Articles Junction

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Article Junction is an online blog of Sandeep Patil. Here, I share my encounters and experiences of life and would contribute articles on variety of topics; like finance, technology, health, the Internet, mobile, celebrities, etc. I shall also publish review articles on latest movies, documentaries, gadgets, products, services, so on. My attempt is to blog what I have seen, understood and learned.

Authors

Articles published on 'Articles Junction Blog' (AJB) are written and published by Sandeep Patil. This blog is updated and maintained by my co-author and webmaster Manoj Patil. Some articles are also contributed by our guest bloggers on a timely manner. We hope you will enjoy reading our articles. We welcome you to submit your suggestions.

Welcome to Articles Junction Blog, a free information portal on variety of subjects and topics that influenced different aspects of my life.

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Methods of Raising Funds from Primary Market

Methods of Raising Funds from Primary Market


Methods of raising capital from primary market are given in the image below.

Methods of raising funds from primary market

Image credits © Manoj Patil.

Methods of raising capital through primary market are: ↓

  1. Public issue,
  2. Rights issue,
  3. Private placement.

Different methods of raising capital in primary market are: ↓

1. Public Issue


Here prospectus is issued, and a public appeal is made to subscribe the new shares / debentures issued by the company. Shares are allocated in response to application received. Some companies sell shares directly to the public while some take help of share brokers. The company appoints an advertising agency to advertise about the issue of shares.

2. Rights Issue


Rights issue means new shares are offered to the existing shareholders on the pro-rata basis. When company wants to raise additional capital, securities are first offered to the existing shareholders. If the shareholders do not want to buy shares, then the company can sell the shares to the outside public.

3. Private Placement


Private Placement of shares means the company sells its shares to a small group of investors. It can sell to banks, insurance companies, financial institutions, etc. It is an economical and quick method of selling securities. The company does not sell its shares to the public.



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