In this research, we conduct a reverse study to design a compatible model of share issue privatization for Tehran stock exchange (TSE) development. Privatization and stock market development are known as two representatives of economic growth. Governments use these two economic means to achieve their development goals. In this study, the impact of share issue privatization on stock market development is studied and an optimal model of share issue privatization for Tehran stock exchange (TSE) development is introduced. To study the effect of share issue privatization on key market development variables panel data of privatization index(IPIX), transaction volume, turnover velocity ratio and closing price of each TSE listed company are entered in co integration and error correction models (ECM) during March 2008-June 2011. The result of statistical studies shows a significant relation between privatization index (IPIX) growth and the growth of each of Tehran stock exchange development proxies. Then to design a compatible model of share issue privatization for Tehran stock market development, Delphi survey following Schmitt approach during 4 phases is implemented.

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Share Issue Privatization Model for TSE Development in Round#2



-Supreme Board of Divestiture

- Council of Ministers

-Licenses& Certificates

-Corporate Restructuring

-Changing from PJS to PJSC

-Conversion of bearer shares to registered shares



-Specialized Mother Companies

-Investment Banks (IBs)

Preparation



-Financial

-Legal

-Technical



Underwriting group compiles underwriting agreement, memorandum of association and other important contracts to cite in prospectus

Due Diligence



-Issuing Valuation Report

-Determining Base Price of IPO

Valuation



-Policy Maker

- Controlling& Supervisory Role

-Issuing Offering Certificates



-Iranian Privatization Organization

(IPO)

-Investment Banks (IBs)

Issuing Registration Report by

TSE



Issued by

SEO



IPO



Prospectus

Issued by

IBs



Marketing

Domestic





IPO Price Discovery



Auction

English

h



-Investment Banks (IBs)

-Securities Firms

Market Making

Non-concentrated

Order Driven