The way to invite the share capital from the public is through a 'public issue'. Simply stated, a public issue is an offer to the public to subscribe to the share capital of a company. Once this is done, the company allots the shares to the applicants as per the law and thus shares come into existence.
Here, the listed company offers its shares directly to the investors for raising the required fund. An IPO offers a number of advantages to the company as listing and trading generates considerable interest in a company. It provides opportunities to the companies for repeated access to the market with follow on issues (FPO). In addition to follow on public issues, the company could mobilize addition equity funds through private placements, rights issues or bonus issues.
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