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ACKNOWLEDGEMENT:
We are thankful to our faculty NEHA MEHTA MAM for giving us such a great topic of NEW ISSUE MARKET as our project and helping us to gain knowledge about it which is helpful in our near future.
INTRODUCTION:
The financial market is classified into 2 groups1-Primary market 2-Secondary market The primary market deals in the new financial claims or new securities and therefore they are also known as the NEW ISSUE MARKET. Secondary market deals in the old securities, i.e., those which has been already issued in the primary market, ex- Stock exchange.
1. ORIGINATION:
It refers to the work of investigation, analysis and processing of new project proposals. Origination starts before an issue is actually floated in the market
2.UNDERWRITING:
It is an agreement whereby the underwriter promises to subscribe to a specified number of shares or debentures in the event of public not subscribing to the issue
3.DISTRIBUTION
It is the function of sale of securities to ultimate investors. Brokers and agents who maintain regular and direct contact with the ultimate investors, perform this service.
FEATURES:
1. New Long Capital 2. In a primary issue, the securities are issued by the company directly to investors. 3. The company receives the money and issue new security certificates to the investors.
2.Offer of sale:
It consists in outright sale of securities through the intermediary of issue houses or share brokers
3.Private Placement:
It involves sale of securities to a limited number of sophisticated investors such as financial institutions, mutual funds, venture capital funds, banks, and so on.
4.Right Issue:
When a listed company proposes to issue securities to its existing shareholders, whose names appear in the register of members on record date, in the proportion to their existing holding, through an offer document, such issues are called Right Issue.
Registrars:
Also known as a transfer agent, a registrar is employed by a company or a mutual fund to handle all investor-related services.
Underwriters:
An underwriter agrees to subscribe to a given number of shares (or any other security) in the event the public subscription is inadequate.
Institutional investors from abroad who are registered with SEBI to operate in the Indian Capital market are called foreign institutional investors (FIIs).
Merchant Bankers: Firms that specialize in managing the issue of securities are called merchant bankers. They have to be registered with SEBI.
Brokers: Brokers are registered members of the stock exchanges though whom investors transact. Primary Dealers:
Appointed by the RBI, primary dealers serve as underwriters in the primary market and as market makers in the secondary market for governmental securities.
CONCLUSION:
New Issue Market is also known as primary market is the most important part all across the globe. New Issue market deals in all types of new security, bond, shares, etc. Without Primary Market, Secondary Market is handicapped. Thus, Primary Market plays a vital role in Stock Market.
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