Types of new issues.

TYPES OF NEW ISSUES:

The company, which raises finance through new issues, may follow any of the follwing methods:

a)public issue.

b)offer for sale.

c)through intermediars

1.private placement.

2.sundry intermediars.

3.managing brokers.

d)underwritting.

e)rights issue.

PROCEDURE REGARDING PRIMARY MARKET

1.Issue of prospectus:

A company which intends to raise finance from the public through can new issues, must be familiar to them. The company should have gained public intrest.

2.Application:

When a company issues the prospectus, the investors/ public may apply for the shares offered by the company.these application forms may be obtained from the brokers, bankers or lead managers who assist the company in the issue of new shares.

3.Allotment of shares:

On closing the subscription list, the company allot shares to the applicants. After allotment of shares, the allottees become the shareholders of a company. The allotment should may by the company only when it has received ‘minimum subscription’.

4.Regret letter:

After the allotment of shares, the allotment letters or share certificates be sent to the allottees with in a reasonable time, say, two months from the date of subscription closing list.