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IPOs
Initital public offerings of stock. The first sale of stock by a previously private company to public shareholders.
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What are objectives and function of sebi?
SEBI is the primary governing/regulatory body for the securities market in India. All transactions in the securities market in India are governed & regulated by SEBI.
The SEBI Governs the following
1. New Issues (Initial Public Offering or IPO)
2. Listing agreement of companies with Stock Exchanges
3. Trading Mechanisms
4. Investor Protection
5. Corporate disclosure by listed companies etc.
The SEBI is headquartered in Mumbai, India and has regional offices in the 4 metros.
The reason for creation of SEBI is to take care of these three group of people.
1. The Issuers of Securities (The companies)
2. The Investors (Us)
3. The Market Intermediaries (The brokers, DEMAT providers etc)
IPO stands for Initial Public Offering. An IPO is the first stock offering a company makes to the public.
Source: http://www.ipoboutique.com
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Who is the issue manager of an IPO?
issue manager is an institution who is solely responsible to manage initial public offering.
What is the English of ipo-ipo or buhawi?
I believe ipo-ipo or buhawi (as locally known) are also known as waterspouts. Please refer to the story in this link: http://tubagbohol.mikeligalig.com/index.php?topic=16991.0 What exactly is a waterspout? A waterspout is an intense columnar vortex (usually appearing as a funnel-shaped cloud) that occurs over a body of water and is connected to a cumuliform cloud. In the common form, it is a nonsupercell tornado over water, and brings the water upward. It is weaker than most of its land counterparts.[1] (Source: http://en.wikipedia.org/wiki/Waterspouts) I hope this helped! :)
"Initial Public Offerings", which means exactly that, when a stock goes public it is the initial first offering of that stock to the public. 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.
Whatever we have discussed about till now is termed as the "PRIMARY MARKET". The Market in which fresh share offerings given by companies are bought.
Primary Market refers to the market in which the stocks of companies are sold through Initial Public Offering.
How much does it cost to buy a seat on the NYSE?
NYSE membership prices range, depending on various factors, its all time high was valued at $2.70 Million in 1999, however has dropped since, there are 1,366 seats in the NYSE.
What is index in stock exchange?
The index in a stock exchange refers to the indicator of the overall performance of the exchange. Usually a number of large conglomerates that are listed in the exchange are chosen for the calculation of the Index.
For Ex: The Sensex (Bombay Stock Exchange) comprise of 30 of the top companies in India. Each of these 30 companies has a weightage in the index and the price movement of these companies in either direction can influence the index.
What is the difference between face value and offer price in IPO?
Face value of a share is the minimum value at which a share must be offered to the public. this represents the intrinsic value of the share.
Offer price is the price at which people can buy the share in the market.
For example: Reliance power offered equity shares of face value Rs. 10 at around Rs. 430 odd a few months back. (I am not exactly sure of the offer price of Reliance power)
10 is the face value
430 is the offer price
•Input. You put some thing into the device
•Processing. The device changes the input in some way.
•Output. You take results out.
•Storage. You may save any results that have future value.
The cycle in which data is cycled through the computer. I stands for input, P stands for processing, O stands for output, and S stands for storage.
The Securities and Exchange Board of India was established on April 12, 1992. SEBI is the primary governing/regulatory body for the securities market in India. All transactions in the securities market in india are governed & regulated by SEBI
Why us dollar is the medium of exchange?
The American Dollar is one of the most commonly used currencies and hence it is a preferred medium of exchanges for parties who do not share the same currency.
The S&P CNX Nifty covers 22 sectors of the Indian economy
What determines how many shares a company issues during it's IPO?
There can be various factors, but a primary reason is the need or desire to raise a certain amount of funds to fuel the company's growth plans. Also, investor demand (or lack of demand) for the companies shares can raise or lower the initial amount of shares to be issued. As well, the overall market opportunity or industry capital requirements can generally determine how many shares will be raised; for example, an airline company will likely need to issue many more shares than a software company.
If I bought 10000 dollars worth of berkshire hathaway stock 10 yrs ago what would it be worth today?
10 years ago Berkshire Hathaway Closed at 69,400.00 (August 4th 1998) and since Share builder did not exist I doubt you would acquire a fractional share. However last fridays (August 1st 2008) closing price of 116500.00 demonstrates an increase of 167.86 over the 1998 price. So hypothetically, $10000.00 August 4th 1998 would be $16786.74 today
No. A company can issue an IPO only once. They can issue new shares through bonus shares or through rights issues.
Why it is so called red herring prospectus?
Source: Wikipedia
The term red herring originates from the tradition whereby young hunting dogs in Britain were trained to follow a scent with the use of a "red" (salted and smoked) herring (see kipper). This pungent fish would be dragged across a trail until the puppy learned to follow the scent. The reason it is called a red herring is due to a disclosure statement printed in red ink on the cover which explicitly states that the issuing company is not attempting to sell its shares. e.g. "A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. Information contained herein is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective."
When is a blind trust fund payable?
A "blind trust" is payable whenever the terms of the trust say it is payable. A "blind trust" has no features that are different than any other trust except for the fact that the beneficiaries are not allowed to see where the trust assets are invested or influence how they should be invested.
What are the benefit of IPO for investors and company?
For Company:
* They can raise capital for their business. They can use to fund their expansion & growth.
For Investor:
* Ideally speaking, the stock of any fundamentally sound company would go up after being listed in an exchange. Hence the IPO is the only place where you can get the stock at the lowest possible price. Hence if they buy stocks in an IPO, they can sell it off at a higher price and make a profit
When was Procter and Gamble's initial public offering date?
Proctor and Gamble ceased to be a private company and held its first public offering in 1890. The company began as a partnership between a candle-maker and his chemist son-in-law in 1837. They were pioneering in the concept of profit-sharing, making their workers a part of the company as a simple strategy that would prevent strikes.
