67-587: Astra International, Tbk. is an Indonesian conglomerate controlled by Jardine Cycle & Carriage . It was founded in 1957 by Tjia Kian Tie, Liem Pen Hong with the name of PT Astra International Incorporated. It is Southeast Asia's largest independent automotive group. Operating predominantly in Indonesia, it is a provider of a full range of automobile and motorcycle products in partnerships with companies which include Toyota, Daihatsu, Isuzu, UD Trucks and BMW for automobiles, and Honda for motorcycles. Astra also has
134-486: A public company . Initial public offerings can be used to raise new equity capital for companies, to monetize the investments of private shareholders such as company founders or private equity investors, and to enable easy trading of existing holdings or future capital raising by becoming publicly traded. After the IPO, shares are traded freely in the open market at what is known as the free float. Stock exchanges stipulate
201-696: A 24.9% interest in Siam City Cement, the second largest cement manufacturer in Thailand. Siam City Cement also has a leading presence in South Vietnam , Thailand , Cambodia and Bangladesh . Jardine Cycle & Carriage now holds 25.5% in Siam City Cement. SCCC is listed on the Stock Exchange of Thailand and operates across South and Southeast Asia, producing cement, concrete and other building materials. Cycle & Carriage (100%)
268-580: A better result. In addition to the extensive international evidence that auctions have not been popular for IPOs, there is no U.S. evidence to indicate that the Dutch auction fares any better than the traditional IPO in an unwelcoming market environment. A Dutch auction IPO by WhiteGlove Health, Inc., announced in May 2011 was postponed in September of that year, after several failed attempts to price. An article in
335-455: A company is listed, it is able to issue additional common shares in a number of different ways, one of which is the follow-on offering . This method provides capital for various corporate purposes through the issuance of equity (see stock dilution ) without incurring any debt. This ability to quickly raise potentially large amounts of capital from the marketplace is a key reason many companies seek to go public. An IPO accords several benefits to
402-421: A firm's stock of patents mitigates this effect. A Dutch auction allows shares of an initial public offering to be allocated based only on price aggressiveness, with all successful bidders paying the same price per share. One version of the Dutch auction is OpenIPO , which is based on an auction system designed by economist William Vickrey . This auction method ranks bids from highest to lowest, then accepts
469-440: A minimum free float both in absolute terms (the total value as determined by the share price multiplied by the number of shares sold to the public) and as a proportion of the total share capital (i.e., the number of shares sold to the public divided by the total shares outstanding). Although IPO offers many benefits, there are also significant costs involved, chiefly those associated with the process such as banking and legal fees, and
536-467: A preliminary prospectus, known as a red herring prospectus , during the initial quiet period. The red herring prospectus is so named because of a bold red warning statement printed on its front cover. The warning states that the offering information is incomplete, and may be changed. The actual wording can vary, although most roughly follow the format exhibited on the Facebook IPO red herring. During
603-639: A public company known as The Cycle & Carriage Company (1926) Limited. World War II caused the company to cease operations, and its workshops, motor cars and trucks were absorbed by the Japanese during the Japanese occupation of Malaya and the Japanese occupation of Singapore . Following that in 1951, Cycle & Carriage was awarded the Mercedes-Benz franchise in Singapore, the first to carry
670-604: A result of the shortage of supply for cars. The war, however, encouraged the development of automobile technology, stimulating interest in the motor car, and spurring demand for Cycle & Carriage's products in 1918. In that year, Cycle & Carriage was registered in the Federated Malay States with $ 250,000 in registered capital. In 1926, Cycle & Carriage shifted its headquarters to Orchard Road in Singapore , with capital of SG$ 5 million and registered as
737-401: A strong presence in the automotive component sector through its subsidiary PT Astra Otoparts Tbk. In addition, Astra has interests in financial services; heavy equipment and mining; agribusiness; infrastructure and logistics; and information technology. In financial services, Astra's businesses provide financial products and services to support its automotive and heavy equipment sales. The group
