This

is the place where the company gets cash for selling its financial assets. is the market where initial shares and bonds are sold by companies themselves directly and hence the proceeds of the same goes to them, the issuer.

This

 Companies,

governments or public sector institutions can obtain funding through the sale of a new stock is an initial public offering IPO.

 The

security is purchased directly from the issuer. In a primary issue, the securities are issued by the company directly to investors. The primary market performs the crucial function of facilitating capital formation in the economy. Primary issues are used by companies for the purpose of setting up new.

 Primary

market provides opportunity to issuers of securities. Government as well as corporate, to raise resources to meet. They may issue the securities in domestic market and/or international market. The primary market provides the channel for sale of new securities.

 It

is safer to invest in the primary markets than in the secondary markets as the scope.

Types of Companies

Public

Private

 They

have a minimum paid-up share capital of Rs.1 Lakh or such higher capital as may be prescribed. A privately held company has fewer shareholders and its owners don't have to disclose much information about the company. Did you know that IKEA,Dominos Pizza And Hallmark Cards are all Pvt.held

 Public

companies, on the other hand, sell at least a portion of themselves to the public and trade on a stock exchange. This is why doing an IPO is also referred to as "going public." . In India, public companies report to the Securities and Exchange Board of India (SEBI). In other countries, public companies are overseen by governing bodies similar to the SEC.

 Because

of the increased security, public companies can usually get better rates when they issue debt. As long as there is market demand, a public company can always issue more stock. Thus, mergers and acquisitions are easier to do because stock can be issued as part of the deal

Initial Public Offer

Follow on Offer

Preferential Issue

 IPOs

are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. initial public offering, or IPO, is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO.

 An

 Initiatives IPO 1) 2) 3) 4) 5) 6) 7)

required

team Executive Management Legal Council Underwriter SEC Accounting / Financial Disclosure Independent Auditor Public Relation Printer IPO Cost

1. 2. 3. 4. 5. 6.

Issue Of Prospectus Application Application for listing of securities Statutory announcement Allotment of share Allotment/Regret letter

 Initialization Pre

issue activities Prospective review Submitted prospectus to stock exchange Distribution of red herring prospectus & IPO forms Public issue Price fixing Processing of IPO application by register Listing in the stock exchange

IPOs of small companies Size of the Public Issue Promoter Contribution Collection centers for receiving applications Regarding allotment of shares Timeframes for the Issue and Post- Issue formalities Dispatch of Refund Orders Other regulations pertaining to IPO Restrictions on other allotments Relaxations to public issues by infrastructure companies.

IPO decision has been taken after due consideration (outside counsel recommended) Preparation for the IPO (pre IPO) Proper selection of advisors Proper planning and implementation Right timing from a market perspective

Complex, multidisciplinary process Assessment of the stakeholders need Benchmark of IPO versus alternative Assessment of companys IPO readiness

 Pre-IPO

transformation phase.

An IPO transaction phase. post-IPO transaction phase.

A

The pre-IPO transformation phase can be considered to be a restructuring phase where a company starts the groundwork toward becoming a publicly-traded company.

 The

IPO transaction phase usually takes place right before the shares are sold and involves achieving goals that would enhance the optimal initial valuation of the firm. For example, companies can choose to have reputable accounting and law firms handle the formal paperwork associated with the filing.

 The

post-IPO transaction phase involves the execution of the promises and business strategies the company committed to in the preceding stages. This phase is typically a very long phase, because this is the point in time where companies have to go and prove to the market that they are a strong performer that will last.