Define Issue Advertisement

The term advertisement is defined to include notices, brochures, pamphlets, circulars, show cards, catalogues, hoardings, play cards, posters, and insertions in newspapers, pictures, films, cover pages of offer documents, or any other print medium, radio, television programmes through any electronic medium.

It is the duty of the lead merchant banker to ensure that the issuing companies comply with the guidelines on issue advertisement.

Features of Issue Advertisement

It must be fair clear and truthful

Information in an offer document into should be reproduced in the issue advertisement

It must disclose all relevant facts and must not be an extract of the relevant item

Statements regarding performance should not be misleading.

The language of the advertisement should be clear concise and understandable use of technical and legal terminology, complex language and excessive details should be avoided.

It should not contain any promise regarding increase in profits.

It should not include any information not in the offer document.

It should not be in the form of crawlers on TV. (i.e., advertisement should not run simultaneously with the programme at the bottom of the television screen)

No issue slogans should be included

Brand name other than commercial name should not be used.

Should not display models, celebrates fictional characters, landmarks, carry cages, etc., on the offer document or issue advertisement.

In the case of advertisement on television screen, the risk factors should not be scrolled on the screen. Viewers must be advised to refer prospectus/offer document for detail.

Slogans should not appear in the issue advertisement

Non-factual and unsubstantiated titles should not appear in the issue advertisement.

Financial data in the advertisement should contain the particulars of sales, gross profit, net profit, share capital, reserves, Earning per share, dividend and book values for 3 years.

Advertisement should be released with risk factors also in respect of the issue.

All public communications must be consistent with past practices.

The public communication should display that draft offer document has been filed with the SEBI or prospectus with the Registrar or letter of offer with the stock exchange

contain only factual information and it should not contain projection/estimates.

not contain in any information erroneous to the prospectus filed.

All material development relating to its business & securities should be disclosed.

Announcement regarding closure of issue should be made only after 90% of the issue has been subscribed.

The advertisement should not offer any incentive to anyone associated with marketing the issue.

The advertisement should specify the reservation if any for NRI’s

All issue advertisements and publicity materials should have the approval of the lead merchant banker responsible for marketing the issue.