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#1732772375463804-524: A total offering of $ 242 million - which amounted to just a little short of the budget for the Ministry of Interior and Defense for that year. By 1999, Jardines was a major shareholder in Cycle & Carriage, with a 24.6% stake. In 2002, Cycle & Carriage became a subsidiary of Jardines when Jardine Strategic increased its stake to over 50%. In recognition of its distinguished operating history, and in
871-438: Is theglobe.com IPO which helped fuel the IPO "mania" of the late 1990s internet era. Underwritten by Bear Stearns on 13 November 1998, the IPO was priced at $ 9 per share. The share price quickly increased 1,000% on the opening day of trading, to a high of $ 97. Selling pressure from institutional flipping eventually drove the stock back down, and it closed the day at $ 63. Although the company did raise about $ 30 million from
938-411: Is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment banks , who also arrange for the shares to be listed on one or more stock exchanges . Through this process, colloquially known as floating , or going public , a privately held company is transformed into
1005-603: Is a diversified business group in Vietnam, listed on the Ho Chi Minh Stock Exchange . With 29.0% held by Jardine Cycle & Carriage, REE Corp has operations in power and water utility infrastructure, property and M&E services. Jardine Cycle & Carriage first acquired a 10.24% interest in REE Corp in 2012. Vinamilk is the largest dairy producer in Vietnam with about 59% domestic market share and
1072-424: Is a leading automotive group in Singapore. It is engaged in the distribution, retail and aftersales service of Mercedes-Benz , Mitsubishi , Kia , Citroën , DS Automobiles and Maxus motor vehicles. It also retails used cars under its Republic Auto brand and has a car leasing business in Singapore. It is also the exclusive distributor of BYD electric forklifts in Singapore. Cycle & Carriage Bintang (59.1%)
1139-640: Is a multi-business group with interests in automotive, property development, agriculture and logistics. THACO is the largest automotive company in Vietnam, it manufactures, assembles, distributes, retails and provides aftersales service of commercial and passenger vehicles, representing BMW , Kia , Mazda , Mini , Peugeot , Foton and Fuso . It also engages in residential and commercial property development, as well as agriculture in Vietnam, Laos and Cambodia. Additionally, THACO provides logistics services from warehousing, freight forwarding to seaport services. Refrigeration Electrical Engineering Corporation (REE Corp)
1206-590: Is also one of the largest companies by market capitalisation on the Ho Chi Minh Stock Exchange . In 2017, Jardine Cycle & Carriage first acquired an interest in Vinamilk and currently holds a 10.6% stake in the company. Vinamilk is known for its wide range of dairy products which are sold across 250,000 retail points in Vietnam and exported across the region. The company has also topped Forbes Vietnam's top 50 brands in Vietnam listed companies for seven consecutive years. In 2015, Jardine Cycle & Carriage acquired
1273-545: Is an expensive process, IPOs also typically involve one or more law firms with major practices in securities law , such as the Magic Circle firms of London and the white-shoe firms of New York City. Financial historians Richard Sylla and Robert E. Wright have shown that before 1860 most early U.S. corporations sold shares in themselves directly to the public without the aid of intermediaries like investment banks. The direct public offering (DPO), as they term it,
1340-550: Is currently 75% held by the conglomerate. The company was listed on the Singapore Exchange in 1969 as Cycle & Carriage Limited before it renamed to Jardine Cycle & Carriage Limited in 2004 following the integration into Jardines in 2002. It was first founded as Federal Stores in 1899 by a trader in nutmeg and sundries on Jalan Bandar (High Street) in Kuala Lumpur, Malaysia . On 15 June 1899, it
1407-721: Is listed on Bursa Malaysia . With an extensive network of 13 outlets across the country, Cycle & Carriage Bintang is a leading Mercedes-Benz dealer group in Malaysia, providing sales and aftersales services for Mercedes-Benz passenger cars and commercial vehicles, which includes Fuso trucks. In 2013, Jardine Cycle & Carriage established a 60% joint-venture, Cycle & Carriage Myanmar, which distributes, retails and provides aftersales services for Mercedes-Benz and Mazda passenger cars and commercial vehicles, as well as Fuso commercial vehicles in Myanmar. Tunas Ridean (46.2%)
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#17327723754631474-531: Is listed on the Indonesia Stock Exchange and is a leading automotive dealer group in Indonesia. It represents Toyota , Daihatsu , BMW and Isuzu motor vehicles, as well as Honda motorcycles. Tunas Ridean also offers automotive rental and fleet management services. Additionally, it provides vehicle financing through its associate, Mandiri Tunas Finance. Initial public offering An initial public offering ( IPO ) or stock launch
