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Methods Of Marketing Securities

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Methods Of Marketing Securities

  1. 1. Methods of Marketing Securities <ul><li>1. Pure Prospectus Method </li></ul><ul><li>Exclusive Subscription </li></ul><ul><li>Issue Price </li></ul><ul><li>Underwriting </li></ul>
  2. 2. Offer For Sale Method <ul><li>Two Stages </li></ul><ul><li>1. En Block Sale to Intermediaries </li></ul><ul><li>2. Re sold to Ultimate Investors </li></ul>
  3. 3. Private Placement Method <ul><li>Features- Securities are sold directly to large buyers </li></ul><ul><li>Listed Companies </li></ul>
  4. 4. Initial Public Offer (IPO) <ul><li>Role of the Intermediary </li></ul><ul><li>Prospectus- Red herring </li></ul><ul><li>Underwriting Syndicate </li></ul><ul><li>The Essential Steps- Order, share allocation, the client, primary issue account, certificates </li></ul>
  5. 5. Rights Issue Method <ul><li>Guidelines issued by SEBI </li></ul><ul><li>1. Shall be issued only by listed companies </li></ul><ul><li>2.Announcement </li></ul><ul><li>3.Appointment of Registrar is compulsory </li></ul><ul><li>4. Appointment of Category 1 merchant-compulsory </li></ul><ul><li>5. Rights share shall be issued only in respect of fully paid shares </li></ul>
  6. 6. Book Building Method <ul><li>The quantum and the price of Securities to be issued –Bids </li></ul><ul><li>Share Price is Determined by the real demand </li></ul><ul><li>Bids are invited from prospective investors </li></ul>
  7. 7. Book Building Process <ul><li>Appointment of book runners </li></ul><ul><li>Drafting Prospectus </li></ul><ul><li>Circulating draft Prospectus </li></ul><ul><li>Maintaining offer records </li></ul><ul><li>Bid Analysis </li></ul><ul><li>Mandatory Underwriting </li></ul>
  8. 8. Stock Option or Employees Stock Option Scheme <ul><li>Guidelines </li></ul><ul><li>Issue Discount </li></ul><ul><li>Approval </li></ul><ul><li>Maximum Limit </li></ul><ul><li>Minimum Period </li></ul><ul><li>Eligibility </li></ul>
  9. 9. Bought out Deals <ul><li>Single Sponsor or the lead sponsor </li></ul><ul><li>Features- </li></ul><ul><li>1. Three Parties </li></ul><ul><li>2. Out Right Sale </li></ul><ul><li>3. Syndicate </li></ul><ul><li>4. Sale Price </li></ul><ul><li>5. Fund Based </li></ul><ul><li>6. Unlisted Companies </li></ul>
  10. 10. Players in the New Issue Markets <ul><li>1. Merchant Bankers </li></ul><ul><li>2. Registrars </li></ul><ul><li>3. Collecting and Co ordinators Bankers </li></ul><ul><li>4. Underwriters and Brokers </li></ul><ul><li>5. Printers, Advertising Agencies and Mailing Agencies </li></ul>
  11. 11. Secondary Market <ul><li>Control Over Secondary Market </li></ul><ul><li>Recognition of Stock Exchange </li></ul><ul><li>Listing of Securities </li></ul><ul><li>Registration of Brokers </li></ul>
  12. 12. Recognition of Stock Exchange <ul><li>Theatres of trading- assist and control the buying and selling of Securities. </li></ul><ul><li>Functions of the Stock Exchange </li></ul><ul><li>1. liquidity </li></ul><ul><li>2. Marketability of Securities </li></ul><ul><li>3. Safty of Funds </li></ul><ul><li>4. Supply of Long Term Funds </li></ul><ul><li>5. Direct the capital to profitable ventures </li></ul>
  13. 13. <ul><li>6. Motivates in the improvement of the performance </li></ul><ul><li>7. Promotion of Investment </li></ul><ul><li>8. Reflection of Business Cycle </li></ul><ul><li>9. Marketing of New Issues </li></ul><ul><li>10. Other Services </li></ul>
  14. 14. Recognition Procedures <ul><li>Recognised by the Central Government under SCRA and SEBI </li></ul><ul><li>Grant of Application </li></ul><ul><li>Renewal of Recognition </li></ul><ul><li>Withdrawal of Recognition </li></ul>
  15. 15. II. Listing of Securities <ul><li>Group A Shares (Specified shares or Cleared securities) </li></ul><ul><li>Group B shares (Non- Specified Shares or Non Cleared Securities) </li></ul><ul><li>B to A- Equit Base of 10 crores, market capitalisation of Rs.25-30 Crores, public holding of 30-405, A share holding population of 15,000 to 20,000 and </li></ul><ul><li>A good dividend paying status etc </li></ul>
  16. 16. Listing of Securities <ul><li>Group B- B1 and Bshares </li></ul><ul><li>Group C – Odd lots </li></ul>

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