The document discusses new issue markets and stock exchanges. It defines new issue markets as dealing with new securities being offered to investors for the first time, such as via initial public offerings (IPOs) or seasoned equity offerings (SEOs). Stock exchanges, on the other hand, provide a ready market for trading existing securities and are physical locations. Both new issue markets and stock exchanges are affected by macroeconomic conditions. The document outlines the key participants, sources of information, and functions of new issue markets like origination, underwriting, and distribution of new securities.

1. INVESTMENT MANAGEMENT
Dr. R. PREMA
ASSOCIATE PROFESSOR
DEPARTMENT OF COMEMRCE CADr. NGPASC
COIMBATORE | INDIA
NEW ISSUE MARKET

2.  New Issue market deals with new securities
that are offered to the investing public for
the first time.
IPO- Market where firms go to the public for
the first time through initial public offering.

 SEO- Market where firms which are already
trading raise additional capital through
seasoned equity offering.
Dr. NGPASC
COIMBATORE | INDIA
Meaning

3.  Deals with new
securities.
 No tangible form
nor any
administrative
organisational set
up.
Provides the issuing
co. with funds.

 Ready market for
trading old
securities.
Have physical setup
and are located in
particular
geographical areas.

 Provides liquidity to
the co. as well as to
the investors.
Dr. NGPASC
COIMBATORE | INDIA

4.  The cos. which make new issue apply for
listing of shares on a recognized stock
exchange.
The new issues first placed in the NIM can be
disposed off subsequently in the stock
exchange.

 Both the markets are susceptible to the
changes in the macro-environment
conditions.
NIM and stock market are economically an
integral part of industrial securities market.

Dr. NGPASC
COIMBATORE | INDIA
New Issue Market and Stock
Exchange

5. Dr. NGPASC
COIMBATORE | INDIA
Participants in the securities Market
Individual
Corporate Organizations
Government
Regulators
Intermediaries

6. Dr. NGPASC
COIMBATORE | INDIA
Sources of Financial Informations
 Annual Report
 Financial Dailies
 Directories
 Stock Exchange Directory
 Kothari's Economic and Industrial Guide of
India
 Times of India Directory

7. Dr. NGPASC
COIMBATORE | INDIA
Issue of Capital in New Issue Market
 Categories of Companies Issuing Shares
 Eligibility for public issue
 Share Application Procedure
 Allotment of Shares

8. 


Origination
Underwriting
Distribution
Dr. NGPASC
COIMBATORE | INDIA
Functions of New Issue Market

9.  A careful study of market, technical and
financial viability of a project.
Advisory services-
1. Type of issue
2. Magnitude of issue
3. Time of floating an issue
4. Pricing of an issue
5. Methods of issue
Dr. NGPASC
COIMBATORE | INDIA
Origination

10.  It is an agreement whereby the underwriter
promises to subscribe to a specified no. of
shares or debentures or a specified amount
of stock in the event of public not
subscribing to the issue.
 Institutional underwriters- LIC, UTI, IDBI,
ICICI,GIC and commercial banks.
Non-institutional underwriters- Brokers.
Dr. NGPASC
COIMBATORE | INDIA
Underwriting

11. 


Assured of raising adequate capital
Relieved from the risk of finding buyers
Assured of getting minimum subscription
within the stipulated time.
Expert advice Public confidence

Dr. NGPASC
COIMBATORE | INDIA
Advantages

12. 

Sale of securities to ultimate investors.
Performed by brokers and agents.
Dr. NGPASC
COIMBATORE | INDIA
Distribution

13. 



Public issues
Offer for sale
Private placement
Rights issues
Dr. NGPASC
COIMBATORE | INDIA
Methods of Floating New Issues

14.  The issuing co. directly offers to the general
public/institutions a fixed no. of shares at a
stated price through a document called
prospectus.
Dr. NGPASC
COIMBATORE | INDIA
Public Issues

15.  Large section of the investing public through
advertisement.
No intermediaries.
 Avoid concentration of wealth in few hands.


Expensive method.
Suitable only for large issues.
Dr. NGPASC
COIMBATORE | INDIA
Merits and Demerits

16. 





Name of the company.
Address of the registered office of the
company Existing and proposed activities
Location of the industry Names of directors
Authorised and proposed issue capital to the
capital
Dates of opening and closing the subscription
list Minimum subscription
Names of brokers/ underwriters/ bankers/
managers and registrars to the issue
A statement by the co. that it will apply to
stock exchange for quotations of its shares.




