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Public Issue Management

The new issue market (NIM) deals with new securities being offered to the public for the first time, allowing both new and existing companies to raise fresh capital. NIM is also known as the primary market. For securities to be traded in secondary markets, they must first be issued in NIM. A successful NIM issue requires listing the securities on a stock exchange to provide marketability and allow investors to sell existing holdings to purchase new issues. The conditions of the secondary market also affect the success of NIM issues. NIM and secondary markets are interdependent, as there would be no stock exchanges without NIM, and no NIM without functioning secondary markets.

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Sonal Kalburgi
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518 views7 pages

Public Issue Management

The new issue market (NIM) deals with new securities being offered to the public for the first time, allowing both new and existing companies to raise fresh capital. NIM is also known as the primary market. For securities to be traded in secondary markets, they must first be issued in NIM. A successful NIM issue requires listing the securities on a stock exchange to provide marketability and allow investors to sell existing holdings to purchase new issues. The conditions of the secondary market also affect the success of NIM issues. NIM and secondary markets are interdependent, as there would be no stock exchanges without NIM, and no NIM without functioning secondary markets.

Uploaded by

Sonal Kalburgi
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
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PUBLIC ISSUE

MANAGEMENT :
NEW ISSUE
MARKET(NIM)
NEW ISSUE MARKET(NIM)
 The new issue market deals with the new securities
which were not previously available to the investing
public.

 The securities are offered to the public for the first time.

 Also known as “Primary Market”

 It involves raising of fresh capital by both new and


existing companies.
NIM AND SECONDARY MARKETS
1. Trading: In order to trade securities in secondary
markets, its important that first they are issued in the
primary market.

2. Listing: In order to make a successful issue, its always


necessary to list the securities on a stock exchange.

3. Marketability: Secondary markets provide


marketability to the securities as the investors can off-
load their existing holdings so as to subscribe for the
fresh issue.
NIM AND SECONDARY MARKETS
4. Prevailing conditions: The conditions prevailing in
secondary market affect the successfulness of the
issue being made in NIM.

5. Survival: there could be no stock exchanges if there


is no NIM. Similarly there will be no NIM in the
absence of an efficiently functioning stock exchange.
FUNCTIONS OF NIM
1. Origination : Origination starts before an issue is
actually floated in the market. It refers to the work of
investigation, analysis and processing.
 There are 2 aspects in this –
Investigative service : undertaken by sponsors of
the issue.
Advisory service: includes type of issue, time of
floating an issue, pricing of an issue and methods of
issue.
FUNCTIONS OF NIM
2. Underwriting: It is an agreement whereby the
underwriter promises to subscribe to a specified no.
of shares in the event of public not subscribing to the
issue.

3. Distribution: Function of sale of securities to


investors through brokers and agents.
METHODS OF FLOATING NEW
ISSUES
 Public Issue Method
 Offer for Sale Method
 Private Placement Method
 Initial Public Offer (IPO) Method
 Rights Issue Method
 Bonus Issue Method
 Book - Building Method
 Stock Option Method
 Bought - Out Deals method

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