Primary stock market

 


Capital is needed to run any company. A certain percentage of the required capital is deposited by the operators. In order to raise insufficient capital or according to the rules of the country where the company is established, a certain percentage of capital has to be deposited by the public. The method of raising capital in this way varies according to the condition and law of the company. According to some methods-

1. IPO : - The method of collecting a certain percentage of capital from ordinary citizens while starting a company is called IPO. The full form of IPO is initial public offering.


2. FPO : - In order to increase the capital of the company, IPO has been sold and the company has to increase the capital in accordance with the rules of the country where the sale of securities is called FPO. The price of FPO is different from IPO. The full form of the FPO is a further public offering.


3. Right shares: - Right sale is also a method to increase the capital of the company. When selling and distributing securities through this method, only the shareholders of the company will be able to buy the right shares. "So" this method is different from others. In order to buy the rightful shares of the company, the shares of the company must be rich, otherwise this method will not allow others to buy the rightful shares.

4. Book building: - This method is a method of selling by adopting a kind of auction-like process. Eligible institutional investors determine the value of securities by conducting a detailed study of the various pros and cons of the company, according to which the general investors proceed with the process of purchase. This method is a means of increasing the capital brought in by the best companies giving high returns.


5. Other methods: - According to the condition of the company and the legal provisions of the country where the company was established, various methods are adopted to raise the insufficient capital of the company and to expand the business. Such methods are used to sell securities by conducting legal provisions for the conduct of a particular place.

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