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Primary Market Ppt

Primary Market Ppt

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Published by mansi888

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Published by: mansi888 on Nov 03, 2011
Copyright:Attribution Non-commercial

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07/19/2015

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PRESENTED BY:
Akrati
Swati Shivani
Mansi Agarwal
Vishal Mittal
Anand Mishra
Chetan Gupta
Saurabh Sharma
Himanshu Chauhan
INDIAN PRIMARYMARKET
MYTH & REALITIES
 
INTRODUCTION OF PRIMARY MARKET
Primary market provides opportunity to issuers of securities,Government as well as corporates, to raise resources to meet theirrequirements of investment and/or discharge some obligation. Theissuers create and issue fresh securities in exchange of funds throughpublic issues and/or as private placement. When equity shares are
exclusively offered to the existing shareholders it is called ‘RightsIssue’ and when it is issued to selected mature and sophisticatedinstitutional investors as opposed to general public it is called ‘PrivatePlacement Issues’. Issuers may issue the securities at face value, or 
at a discount/premium and these securities may take a variety offorms such as equity, debt or some hybrid instruments. The issuersmay issue securities in domestic market and /or international marketthrough ADR/GDR/ECB
 
ROLE OF PRIMARY MARKETS
 
*
This is the market for new long term equity capital. The primarymarket is the market where the securities are sold for the first time.Therefore it is also called the new issue market (NIM).
*
In a primary issue, the securities are issued by the company directlyto investors.
*
The company receives the money and issues new security certificatesto the investors.
*
Primary issues are used by companies for the purpose of setting upnew business or for expanding or modernizing the existing business.
*
The primary market performs the crucial function of facilitating capitalformation in the economy.
*
The new issue market does not include certain other sources of newlong term external finance, such as loans from financial institutions.Borrowers in the new issue market may be raising capital forconverting private capital into public capital; this is known as "goingpublic."
*
The financial assets sold can only be redeemed by the original holder.

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