New Issue Market deals with the new securities which are offered to the investing public for the first time. A new company can go for fresh issue of shares. Besides, an existing company can go for issuing additional shares. Whereas, Stock exchange is a market for old securities, i.e., those which have been already issued and listed on a Stock Exchange.

The stock exchange provides a ready market for buying and selling of old securities.FUNCTIONAL DIFFERENCE BETWEEN NIM AND STOCK EXCHANGE NIM deals with new securities which are issued for the first time for public subscription. .

II and like this. . In the case of Stock Exchange. only the fully paid up shares can be traded. such as Application money. the share value would be collected in various stages. Call money I.PAID UP VALUE DIFFERENCE BETWEEN NIM AND STOCK EXCHANGE In the case of NIM. Allotment money.

Whereas NIM does not have any physical tangible form. .ORGANISATIONAL DIFFERENCE BETWEEN NIM AND STOCK EXCHANGE Stock Exchanges have physical existence and are located in particular geographical areas.

Therefore. .NATURE OF CONTRIBUTION TO INDUSTRIAL FINANCE The NIM provides the issuing company with funds for starting a new enterprise or for either expansion or diversification of existing one by making a direct link between companies which require funds and the investing public. contribution to NIM is direct. Whereas the role of stock exchange in providing capital is indirect.

the market value of shares would be determined. This is the issue of shares at premium.MARKET VALUE OF SHARES DETERMINATION IN NIM AND STOCK EXCHANGE In NIM. In Stock Exchange. . the market value of shares would be determined by the company itself. depending upon the market trend.

advertising agencies and mailing agents . Merchant Bankers Registrars to the issue Collecting and Co-ordinating bankers Underwriters and brokers Printers. 3. 2. 4. 5.MAJOR PLAYERS IN NIM 1.

IPO (Initial Public Offering) SEO (Seasoned Equity Offering) .TYPES OF NEW ISSUE MARKET 1. 2.

Origination Underwriting Distribution .MAJOR FUNCTIONS OF NIM 1. 2. 3.

Origination starts before an issue is actually floated in the market. The works are as follows. analysis and processing of new project proposals. (a) Careful study of Technical. Economical and Financial viability (b) Advisory services to improve the capital adequacy .ORIGINATION This is the work of investigation.

5.ADVISORY SERVICES IN ORIGINATION 1. 4. Advisory service of types of issue Magnitude of issue Time of floating an issue Pricing of an issue (Premium or par or discount) Methods of issue Technique of selling the securities . 2. 3. 6.

If it is unsold. Therefore. not subscribing to that issue. the underwriter will buy the shares and pay money to the company.UNDERWRITING This is an agreement whereby the underwriter promises to subscribe to a specified number of shares or debentures or a specified amount of stock in the event of public. if the issue is fully subscribed. there is no liability for the underwriter. .

the underwriter guarantees the sale of a specified number of shares within a specified period.METHODS OF UNDERWRITING ± STANDING BEHIND THE ISSUE Under this method. the underwriter buys the balance in the issue . If the public do not subscribe to the specified amount of issue.

the underwriter makes outright purchase of shares and resells them to the investors. .OUTRIGHT PURCHASE METHOD OF UNDERWRITING In this method.

The underwriters form a syndicate for this purpose. a group of investors join together for underwriting large issues. .CONSORTIUM METHOD OF UNDERWRITING Here.

.DISTRIBUTION This refers to a sale of securities to ultimate investors. This service is being performed by brokers and agents who maintain a regular and direct contact with the ultimate investors.

METHODS OF FLOATING NEW ISSUES 1. 2. Public issues Offer for sale Placement Rights issues . 3. 4.

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