Dr. NGPASC
COIMBATORE | INDIA
Prospectus

17.  Abridged Prospectus is a shorter version of
the Prospectus and contains all the salient
features of a Prospectus. It accompanies the
application form of public issues
(Cos. Amendment act, 1988)
Dr. NGPASC
COIMBATORE | INDIA
Abridged Prospectus

18.  Consists in outright sale of securities through
the intermediary of issue houses or share
brokers
 First stage- Direct sale to the issue house and
brokers
Second stage- Intermediaries resell the
above securities to the ultimate investors
The difference in the purchase and selling
price is called turn or spread.


Dr. NGPASC
COIMBATORE | INDIA
Offer for Sale

19.  Offer by a foreign co. of a part of it to Indian
investors.
Promoters diluting their stake to comply with
requirements of stock exchange at the time
listing of shares.


20.  The securities issue (users of funds) seeks to
find an institutional buyers such as pension
fund or group of buyers (suppliers of funds)
to purchase the whole issue.
 Issue houses buy the securities outright with
the intention of placing them with their clients
afterwards.
Reliance Industries raised Rs.945 crores with
three FIs of whom UTI was important.
Konkan Railway Corp. placed tax free bonds
worth Rs. 70 crores with banks and Fis.


Dr. NGPASC
COIMBATORE | INDIA
Private Placement

21. 

In a depressed market condition
Suitable for small cos. and first generation
entrepreneurs
Avoids delays and expenses involved in public
issue.
Available to unlisted cos.


 Majority holding of securities with few
institutions.
Dr. NGPASC
COIMBATORE | INDIA
Advantages/Disadvantages

22.  Offered to the existing shareholders in a
particular proportion to their existing share
ownership.
A right means an option to buy certain
securities at a certain privileged price within
a certain specified period

 The rights are transferable and saleable in
the market.
Dr. NGPASC
COIMBATORE | INDIA
Right Issue

23. 






Merchant banker/ lead manager
Underwriters
Bankers to issue
Brokers to an issue
Registrar to issue and share transfer agent
Debenture trustees
Portfolio managers
Dr. NGPASC
COIMBATORE | INDIA
INTERMEDIARIES

24.  Any person who is engaged in the business of
issue management either by making
arrangements regarding selling, buying or
subscribing to securities or acting as
manager/consultant/ advisors or rendering
corporate advisory service in relation to issue
management.
Dr. NGPASC
COIMBATORE | INDIA
Merchant Banker

25.  Make a commitment to get the issue
subscribed either by others or by themselves.
Dr. NGPASC
COIMBATORE | INDIA
Underwriters

26.  Engaged in activities such as acceptance of
applications along with application money
from the investors in respect of issues of
capital and refund of application money.
Dr. NGPASC
COIMBATORE | INDIA
Bankers to an Issue

27.  Concerned with the procurement of
subscription to the issue from the
prospective investors.
Dr. NGPASC
COIMBATORE | INDIA
Brokers to the Issue

28.  Collects application from the investors,
keeps a proper record of applications and
money received from investors or paid to the
seller of securities and assists companies in
determining the basis of allotment of
securities in consultation with stock
exchanges, finalizes the allotment of
securities and processing/ dispatching
allotment letters, refund orders, certificates
and other related documents in respect of
issues of capital.
Dr. NGPASC
COIMBATORE | INDIA
Registrars to an Issue

29.  Maintain the records of holders of securities
on behalf of companies, and deal with all
matters connected with the transfer/
redemption of its securities.
Dr. NGPASC
COIMBATORE | INDIA
Share Transfer Agents

30.  Trustee for a trust deed needed for securing
any issue of debentures by a company/body
corporate or any private placement of
debentures by a listed/ proposed to be listed
company.
Dr. NGPASC
COIMBATORE | INDIA
Debenture Trustee

31.  Persons who advise/ direct/ undertake, on
behalf of the clients, whether discretionary
portfolio manager or otherwise, the
management/ administration of portfolio of
securities/ funds of clients.
Dr. NGPASC
COIMBATORE | INDIA
Portfolio Managers

32. Dr. NGPASC
COIMBATORE | INDIA

33. Dr. NGPASC
COIMBATORE | INDIA
https://youtu.be/1bPHxZx_ou4
https://www.angelbroking.com/knowledge-
center/share-market/how-to-invest-in-
share-market
https://www.investopedia.com/ask/answers
/difference-between-shares-and-stocks/
https://youtu.be/-QGTBT0ReqM