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You can raise funds through the IPO process.
IPO refers to Initial Public Offering.
Below is how an IPO happens in India
Any company that satisfies the conditions laid down by SEBI (Securities and Exchange Board of India) can issue equity shares. SEBI is the governing body for all market related instruments in India.
Let us say XYZ company wants to go public. (Going public is the word used in market terminology to refer to the event of a company issuing equity shares for the first time) It would file an application with SEBI. If it is filing a request to raise a capital of say Rs. 1 crore, it would be issuing 10 Lac equity shares of face value 10 each.
The terms Face value and Market value would be used through this article. Let us first understand what they are.
Face Value - The Face Value of the share refers to the intrinsic value of a share. This is the value at which the company issues its shares to the common public.
Market Value - Once a share is issued to the public, it would be bought and sold through recognized exchanges like the NSE or BSE. The price at which a particular share is being bought /sold is termed as Market Value.
Net capital Raised by the company = 1,00,00,000/-
No. of Shares issued through the public offering = 10,00,000 (Out of these 10 lac shares, the company would be holding at least 51% that is 5,10,000 shares with itself. The remaining 4,90,000 shares would be available for the public)
When XYZ files its application, based on the profit making capability, its revenue etc the company and SEBI would decide on the market value at which the share would be available for the public to buy. Say for e.g., the share with the face value of Rs. 10/- could be available at the price of Rs. 50/- for purchase through the public offering.
Net Amount raised by the company through the public offering = 4,90,000 * 50 = Rs. 2,45,00,000/-
Every individual who wants to buy the shares of XYZ limited would be filling in forms and paying the amount corresponding to the number of shares they want to buy. Say you want to buy 100 shares of XYZ you would be paying them Rs. 5000/- to buy those 100 shares.
Once the process of issuing shares is over the shares would be allotted to the people who had placed the purchase request. Based on the credibility of the company, the no. of people who place requests to buy its shares would vary. Sometimes the issue could be oversubscribed and sometimes it could be under subscribed. If the issue of XYZ limited was oversubscribed, then you may not get the exact 100 shares that you wanted. You may get a certain
number of shares based on the number of times the issue was oversubscribed.
Say you get 60 shares, then the remaining Rs. 2000/- would be returned to you.
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How can a public limited company raise fund to finance its multinational expansion?
1. Have a history of growth and profitable operations. 2. Have the documents required by the U.S. securities laws; specifically, the Securities Act of 1933.
What is the purpose of an initial public offering (IPO)?
To raise money to fund a company's activities.
The purpose of an initial public offering (IPO) is to do what?
The first sale of stock to the public or To raise money to fund a company's activities.
Best describes the purpose of an initial public offering (IPO)?
The first sale of stock to the public or To raise money to fund a company's activities.
Which best describes the purpose of an initial public offering IPO?
The first sale of stock to the public or To raise money to fund a company's activities.
What is a capital fund drive?
A capital fund drive occurs when the company goes on a quest to raise more capital to finance various projects. Companies can do that by holding an initial public offer.
What is the expansion of pF?
Provident Fund
What do you mean by mutual fund?
Mutual Fund is an open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public.
Why do you fund raise?
You fund raise so you can get money for some cause. It cannot be cause for your own personal need, it has to be a reputable charity such as the RSPCA. camarillo.
Do fund of funds raise money?
A Fund of Fund is a Mutual Fund where the fund manager does not buy individual stocks. Instead he buys mutual funds of a particular type. Maybe Equity Oriented Funds or Debt Oriented Funds etc. When the Fund of Fund starts an IPO, they raise money from investors and then begin investing money in the various fund schemes
Can an Initial Public Offering be issued for a start up company?
No. An IPO can happen only for a company that has established itslef over the past few years and has been consistently generating profits for itself. They can raise extra capital for their expansion. Start-ups that need funding should go for venture capitalists who fund new business ventures. Or the person starting the company has to fund it himself. IPOs do not happen for start ups.
What is the purpose of sales tax?
To raise money to fund the operations of government.
