This document discusses five methods for floating new issues of shares: 1. Through prospectus, where a company directly offers shares to the public or institutions at a fixed price through a legal document containing key details. 2. Bought out deals, where promoters place shares with an investment banker who then offers them to the public after a holding period. 3. Private placement, where issues are placed with financial institutions and then sold, avoiding underwriting. This allows for a time and cost effective structured process. 4. Rights issues, where existing shareholders have the right to purchase additional shares offered by the company in proportion to their current holdings. 5. Book building, which resembles conducting a survey to determine

1. • Submitted to:
• Ms Alka
• Submitted by:
• Preeti
• 19pba018
• MBA (3rd sem)
Methods of floating new issues.

2. 1. Through prospectus
2. Bought out deals
3. Private placemen
4. Rightss issue
5. Book building
Methods of floating new issues.

3. 1. Through Prospectus
• “According to the ‘companies(amendment) act, 1985,-application forms for shares of a company should be accompanied by a
memorandom. ‘’
• Under this methods, the issuing company directly offers to general public or institutions a fixed no. Of shares at a stated price
through a document called prospectus.
• The prospectus should contain:
1. Name of the company.
2. Address of the registered office of the company.
3. Existing and proposed activities.
4. Locatipn of the company.
5. Name of the directors
6. Authorized and issued capital to the public.
7. Dates of opening and closing the subscription.
8. Minimum subscription.
9. Name of brokers/lead managers/merchant bankers/registrar of the issue.
10. Floor price and cap price of the share.

4. Merits:-
How a company presents itself to the public that works, infact it
is about ‘how brilliantly one sells onself. ‘

5. 2.Offer for sale
• Promoter places his shares with an investment banker(bought out
dealers or sponsor) who offer it to the public at a later date
Promoter --- Investment banker--- Public
• Hold on period is 70 days to more than a year
• Bought out dealer decides the price after analyzing the viability, the
gestation period, promters’background and future protections.
• Bought out dealers sheds the shares at a premium to the public.

6. Merits:-
• No wastage of time and money (good for small
companies) .
• Fir new companies it is not an easy task to off load
the shares as per the SEBI guidelines, thus the
sponsors help them.

7. 3.Private placement
• The issue is placed into small numbers of financial institutions,
corporate bodies, etc.
• The financial intermediateries purchase the shares and sell them.
• NO need of underwriting as the term if issues are already negotiated
between company and purchasing Intermiedriaries.

8. Merits :-
• Time effective.
• Cost effective.
• Structure effectiveness.
• Access effective.

9. 4.Right issues
• According to the section 81 of the comapnies act 1956, if a compsny
wants to increase its subscribed by allotment of further shares after
two years from the date if its formation or one year from yhe date of
its allotment, which ever is earlier, should offer share first to its
existing shareholders in proportion to the share held by them at the
time of offer.

10. Right issue
• Certain conditions:-
• A notice should be issued to specify
the number of shares issued.
• The time given to accept should not
be less than 15 days.
• Right of the share holders to
renounce the offer in favor of others.

11. 5.Book building
• A method that resemble like survey /keeping records.
• The printer’s representatives/employees used to visit public.
• They made their plans, pricing... Etc., keeping the public interest and
their opinion in mind.

12. Thank you…!