Generally companies enter the market with expansion plans or for setting up of a new project. Issue is mostly for Equity Shares and market lot is of 100 shares. Companies normally keep issue open for 3 to 7 days , depending upon size of the issue. After the closure of issue , allotment takes around 45 days. Listing on Stock Exchanges also made during this period.
For issue of securities i.e Equity Shares/Debentures or any such papers intermediary is Merchant Banker. In India after the Security Scam in 1992 , there are very few reputed Merchant Bankers are left.Recent trend is Foreign Finance Companies are tying up with Large brokerage house in India to offer Merchant Banking Services.
Issue clearance and other procedures are regulated by Securities & Exchange Board of India, popularly known as SEBI.SEBI also regulates Stock Exchanges in India.Stock Exchanges are of three kind in India.
Regional Stock Exchange prescribes limits for listing of companies, i.e. amount of paid up capital of the company is the basis of listing eligibility.
There is no derth of investors in India for good projects or companies. After the Scam of 1992 and brusting of new issue boom there after , has made investors learn a very costly lesson.Finance journalism has also matured after the restructuring of Primary market. Generally Investors depends on Finance Magazines and News papers for issue ratings. Good one of them are:
Mutual Funds market in India is in its infancy. In good old days there was only one Mutual Fund known as Unit Trust of India(UTI) established in 1964. But after the liberalisation in 1991, private and other public sector Mutual Funds entered the market.
Largely , market is dominated by Public Sector Banks/Insurance Companies and UTI. But investors were again given a raw deal by alomst all MFs. Very poor performance by them was the primary resaon for investors to avoid MFs.
Performance of private MFs were also not so encouraging. People lost money heavily in MFs. But one this must be mentioned that investors were expecting kinds of returns Equity Shares were offering . In MF it was not possible as it takes some years for MFs to declare dividends or increase in NAV.
Recent trend is encouraging with sector specific MFs schemes are getting good response and they are also showing reasonably good performance. Some of the good MFs are:
Investment in MFs can be considered only if U do not have time to track or understand capital market. reasonable return can expected by Investment in good MFs.
Types of Accounts:
Rates of Interest depends on Bank and duration of investments.Generally Bank offers ranges between % of Interest.
Looking at the requirements of Foreign Financial Institutions and Mutual Funds exchanges are investing heavily in technology to make the exchanges world class. Even Dematerialisation(DMAT) of shares is in full swing and SEBI is projecting almost all scripts in DMAT form within 2 years.
In DMAT form buyer will not get physical delivery of shares.Shares will be directly deposited in his/her DMAT bank A/C. This will save buyer from bad delivery and long time taken by companies in transfer of shares.
SEBI also issue guidelines for the management of exchanges.Indian secondary market offers many valued scripts for investment.Base don the price and volume Mumbai Stock Exchange has divided scripts in 3 divisions.
We will post new Public Issues and MFs schemes available in the market with our valued comments on this page.
Copyright © 1999 Chartered Net.Com
All rights reserved.