Most companies are usually started privately by their promoter(s). However, The promoter's Capital and the borrowings from the banks and the financial institutions may not be sufficient for setting up or running the business over a long term. So Companies invites the public to contributes towards the equity and issue shares to individual investors.
The way to invite share capital from the public is through a 'Public Issue'. Simply stated, a public issue is and 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.
1. IPO (Initial Public Offer)
2. Public Issue by Listed Company
3. Rights Issue
4. Preferential Issue
1. IPO (Initial Public Offer) :
Initial public offering 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.
2. Public Issue by Listed Company :
It 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.
The procedure for a public issue by a listed company is similar to that of an IPO. Company sends application form similar to IPO to existing share holder to accept the right issue is to the destination of share holder.
3. Rights Issue :
Right issue involves selling of securities in primary market by issuing right to the existing shareholders. When a company issues additional equity capital, is has to be offered in the first instance to the existing shareholders on a pro data basis and this enable a company to issue additional capital to public and raise fund.The number of shares that a shareholders gets is equal to the number of share held by the existing share holder.
4. Preferential Issue :
Preferential issue is issue of equity by a listed company to selected investors at a price which may or may not be related to the prevailing market price is referred to as preferential issue in the indian Capital Market.
The way to invite share capital from the public is through a 'Public Issue'. Simply stated, a public issue is and 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.
1. IPO (Initial Public Offer)
2. Public Issue by Listed Company
3. Rights Issue
4. Preferential Issue
1. IPO (Initial Public Offer) :
Initial public offering 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.
2. Public Issue by Listed Company :
It 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.
The procedure for a public issue by a listed company is similar to that of an IPO. Company sends application form similar to IPO to existing share holder to accept the right issue is to the destination of share holder.
3. Rights Issue :
Right issue involves selling of securities in primary market by issuing right to the existing shareholders. When a company issues additional equity capital, is has to be offered in the first instance to the existing shareholders on a pro data basis and this enable a company to issue additional capital to public and raise fund.The number of shares that a shareholders gets is equal to the number of share held by the existing share holder.
4. Preferential Issue :
Preferential issue is issue of equity by a listed company to selected investors at a price which may or may not be related to the prevailing market price is referred to as preferential issue in the indian Capital Market.
Preferential issue in india is given mainly to promoters, or friendly investors, toward off the threat of take over.
