Why companies need to issue shares to public and what are the different types of issues?


Under the (SEBI) Guidelines, the securities can be offered for sale in the primary market in different ways. Each method of issue has got its procedure and mechanism. The methods of issues of securities 

Public Issue through Prospectus

Offer for Sale:

Issue through Private Placement of Securities

Offer through Book-building Process

Public Offer through Stock Exchange On-line System

Companies raise funds by approaching capital markets.  Capital markets is the place where you can raise your capital and invest your capital.

There are different ways Companies can raise their capital,

  1. Equity – primary market/IPO.

Periodic payments or dividends is not mandatory. At time of loss or bank corrupt companies equity payment is last priority.

  1. Debt - Banks or any financial institute.

Periodic interest should be paid. At time of loss or bank corrupt the debt should be cleared on first priority.

Different type of issues

IPO – Initial public offering

FPO – Follow on public offering

Right issues

Private placement 

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