India’s Inflation Rate for Jul 2010 Inflation rate (Based on Wholesale Price Index) jumped to 9.97 per cent for the month of Jul 2010 as compare to per cent (Jun 2010) on month over month basis. Note: Inflation rate updates second week of every month and last updated on Mon, Aug 16, 2010.

CREDIT RATING AGENCIES CRISIL-Credit Rating and Information Services of India Ltd. (CRISIL) ICRA-India / Information and Credit Rating Agency CARE-Credit Analysis & