Public Issue by Corporates

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 Exchanges
• National Stock Exchange
• Over The COunter Exchange of India(OTC)

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:

• Capital Market (Fortnightly Megazine)
• The Economic Times (Finance Daily)
• Business Standard (Finance Daily)
• Intelligent Investors (Weekly Personal Finance Megazine)

Many issuer Company keep certain portion of the issue reserve for Non Resident Indians(NRIs).

Secondary Market:

Mumbai Stock Exchange and National Stock Exchange are the most vibrant exchanges in India. Almost 7000 plus companies' stocks are listed in Mumbai Stock Exchanges. Exchanges are governed by Governing Board. Settlment on these exchanges are weekly. Generaly seller gets sales proceeds with in 21 days from the date of sale.

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.

• A Group
• B1 Group
• B2 Group

One Z group is also formed for all notorious companies.Thses companies are one way or the other not fulfilling the stipulations for listing of shares. So stay way from these companies.

We will post new Public Issues and MFs schemes available in the market with our valued comments on this page.

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