1541-451: Is low enough to stimulate interest in the stock but high enough to raise an adequate amount of capital for the company. When pricing an IPO, underwriters use a variety of key performance indicators and non-GAAP measures. The process of determining an optimal price usually involves the underwriters ("syndicate") arranging share purchase commitments from leading institutional investors. Some researchers (Friesen & Swift, 2009) believe that
1608-465: Is possible that the financial incentives of the advisor and client may not be aligned. The issuer usually allows the underwriters an option to increase the size of the offering by up to 15% under a specific circumstance known as the greenshoe or overallotment option. This option is always exercised when the offering is considered a "hot" issue, by virtue of being oversubscribed. In the US, clients are given
1675-735: Is the largest independent automotive group in Southeast Asia. Its automotive business comprises the manufacture, distribution, retail and aftersales service as well as financing of motor vehicles and motorcycles. It is the sole distributor of Toyota , Daihatsu , Isuzu and Peugeot motor vehicles, a dealer of BMW motor vehicles and UD Trucks as well as a manufacturer and distributor of Honda motorcycles. Astra also manufactures and distributes automotive components. Astra’s financial services consist of consumer financing for motor vehicles and motorcycles, heavy equipment financing and banking, as well as general and life insurance. In addition, Astra
1742-485: Is the sole distributor of Komatsu heavy equipment, and participates in general construction, mining services and thermal power businesses. Astra’s agribusiness includes the cultivation, harvesting and processing of palm oil . Its infrastructure and logistics businesses include toll roads development and management, with a total interest in 353 km of toll roads. Astra is also the sole distributor of Fuji Xerox office equipment in Indonesia. Astra’s property business includes
1809-399: Is to generate additional interest in the stock and a rapid rise in share price when it first becomes publicly traded (known as an "IPO pop"). Flipping , or quickly selling shares for a profit , can lead to significant gains for investors who were allocated shares of the IPO at the offering price. However, underpricing an IPO results in lost potential capital for the issuer. One extreme example
1876-452: Is usually underwritten by a " syndicate " of investment banks, the largest of which take the position of "lead underwriter". Upon selling the shares, the underwriters retain a portion of the proceeds as their fee. This fee is called an underwriting spread . The spread is calculated as a discount from the price of the shares sold (called the gross spread ). Components of an underwriting spread in an initial public offering (IPO) typically include
1943-506: The publicani were legal bodies independent of their members whose ownership was divided into shares, or partes . There is evidence that these shares were sold to public investors and traded in a type of over-the-counter market in the Forum , near the Temple of Castor and Pollux . The shares fluctuated in value, encouraging the activity of speculators, or quaestors . Mere evidence remains of
2010-507: The Dutch auction is still a little used method in U.S. public offerings, although there have been hundreds of auction IPOs in other countries. In determining the success or failure of a Dutch auction, one must consider competing objectives. If the objective is to reduce risk, a traditional IPO may be more effective because the underwriter manages the process, rather than leaving the outcome in part to random chance in terms of who chooses to bid or what strategy each bidder chooses to follow. From
2077-407: The Dutch auction system for its initial public offering. Traditional U.S. investment banks have shown resistance to the idea of using an auction process to engage in public securities offerings. The auction method allows for equal access to the allocation of shares and eliminates the favorable treatment accorded important clients by the underwriters in conventional IPOs. In the face of this resistance,
Astra International - Misplaced Pages Continue
2144-777: The Grade A office building, Menara Astra, the 509-unit Anandamaya Residences and two residential development projects, namely Arumaya in South Jakarta and Asya in East Jakarta, as well as a 3-hectare (7.4-acre) residential and commercial development in Jakarta's Central Business District. In 2008, Jardine Cycle & Carriage acquired 20.5% interest in Truong Hai Auto Corporation (THACO), Jardine Cycle & Carriage's shareholding now stands at 26.6%. THACO
2211-473: The IPO are restricted from issuing any earnings forecasts or research reports for the company. When the quiet period is over, generally the underwriters will initiate research coverage on the firm. A three-day waiting period exists for any member that has acted as a manager or co-manager in a secondary offering. Not all IPOs are eligible for delivery settlement through the DTC system , which would then either require
