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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
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