markets for securities

8/9/2019 Markets for Securities

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MARKETS FOR SECURITIES

Dr.S.Sreenivasa Murthy


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NEW ISSUE MARKET

(Primary Market)

The Functions

Origination

Underwriting

Distribution


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PARTIES INVOLVED IN THE

NEW ISSUE MARKET


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Managers to the Issue

Registrar to the Issue

Underwriters

Bankers to the Issue

Advertising Agents The Financial Institutions


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GOVERNMENT AND

STATUTORY AGENCIES SECURITIES EXCHANGE BOARD OF INDIA

REGISTRAR OF COMPANIES

RESER VE BANK OF INDIA(If the project involvesforeign investment)

STOCK EXCHANGES where the issue is going to be

listed

INDUSTRIAL LICENSING AUTHORITIES POLLUTION CONTROL AUTHORITIES(Clearance for

the project has to be stated in the prospectus)


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COLLECTION CENTRES

PLACEMENT OF THE ISSUE OFFER THROUGH PROPECTUS

BOUGHT OUT DEALS (Offer for Sale)

PRIVATE PLACEMENT

RIGHTS ISSUE BOOK BUILDING


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PRIV

ATE PLACEMEN

T COST EFFECTIVE

TIME EFFECTIVE

STRUCTURE EFFECTIVENESS

ACCESS EFFECTIVE

PRIV

ATE PLACEMEN

T IN

IN

DIA


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PRICING OF NEW ISSUES

At Premium

At ParValue

ALLOTMENT OF SHARES


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Factors to be considered by the

Investors Promoters Credibility

Efficiency of the Management

Project Details Product

Financial Data

Litigation's

Risk Factors

Auditors Report

Statutory Clearance

Investor Service


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Investors Protection in the

Primary Market Project Appraisal

Underwriting

Disclosures in the Prospectus

Clearance by the Stock Exchange

Signing by the Board of Directors SEBIs Role

Redressal of Investors Grievances


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Factors Needed to Make the

Investor Protection Effective INVESTORS AWARENESS

STRICT NORMS FOR PREMIUM

FIXATION

SAFETY NETS

PUNITIVE ACTION

PROMOTERS STAKE


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Recent Trends in the Primary

Market AGRESSIVE PRICING

POOR LIQUIDITY

LOW RETURNS

LOW VOLUME

ECON

OMIC SLOW DOWN


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MEASURES TAKEN TO

REVIVE THE MARKET


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A listed company having immediate three years of

dividend paying track record only can access the market

If a manufacturing company did not have such a track

record, it could access the public issued market providedits project was appraised by the financial institution or a

scheduled commercial bank and such appraising entity is

also participating in the project fund

The companies were required to complete the allotment of

securities within 30 days of the closure of the issued

It would be necessary for a corporate body making a public

issued to have atleast five public share holders for every

Rs.1 lakh of the net capital offer made to the public

SEBI does not vet offer documents of companies having

track record of 3 years dividend payment

Removal of mandatory requirement of 90 per cent

minimum subscription clause in cases of offer for sale


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Reducing the minimum application size for subscribing to

public issue from Rs.5000 from Rs.2000

In case of non-underwritten public issues, promoters could

bring in their own money or procure subscription fromelsewhere within 60 days of the closure of the issue subject

to such disclosures in the offer document

SEBI lifted the provision of the lock in period for

promoters contribution in case of listed companies with 3

years track record of dividend

SEBI has made it mandatory to disclose unaudited results

of companies for every quarter. Timely information would

now be available to the public

SEBI has directed different stock exchanges to segregate

the cash flow statement of all companies that came out

with IPO since 1992-93 and are listed in the exchange to

have a check over these companies

SEBI abolished the fixed par value concept and, instead

markets for securities

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