this ppt explains about the sources of financing especially venture capital and rights issue

1. FINANCIAL MANAGEMENT
PRESENTED BY:
PANKHURI JAIN

2. VENTURE CAPITAL
• A new private company which does not want to take finance
from public markets may have their eyes on venture capital.
• Venture capital (VC) is a type of private equity, a form of
financing that is provided by firms or funds to small, early
stage, emerging firms that are deemed to have high growth
potential, or which have demonstrated high growth (in
terms of number of employees, annual revenue, or both).
• Venture capital is provided to any business firm by those
who are willing to invest in the projects that are risky but
have a promising future prospect.

3. FEATURES OF VENTURE CAPITAL
• These are made in innovative projects.
• Benefits from such investments may be realised in the
long run.
• Suppliers of venture capitsl invest money in the form
of equity capital.
• As investment is made through equity capital, the
suppliers of venture capital participate in the
management of the company.

4. GROWTH OF VENTURE CAPITAL IN INDIA
• In 1988, ICICI emerged as a venture capital provider with
Unit Trust of India. And now, there are a number of
venture capital institutes in India.
• Financial banks like ICICI have stepped into this and have
their own venture capital subsidiaries.

5. ADVANTAGES
• New innovative projects are financed through
venture capital which generally offers high profit-
ability in long run.
• In addition to capital, venture capital provides
valuable information, resources, technical
assistance,etc.,to make a business successful.

6. DISADVANTAGES
• It is an uncertain form of financing.
• Benefit from such financing can be realized in long
run only.

7. RIGHTS ISSUES
• A rights offering (issue) is an issue of rights to a company's
existing shareholders that entitles them to buy additional
shares directly from the company in proportion to their
existing holdings, within a fixed time period.
• In a rights offering, the subscription price at which each
share may be purchased in generally at a discount to the
current market price. Rights are often transferable,
allowing the holder to sell them on the open market.

8. SEBI GUIDELINES REGARDING RIGHTS ISSUE
• Applicability
• Withdrawal of rights issue
• Underwriting
• Appointment of registrar
• Appointment of merchant banker
• Partly paid shares
• Letter of offer
• Agreement with depository

9. SEBI GUIDELINES REGARDING RIGHTS
ISSUE(CONTD.)
• Closure of rights issue
• Minimum subscription
• Reservation in rights issue
• Promoter’s contribution and lock-in period
• Rights of fully/partly convertible debentures
• Restriction on further capital issues
• Over-subscription not to be retained
• Issue to be made fully-paid up

10. SEBI GUIDELINES REGARDING RIGHTS
ISSUE(CONTD.)
• Offer document to be made public
• No complaints certificate
• Dispatch of letter of offer
• Composite issues
• Underwriters
• Additional facility for applying
• Utilisation of funds
• Compliance report

11. THANK YOU