Академический Документы
Профессиональный Документы
Культура Документы
INTRODUCTION
For starting any Business, an entrepreneur needs investments in the form of capital. Depending on the size of the project, the amount of capital varies. Entrepreneur cannot go for investing his own money in the business, so he has to go for borrowing. borrowing has many problem such as paying interest monthly, that too if it is a long term project, he wont be able to give interest regularly. Paying Interest has some advantage over taxation. Banks/Financial Institution may demand a security for their loans in the form of collaterals, the promoter may choose to raise the capital by issuing shares to public making them a offering on future.
DEFINITION
Capital
Marketing is defined as the process of increasing the major part of financial capital required for starting a business through issue of shares to public. issue may be Shares, Debentures , Bonds, etc. market is a market for long term debts and equity shares.
The
Capital
DEPOSITORY
A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form. There are two types of Depository in our country NSDL CDSL
BOARD MEMBERS
PROMOTERS OF NSDL
NSDL is promoted by Industrial Development Bank of India Limited (IDBI) the largest development bank of India, Unit Trust of India (UTI) - the largest mutual fund in India and National Stock Exchange of India Limited (NSE) - the largest stock exchange in India NDSL FIGURES: Number of certificates eliminated (Approx.) : 619 Crore. NSDL has crossed more than one Crore demat account. Number of companies in which more than 75% shares are dematted : 2500 Average number of accounts opened per day since November 1996 : 3633 Presence of demat account holders in the country : 79% of all pin codes in the country
CSDL MEMBERS
HOLDING COMPANIES
PRIMARY MARKET
SECONDARY MARKET
PUBLIC ISSUE
RIGHT ISSUE
BONUS ISSUE
PRIVATE PLACEMENT
STOCK MARKET
PRIMARY MARKET
In
Primary Market, Securities are offered to the public for subscription, for the purpose of raising the capital or funds. issue of securities in the primary market is subjected to fulfillment of a number of pre-issue guidelines by SEBI and compliance to various provision of the Company Act.
The
An unlisted issuer making a public issue i.e. (making an IPO) is required to satisfy the following provisions: The Issuer Company shall meet the following requirements: (a) Net Tangible Assets of at least Rs. 3 crores in each of the preceding three full years. (b) Distributable profits in at least three of the immediately preceding five years. (c) Net worth of at least Rs. 1 Crore in each of the preceding three full years. (d) If the company has changed its name within the last one year, atleast 50% revenue for the preceding 1 year should be from the activity suggested by the new name. (e) The issue size does not exceed 5 times the pre issue net worth as per the audited balance sheet of the last financial year
CLASSIFICATION OF ISSUES
Issues
Right Public
Private placement
Fresh Issue
PUBLIC ISSUE :It involves raising of funds directly from the public and get themselves listed on the stock exchange in case of new companies ,the face value of the securities is issue at par, and in the case of existing companies, the face value of securities are issued at premium Initial public offer (IPO): When an unlisted company makes either a fresh issue of securities or offers its existing securities for sale or both for the first time to the public, it is called an IPO. This paves way for listing and trading of the issuers securities in the Stock Exchanges. Further public offer (FPO): When an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, it is called a FPO.
RIGHT ISSUE
Right issue is the method of raising additional finance from existing members by offering securities to them on pro rata bases. The rights offer should be kept open for a period of 60 days and should be announced within one month of the closure of books.
BONUS ISSUE:distribute profits to existing shareholders by way of fully paid bonus share in lieu of dividend. These are issued in the ratio of existing shares held. The shareholders do not have to make any additional payment for these shares
Companies
PRIVATE PLACEMENT:
Placement is an issue of shares by a company to a select group of persons under the Section 81 of the companies act 1956. It is a faster way for a company to raise equity capital.
Private
Registrars Bankers
to the Issue
Underwriters
SECONDARY MARKET
Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange. market comprises of Equity market and Debt market. is the trading avenue in which the already existing securities are traded amongst investors. facilitate secondary market transactions by opening direct trading and demat accounts to individuals and companies.
Banks It Secondary Secondary
Shares: An equity share is commonly referred to as an ordinary share. It is an form of fractional ownership in which a shareholder, as a fractional owner, undertakes the entrepreneurial risk associated with the business venture. Holders of the equity shares are members of the company and have voting rights. Right shares: This refers to the issue of new securities to the existing shareholders, at a ratio to those shares already held. Bonus Shares: These shares are issued by the companies to their shareholders free of cost by capitalization of accumulated reserves from the profit earned in the earlier years.
Preference shares:
These
Owners
of these shares are entitled to a fixed dividend or a dividend calculated at a fixed rate to be paid regularly before any dividend can be paid in respect of equity shares. shareholders also enjoy priority over the equity shareholders in the payment of surplus.
These
Cumulative Shares:
This
Convertible
Preference
is a type of preference shares on where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.
Debentures:
Debentures are bonds issued by a company bearing a fixed rate of interest usually payable half-yearly, on specific dates and the principal amount repayable on a particular date on redemption of the debentures. Debentures are normally secured against the asset of the company in favour of the debenture holder.
Bonds:
A bond is a negotiable certificate indebtedness. It is normally unsecured. evidencing
Coupon Bonds:
These are normal bonds on which the issuer pays the investor interest at the predetermined rate at agreed intervals, normally twice a year.
Convertible Bond:
A bond giving the investor the option to convert the bond into equity at a fixed conversion price is referred to as a Convertible Bond.
Treasury Bills:
These are short term bearer discount security, issued by the Government as a means of meeting its cash requirements.