Syndicate Members

Syndicate members are commercial or investment banks responsible for underwriting IPO's. Syndicate members are usually registered with SEBI or registered as brokers with BSE / NSE Stock Exchanges.

They work as intermediaries for Issuer Company and the buyers of the IPO stocks. Investors submit their bids for IPO shares through Syndicate Members appointed by the Issuer Company. They are also known as 'The Members of the Syndicate'.

The Members of the Syndicate circulate copies of the Red Herring Prospectus along with the bid cum application form to potential investors. They are also responsible for accepting the bids, payments and application forms for the public issue.

After receiving the bid for IPO Shares from an investor, Syndicate Member enters bidding detail into the electronic bidding system and generates a Transaction Registration Slip ('TRS') for each price and demand option and give the same to the bidder.

The Bidder can make the revision to the bid any number of times during the Bidding Period. However, for any revision(s) in the Bid, the Bidders should use the services of the same member of the Syndicate through whom he or she had placed the original Bid.

At the time of registering each Bid, the members of the Syndicate enters the following details of the investor in the on-line system:

• Name of the investor.
• Investor Category - Individual, Corporate, NRI, FII, or Mutual Fund etc.
• Numbers of Equity Shares bid for.
• Bid Amount.
• Bid cum Application Form number.
• Whether Margin Amount has been paid upon submission of Bid cum Application Form.
• Depository Participant Identification Number and Client Identification Number of the beneficiary account of the Bidder.

The Members of Syndicate deposit all the money received from investors to the Escrow Account opened by the Issuer Company.

The Bid cum Application Form along with other supporting documents are then send to the registrar of the issue for further processing.

Answered on 2019-04-11