-Resident Indians) are allowed to invest in unlisted shares issued by Indian companies as per the regulations set by the Reserve Bank of India (RBI). This allows NRIs to participate in the growth of Indian companies and potentially earn returns on their investments. It is important to note that there may be certain conditions and restrictions imposed by the RBI regarding the amount and mode of investment.

Kotak Mahindra Capital Co. Ltd was the Book Running Lead Manager (BRLM) for the recently issued Bajaj Corp Ltd. IPO. The BRLM is responsible for managing the entire IPO process, including underwriting the issue, marketing it to potential investors, and determining the offer price. They play a crucial role in ensuring the success of the IPO and maximizing the proceeds for the company going public.

A merchant banker needs to submit a "Letter of offer" to SEBI for a rights issue. This document contains detailed information about the rights issue, including the terms and conditions, price, and number of shares being offered to existing shareholders. It also includes information about the company's financials, management, and future plans. The letter of offer is an important document that helps investors make informed decisions about whether to participate in the rights issue or not.

Foreign tourists can open a bank account in India during their short visit. This allows them to have a secure place to keep their money and make transactions while they are in the country. It also provides them with the convenience of accessing local banking services and facilities. Opening a bank account in India can be beneficial for foreign tourists as it allows them to easily manage their finances and make payments during their stay.

Preference shares can be used as a route to foreign investment because they offer certain advantages to foreign investors. Preference shares provide a fixed rate of dividend, which is attractive to investors seeking stable returns. Additionally, preference shareholders have a higher claim on the company's assets and earnings compared to common shareholders, providing a level of security to foreign investors. This makes preference shares an appealing investment option for foreign investors looking to invest in a company or country.

Under the Forex scheme, a customer is allowed to remit funds for the acquisition of Employee Stock Option Plans (ESOPs). This means that individuals can transfer money for the purpose of purchasing stocks or options offered by their company as part of their employee compensation package. This allows employees to invest in their company's stock and potentially benefit from its growth.

The correct answer is b. 4.89 times. This means that the Initial Public Offering (IPO) of Hindustan Media was subscribed 4.89 times, indicating a high level of demand for the company's shares during the IPO.

Resident Indians can open both EEFC (Exchange Earners Foreign Currency) accounts and RFC (Resident Foreign Currency) accounts in India. EEFC accounts are meant for holding foreign currency earned through permissible transactions, while RFC accounts are meant for holding foreign currency acquired before becoming a resident or received as a gift or inheritance from a non-resident. Therefore, the correct answer is that resident Indians can open both EEFC accounts and RFC accounts.

The correct answer is 180 days. This means that any foreign exchange acquired for any purpose must be used within 180 days of its purchase. This time limit ensures that the acquired foreign currency is utilized in a timely manner and prevents hoarding or speculation. It also helps to maintain the stability of the foreign exchange market and prevents any potential misuse or abuse of acquired foreign currency.

After an IPO grading date, the IPO can be issued without revalidating within a period of two months. This means that the grading given to the IPO remains valid for two months, and the issuer does not need to go through the revalidation process during this time period.

The quoted rate for Rs/FF can be calculated by dividing the rate for Rs/$ by the rate for FF/$. In this case, the rate for Rs/$ is 35.50/35.60 and the rate for FF/$ is 5.5880/5.5920. Dividing these two rates gives us 6.3483/6.3707, which matches the given answer.

The correct answer is USD 25,000. This is the maximum amount of currency allowed for a business tour. It is important to note that different countries may have different regulations regarding the amount of currency that can be carried for business purposes.

The maximum number of days an IPO offer can remain open for subscription is 10 days.

The customer will get a rate of 40.5900 from the bank. This can be calculated by adding the exchange margin charged by the bank (0.0500) to the spot rate for September (40.5400). Therefore, 40.5400 + 0.0500 = 40.5900.

The statement is false because if a company offers a discount on its IPO offer to employees and retail investors, they do not have to pay the discounted price before allotment of shares. Instead, they would pay the discounted price upon allotment of shares.

The correct answer is b. President of India. The shares held by central Governments are being issued in the name of the President of India. This means that the President of India is the official owner of these shares on behalf of the central government.

There is no limit on the amount of foreign exchange that can be carried by a person visiting India. This means that individuals can bring any amount of foreign currency into the country without any restrictions.

In the direct method of quotation, the value of the currency being quoted is expressed in terms of the domestic currency. Since the value of Indian Rupees can vary in this method, it is the correct answer. The other options (US Dollar, the foreign currency, and None of the above) do not necessarily have a varying value in direct quotation.

The correct answer is "Rs 860 to Rs 985". This answer provides the specific price range for the only MFI IPO that recently hit the Indian capital market. The range is from Rs 860 to Rs 985.

Application and bidding forms are being categorized according to investor category by the colour of the form. This means that different colours are assigned to different investor categories, allowing for easy identification and sorting of the forms based on the investor type. This categorization method helps streamline the application and bidding process, ensuring that the forms are properly organized and handled according to the investor category they belong to.

The correct answer is ICRA, CRISIL, CARE, FITCH INDIA, BRICKWORK. These are the IPO rating agencies operating in India.

The maximum price band that an IPO issuer can set for the issue should not go beyond 120% of the floor price. In other words, the upper limit of the price range should not be more than 120% of the lower limit. This ensures that there is a reasonable range within which the IPO shares can be priced, preventing excessive pricing and potential market manipulation.