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प्रश्न
India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics Rs.4,200-crore initial public offering.
a. Which market is being reflected in the above case?
b. State which method of floatation in the above identified market is being highlighted in the case? (Primary Market)
c. Explain any two other methods of floatation. (Private Placement, Offer through prospectus, offer for sale).
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उत्तर
a. Primary market: The primary market is also known as the new issues market. It deals with new securities being issued for the first time.
b. Right issue: This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company.
c. Offer through Prospectus: Offer through prospectus is the most popular method of raising funds by public companies in the primary market. This involves inviting subscription from the public through issue of prospectus. A prospectus makes a direct appeal to investors to raise capital, through an advertisement in newspapers and magazines. The contents of the prospectus have to be in accordance with the provisions of the Companies Act and SEBI disclosure and investor protection guidelines.
i. Offer for Sale: Under this method securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers. In this case, a company sells securities enbloc an agreed price to brokers who, in turn, resell them to the investing public.
संबंधित प्रश्न
Explain the objectives and functions of the SEBI.
Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.
Answer the question in about fifty words:
What is SEBI and what is its role?
Answer each of these questions in about one hundred and fifty words:
Explain the powers SEBI has been vested with for discharging of its functions efficiently.
Answer each of these questions in about fifteen words:
When was SIDBI established?
Select the correct answer from the options given below and rewrite the statement.
________ was established as a statutory body to regulate the securities market in India.
State whether the statement is true or false:
SEBI protects the interest of investors in securities market.
Attempt the following:
Write a reply to a complaint by an investor
Who among the following is the Chairman of SEBI as of August 2018
State the year in which Securitites Board of India was established?
______ is a legally enforceable document and helps to settle disputes/claims between the investor and the broker. It contains details of the number of shares bought or sold, the price, the date and time of deal, and the brokerage charges.
The basic purpose of SEBI is to create an environment to facilitate efficient mobilisation and allocation of resources through the securities markets. Who are the constituents of this market for whom SEBI aims at creating a conducive environment?
The Securities and Exchange Board of India was established by the Government of India and was given a statutory status in ______.
State the first development bank of the country
Which is the apex statutory body of capital market to which customers can complain to redress their grievances?
______ debt-equity ratio is preferred by the commercial banker over the years as it indicates financial strength of a unit.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of~ 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
In the above case Mr. Ghosh suggested to raised more funds from debt. Higher debt-equity ratio results in:
'Due to various malpractices and multiplied investors grievances the Govt. of India decided to set up a separate regulatory body to protect the interest of investors and to regulate the securities market.'
- Identify the regulatory body set up by Govt. of India for the above-stated purpose.
- State any one objective of the regulatory body identified in (a) above.
Which of the following is not a function of Securities and Exchange Board of India (SEBI)?