2278-504: The Wall Street Journal cited the reasons as "broader stock-market volatility and uncertainty about the global economy have made investors wary of investing in new stocks". Under American securities law, there are two-time windows commonly referred to as "quiet periods" during an IPO's history. The first and the one linked above is the period of time following the filing of the company's S-1 but before SEC staff declare
2345-408: The assumption of independent private values (that the value of IPO shares to each bidder is entirely independent of their value to others, even though the shares will shortly be traded on the aftermarket). Theory that incorporates assumptions more appropriate to IPOs does not find that sealed bid auctions are an effective form of price discovery, although possibly some modified form of auction might give
2412-422: The capital to its public investors. Those investors must endure the unpredictable nature of the open market to price and trade their shares. After the IPO, when shares are traded in the market, money passes between public investors. For early private investors who choose to sell shares as part of the IPO process, the IPO represents an opportunity to monetize their investment. After the IPO, once shares are traded in
2479-407: The company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offerings) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of the debt, or working capital. A company selling common shares is never required to repay
2546-442: The concession, while the member of the syndicate who provided the shares to that broker-dealer would retain the underwriting fee. Usually, the managing/lead underwriter, also known as the bookrunner , typically the underwriter selling the largest proportions of the IPO, takes the highest portion of the gross spread , up to 8% in some cases. Multinational IPOs may have many syndicates to deal with differing legal requirements in both
2613-451: The final IPO prospectus is for the issuer to retain one of the major financial "printers", who print (and today, also electronically file with the SEC ) the registration statement on Form S-1. Typically, preparation of the final prospectus is actually performed at the printer, wherein one of their multiple conference rooms the issuer, issuer's counsel (attorneys), underwriter's counsel (attorneys),
2680-468: The following (on a per-share basis): Manager's fee, Underwriting fee—earned by members of the syndicate, and the Concession—earned by the broker-dealer selling the shares. The Manager would be entitled to the entire underwriting spread. A member of the syndicate is entitled to the underwriting fee and the concession. A broker-dealer who is not a member of the syndicate but sells shares would receive only
2747-421: The highest bids that allow all shares to be sold, with all winning bidders paying the same price. It is similar to the model used to auction Treasury bills , notes, and bonds since the 1990s. Before this, Treasury bills were auctioned through a discriminatory or pay-what-you-bid auction, in which the various winning bidders each paid the price (or yield) they bid, and thus the various winning bidders did not all pay
Astra International - Misplaced Pages Continue
2814-465: The interests of integration to Jardines, it was renamed Jardine Cycle & Carriage. Jardine Cycle & Carriage has a 50.1% interest in Astra , a diversified group listed on the Indonesia Stock Exchange , with seven core businesses – automotive, financial services, heavy equipment, mining, construction and energy, agribusiness , infrastructure and logistics, information technology and property. Astra
2881-458: The issued shares, the stock may fall in value on the first day of trading. If so, the stock may lose its marketability and hence even more of its value. This could result in losses for investors, many of whom being the most favored clients of the underwriters. Perhaps the best-known example of this is the Facebook IPO in 2012. Underwriters, therefore, take many factors into consideration when pricing an IPO, and attempt to reach an offering price that
2948-425: The issuer's domestic market and other regions. For example, an issuer based in the E.U. may be represented by the major selling syndicate in its domestic market, Europe, in addition to separate group corporations or selling them for US/Canada and Asia. Usually, the lead underwriter in the head selling group is also the lead bank in the other selling groups. Because of the wide array of legal requirements and because it
3015-668: The lead underwriter(s), and the issuer's accountants/auditors make final edits and proofreading, concluding with the filing of the final prospectus by the financial printer with the Securities and Exchange Commission. Before legal actions initiated by New York Attorney General Eliot Spitzer , which later became known as the Global Settlement enforcement agreement, some large investment firms had initiated favorable research coverage of companies in an effort to aid corporate finance departments and retail divisions engaged in
