Class 11 fmm notes, chapter 2 (Primary and Secondary Market) Part -2

 Hello guys these are the notes of chapter 2 of class 11 fmm. 

Class 11 fmm notes chapter 2 (Primary and Secondary Market) 

How does one know if share are allotted in IPO/ offer for sale ?What is the time frame for getting a refund if shares not allotted?

The basis of allotment should be completed within 8 days from the issue close date. As soon as  allotment is completed within 2 working days the details of credit to demat account needs to be completed. 

It takes 11 days from the closure of issue for get to know if shares not alloted.

It takes 12 working days to get the shares listed after issue.

What is the role of a 'Registrar' to an issue?

The registrar finalizes the list of eligible allottees after deleting the invalid applications and ensures that the corporate action for crediting of shares the demat account of the applicant is done.

NSE operates a fully automated screen based trading system called NEAT IPO.

Part -1 notes of chapter 2 

Book building through the NSE system offers several advantages.

1. Gives nation wide bidding facility in securities.

   2. It provides a fair efficient and transparent 

      method for collecting bids.

   3. Involves very less cost.

   4. Saves time.

For video explanation, Click here

Prospectus

A document which discloses the information of a company to the investors.

It is one of the guidelines issued by SEBI.

Discloses information like 

1. The reason for raising the money .
2. The way money is proposed to be spent.
3. The return expected on the money.
4. The size of the issue
5. The project and cost of project
6. Means of financing, product or capacity.

Draft offer document

Prospectus is also known as offer document.

Draft offer document means the offer document in draft stage.

Abridged prospectus

It is a shorter version of the prospectus and contains all the salient features of a prospectus.

Prospectus / offer document are prepared by Merchant bankers.

Lock in indicates a freeze on the sale of shares for a certain period of time.

listing means admission of securities of an issuer to trading privileges a stock exchange through a formal agreement.

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While listing securities in the stock exchange issuer needs to sign an agreement that is called listing agreement.

Delisting of securities means permanent removal of securities of a listed company from a stock exchange.

India can raise foreign currency resources through two main sources: 

(A) issue of foreign currency convertible bonds (FCCB) 

(B) issue of ordinary shares to depository receipts.

What is an American Depository Receipt? 

A physical certificate which tells that you are having an American Depository Share. 

For full explanation of ADS, Please watch my video on YouTube channel, 

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What is Global Depository Receipt? 

A global finance vehicle that allows an issuer to raise capital simultaneously in two or three markets through a global offering.