Financial markets management class 10 , Chapter 3 notes part -1
PRIMARY MARKET Provides the channel for sale of new securities. provides the opportunities to issuers to raise resources to meet the requirements. For shares original cost of stock shown on the certificate. For Bond it is the an amount paid to the holder at maturity. When a security is sold above its face value it is said to be issued at a premium and if it is sold at less than its face value then it is said to be issued at a discount. Why do companies need to issue shares to the public? borrowings from banks may not be sufficient for setting the business over the long term so companies invite the public to contribute and issue shares to individual investors. When the shares of a company are offered to 50 or more investors it is known as public issue. When the shares of a company are offered to 49 or less than 49 investors it is known as private placement. What are the different kinds of issues? Public Issue Right Issue Preferential Issue/ private placement. Initial public offering