Primary Equity Market
Although the equity market in India has been functioning since the late nineteenth century, the primary equity market, also called the new issues market, remained rather dull and inactive, barring occasional brief bursts of activity, till 1991.
- § Free Pricing Companieshave been given freedom in pricing their equity shares and determining the interest rate structure on their debt securities.
- § Disclosure and Investor Protection (DIP) Guidelines Issues of securitieshave to confirm to fairly elaborate disclosure requirements, so that investors can take more informed decisions.
There are three ways in which a company may raise equity capital in the primary market:
- Public issue (IPO, FPO & IDR)
- Rights issue
- Preferential allotment
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