3082-426: The listing regime. Planning is crucial to a successful IPO. One book suggests the following seven planning steps: IPOs generally involve one or more investment banks known as " underwriters ". The company offering its shares, called the "issuer", enters into a contract with a lead underwriter to sell its shares to the public. The underwriter then approaches investors with offers to sell those shares. A large IPO
3149-583: The marketing of new issues. The central issue in that enforcement agreement had been judged in court previously. It involved the conflict of interest between the investment banking and analysis departments of ten of the largest investment firms in the United States. The investment firms involved in the settlement had all engaged in actions and practices that had allowed the inappropriate influence of their research analysts by their investment bankers seeking lucrative fees. A typical violation addressed by
3216-541: The marque in Southeast Asia. Cycle & Carriage launched plans to build an assembly plant in Hillview, Singapore . On 4 March 1965, the Minister for Finance (Singapore) Goh Keng Swee laid the foundation stone for the $ 2.5 million plant, and predicted that it would create 10,000 new jobs over the following five years. In 1969, the company launched an initial public offering , which was oversubscribed by 73 times, with
3283-427: The offering, it is estimated that with the level of demand for the offering and the volume of trading that took place they might have left upwards of $ 200 million on the table. The danger of overpricing is also an important consideration. If a stock is offered to the public at a higher price than the market will pay, the underwriters may have trouble meeting their commitments to sell shares. Even if they sell all of
3350-417: The ongoing requirement to disclose important and sometimes sensitive information. Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as a prospectus . Most companies undertake an IPO with the assistance of an investment banking firm acting in the capacity of an underwriter. Underwriters provide several services, including help with correctly assessing
3417-405: The open market, investors holding large blocks of shares can either sell those shares piecemeal in the open market or sell a large block of shares directly to the public, at a fixed price , through a secondary market offering . This type of offering is not dilutive since no new shares are being created. Stock prices can change dramatically during a company's first days in the public market. Once
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#17327723754633484-401: The physical delivery of the stock certificates to the clearing agent bank's custodian or a delivery versus payment (DVP) arrangement with the selling group firm. "Stag profit" is a situation in the stock market before and immediately after a company's initial public offering (or any new issue of shares). A "stag" is a party or individual who subscribes to the new issue expecting the price of
3551-686: The previously private company: There are several disadvantages to completing an initial public offering: IPO procedures are governed by different laws in different countries. In the United States, IPOs are regulated by the United States Securities and Exchange Commission under the Securities Act of 1933 . In the United Kingdom, the UK Listing Authority reviews and approves prospectuses and operates
3618-545: The prices for which partes were sold, the nature of initial public offerings, or a description of stock market behavior. Publicani lost favor with the fall of the Republic and the rise of the Empire . In the United States, the first IPO was the public offering of Bank of North America around 1783. When a company becomes publicly listed, the money paid by the investing public for the newly issued shares goes directly to
3685-522: The quiet period, the shares cannot be offered for sale. Brokers can, however, take indications of interest from their clients. At the time of the stock launch, after the Registration Statement has become effective, indications of interest can be converted to buy orders, at the discretion of the buyer. Sales can only be made through a final prospectus cleared by the Securities and Exchange Commission. The final step in preparing and filing
3752-413: The registration statement effective. During this time, issuers, company insiders, analysts, and other parties are legally restricted in their ability to discuss or promote the upcoming IPO (U.S. Securities and Exchange Commission, 2005). The other "quiet period" refers to a period of 10 calendar days following an IPO's first day of public trading. During this time, insiders and any underwriters involved in
