The financial assets comprises of banking Accounts, pension funds, Provident fund, Mutual fund, shares, debentures and other securities. A capital market deals in financial assets, excluding coin & Currency. Capital market is a medium for mobilizing the finance out of the savings of the community and making it available to the users. I.e. to industry, trade, commerce for liquid financial instruments etc. Capital market deals in securities issued by corporate Government & other industrial enterprises.
The Indian Capital market has three components.
1. Money Market
2. Primary Market
3. Secondary Market
Primary market refers to the market of new issues or market for mobilization of resources by the companies and Government undertakings, for new projects and also for expansion, mobilization, addition, and diversification and up gradation.
Primary market operations include new issue of shares by new and existing companies, further and right issues to existing shareholders, public offers, bonds etc.
Primary markets are the medium for floating public issues. Public issue means an invitation by a company to the public to subscribe to the securities offered through a prospectus. Similarly the primary market infuses new listed securities in the market generated through new public issues floated regularly and thus enlarges the security base traded in the secondary market.
[...] The price band can have a revision and such a revision in the price band shall be widely disseminated by informing the stock exchanges, by issuing press release and also indicating the change on the relevant website and the terminals of the syndicate members. In case the price band is revised, the bidding period shall be extended for a further period of three days, subject to the total bidding period not exceeding thirteen days. Cut Off Price In Book building issue, the issuer is required to indicate either the price band or a floor price in the red herring prospectus. [...]
[...] It is aimed to study about Principal Steps involved in floating a Public Issue Pre-issue Preparatory tasks Issue opens and at the expiry of the stipulated period closes Post-issue obligations. Appointment of Intermediaries Issuing of new shares & debentures. Book binding concept. Significance of securities market in the growth of an Indian economy. Present role of SEBI and the stock exchanges. Proportional allotment allowed in case of oversubscribed issues. Investment in security market and its interpret acts, circulars rules regulations and guidelines The study also an aim of educating the investors especially beginners a knowledge about investment in new shares. [...]
[...] Investment in new issues or primary market can be made by non- resident Indians and FII's subject to prior approval of RBI and SEBI. Initial Public Offering (IPO) is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer's securities. A Further public offering (FPO) is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document. [...]
[...] Copies of the draft offer documents in hard copy form may be obtained from the office of SEBI, Mittal Court, ‘A' wing, Ground Floor Nariman Point, Mumbai 400021 on a payment of Rs.100 or from SES, LMs etc. The soft copies can be downloaded from the SEBI website under Reports/Documents section. Some LMs also make it available on their websites for download. The final offer documents that are filed with SEBI/ROC can also be downloaded from the same section of the website. [...]
[...] Both types of issues can be termed as primary market issues as in both cases fresh equity shares are issued to a set of new shareholders. Book building allows investors to bid at a price they are comfortable at, within a price band specified by the company. It is widely accepted as a system, which enables better price discovery through competitive bidding. The next step is to prepare an offer document or a prospectus from the draft document. As per company law, a prospectus should contain all details regarding the issue including the price and this document has to be filed with the concerned Registrar of Companies. [...]
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