A Study on Type and Method of Issues - A Corner Stone of Primary Market
International Journal of Business and Administration Research Review 2015
6 Pages Posted: 19 Jul 2021
Date Written: July 27, 2015
Adequate mobilisation of capital needs proper timing, type and method of issue. This is a dire necessity for fulfilment of minimum subscription for prospectus issue. There are four modes of increasing share capital: Public issue, Rights issue, Bonus issue and Private placement. There are three types of issues namely Equity shares, Preference shares and Debentures. Under SEBI guidelines, the securities can be offered for sale in the primary market in different ways. Each method of issue has got its procedure and mechanism.
The objectives of the study are to study type and method of issues of securities for mobilisation of funds and to provide findings/ results based on analysis findings. In view of the objectives of the study, exploratory research design has been adopted. The study is based on secondary data covering annual data of the various types and methods of issues for mobilisation of funds from 2000-01 to 2013-14. This has been collected from official websites of Reserve Bank of India. Various other reports like magazines, journals, published books are also referred to for the present study. The statistical tools applied for data analysis is descriptive and inferential statistics. Based on objectives, the hypotheses are formed for analysis.
It is concluded that majority of funds mobilised from type of issue is equity shares; method of issue is prospectus and from type of company is existing companies. Compound Annual Growth Rate is positive only in number and size of issues from existing companies and debentures, size of right, equity and prospectus issues. There are significant differences among and within the variables.
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