3819-549: The same price. Both discriminatory and uniform price or "Dutch" auctions have been used for IPOs in many countries, although only uniform price auctions have been used so far in the US. Large IPO auctions include Japan Tobacco, Singapore Telecom, BAA Plc and Google (ordered by size of proceeds). A variation of the Dutch auction has been used to take a number of U.S. companies public including Morningstar , Interactive Brokers Group , Overstock.com , Ravenswood Winery, Clean Energy Fuels, and Boston Beer Company . In 2004, Google used
3886-476: The settlement was the case of CSFB and Salomon Smith Barney , which were alleged to have engaged in the inappropriate spinning of "hot" IPOs and issued fraudulent research reports in violation of various sections within the Securities Exchange Act of 1934 . A company planning an IPO typically appoints a lead manager, known as a bookrunner , to help it arrive at an appropriate price at which
3953-414: The shares should be offered. There are two primary ways in which the price of an IPO can be determined. Either the company, with the help of its lead managers, fixes a price ("fixed price method"), or the price can be determined through analysis of confidential investor demand data compiled by the bookrunner (" book building "). Historically, many IPOs have been underpriced. The effect of underpricing an IPO
4020-419: The stock to rise immediately upon the start of trading. Thus, stag profit is the financial gain accumulated by the party or individual resulting from the value of the shares rising. This term is more popular in the United Kingdom than in the United States. In the US, such investors are usually called flippers, because they get shares in the offering and then immediately turn around " flipping " or selling them on
4087-447: The underpricing of IPOs is less a deliberate act on the part of issuers and/or underwriters, and more the result of an over-reaction on the part of investors (Friesen & Swift, 2009). One potential method for determining to underprice is through the use of IPO underpricing algorithms . Other researchers have discovered that firms with higher revenues from licensing-based technology commercialization exhibit greater IPO underpricing, while
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#17327723754634154-399: The underwriters. A licensed securities salesperson ( Registered Representative in the US and Canada) selling shares of a public offering to his clients is paid a portion of the selling concession (the fee paid by the issuer to the underwriter) rather than by his client. In some situations, when the IPO is not a "hot" issue (undersubscribed), and where the salesperson is the client's advisor, it
4221-528: The value of shares (share price) and establishing a public market for shares (initial sale). Alternative methods such as the Dutch auction have also been explored and applied for several IPOs. The earliest form of a company which issued public shares was the case of the publicani during the Roman Republic , although this claim is not shared by all modern scholars. Like modern joint-stock companies,
4288-405: The viewpoint of the investor, the Dutch auction allows everyone equal access. Moreover, some forms of the Dutch auction allow the underwriter to be more active in coordinating bids and even communicating general auction trends to some bidders during the bidding period. Some have also argued that a uniform price auction is more effective at price discovery , although the theory behind this is based on
4355-577: Was also involved in retail banking through a stake in PT Bank Permata Tbk until the late 2010s. In 2019, Astra invested US$ 150 million in application-based, on-demand service Gojek . This Indonesia -related article is a stub . You can help Misplaced Pages by expanding it . Jardine Cycle %26 Carriage Jardine Cycle & Carriage Limited ( SGX : C07 ) is the investment holding company of Jardines in Southeast Asia . It
4422-513: Was not done by auction but rather at a share price set by the issuing corporation. In this sense, it is the same as the fixed price public offers that were the traditional IPO method in most non-US countries in the early 1990s. The DPO eliminated the agency problem associated with offerings intermediated by investment banks. The sale (allocation and pricing) of shares in an IPO may take several forms. Common methods include: Public offerings are sold to both institutional investors and retail clients of
4489-552: Was renamed Cycle & Carriage by its founders, the Chua brothers, and thereafter, it expanded to sell bicycles, motorcycles, and eventually motor cars. In 1904, Cycle & Carriage shifted to the corner of High Street, Market Street and Market Square ( 3°8′49″N 101°41′47″E / 3.14694°N 101.69639°E / 3.14694; 101.69639 ) and subsequently expanded to Ipoh , Penang and Singapore . During World War I , Cycle & Carriage suffered economically as
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