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Financial Market
A place in which financial assets are created or transferred. of financial market money market Capital market government securities market Foreign exchange market
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Types
CAPITAL MARKET
Organized Market Raising
mechanism
Functions
mobilize the financial resources secure foreign capital ensure effective allocation of resources 4/14/12
Primary
market
secondary market
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Primary market
Known Deals
Provides Does
From
operational standpoint
Managers Bankers
Registrars Underwriters
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Raising Public
Steps to be taken What is prospectus? Content of prospectus Minimum subscription Allotment of shares
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Disadvantages of an IPO
Marketing Require
Attention
Publicizing
Rights Issue
Method
of raising funds from existing shareholders new shares to shareholders be at par or premium at price much lower than market price letter of offer along with application form consist of four 4/14/12
Offering Can
Offered Issue
Rights Should
period
Number
Inexpensive
BONUS ISSUES
Issued Issued
to share holders out of accumulate profits in the ratio of existing shares held
Also
Other
Characteristics..
Issued
Cannot No
Issued Do
Increase
Indication
Psychological Conserve
Encourage Indicator
Limitations
Do
Does
Costlier
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Private Placement
Direct
sale by company to selective investors can be both public and private companies investors includes
Unit trust of India Life insurance corporation General insurance corporation of India Army group insurance
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Issuers The
Contd..
Instruments
offered
Equity shares Preference shares Cumulative convertible shares Convertible and non-convertible
debentures
Accommodates
Offer to Employee
Enables
Lead
figures of turnover, profits ec of future years claims about growth were used to be made prospects
Exaggerated
Advertisement
falsely
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able to mobilize adequate savings from public and institutional gap aversion in new market cost
Functional Risk
Incur
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YOU
THANK
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