PRIMARY MARKET

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about primary market & ipo

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PRIMARY MARKET:

1 PRIMARY MARKET -BY SHIVANG TRIPATHI

Introduction:

Introduction Primary market is the market for fresh capital. The primary market plays an important role in the securities market by forming a link between the savings and investments. 2 Section-Delta

Role of primary market:

Role of primary market provides the channel for sale of new securities provides opportunity to issuers of securities; Government as well as corporates capital formation diversification

Issue of shares:

Issue of shares companies invite the public to contribute towards the equity and issue shares to individual investors. The way to invite share capital from the public is through a ‘ Public Issue ’. a public issue is an offer to the public to subscribe to the share capital of a company. Once this is done, the company allots shares to the applicants as per the prescribed rules and regulations laid down by SEBI .

Different kind of issues:

Different kind of issues ISSUES PUBLIC RIGHTS INITIAL PUBLIC OFFERING (IPO) PREFERENTIAL FURTHER PUBLIC OFFERING (FPO) FRESH ISSUE FRESH ISSUE OFFER FOR SALE OFFER FOR SALE

PowerPoint Presentation:

6 Section-Delta

Initial Public Offerings(IPOs):

Initial Public Offerings(IPOs) Initial public offering (IPO), also referred to simply as a "public offering" or "flotation," is when a company issues common stock or shares to the public for the first time.  Underwriting Firm-Determine what type of security to issue , best offering price and the time to bring it to market. Underwriters-Investment banks 7 Section-Delta

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8 Section-Delta

Making Sense of IPOs:

Making Sense of IPOs Book Building -Pricing of the public issue. Process of book building involves- - Book Runner - Bidding - Electronic book Investment Banking- Pre- and post- capital issue services. - Financial intermediaries - Merchant bankers 9 Section-Delta

Offer For Sale:

Offer For Sale   Institutional investors like venture funds, private equity funds etc. invest in unlisted company when it is very small or at an early stage. When the company becomes large, these investors sell their shares to the public, through issue of offer document and the company’s shares are listed in stock exchange. This is called as offer for sale. 10 Section-Delta

Venture Capital:

Venture Capital Venture Capital is a form of "risk capital”. Risk capital is invested as shares (equity) rather than as a loan and the investor requires a higher “ rate of return" to compensate him for his risk. Venture capital provides long-term, committed share capital, to help unquoted companies grow and succeed 11 Section-Delta

Private Equity:

Private Equity An equity capital that is not quoted on a public exchange. Consists of investors and funds that make investments directly into private companies or conduct buyout of public companies. Matured companies. 12 Section-Delta

Right Issues:

Right Issues When a company raises funds from its existing shareholders by selling (issuing) them new shares / debentures, it is called as rights issue. The offer document for a rights issue is called as the Letter of Offer and the issue is kept open for 30–60 days. 13 Section-Delta

Features of Primary market:

Features of Primary market Securities are issued by the company directly to investors.  Market for new long term capital. Setting up new business or for expanding or modernizing the existing business. Capital formation in the economy . Going Public. 14 Section-Delta

Primary Market-At a Glance:

Primary Market-At a Glance Business requires money in order to grow and expand and they can raise money in the form of equity or debt. Such business entities may then approach public at large/institutional investors for raising money. Business entity raises money from investors by issuing newly created securities or may sell securities already held by some investors. This is Primary Market transaction.  15 Section-Delta

PowerPoint Presentation:

Section-Delta 16 THANK YOU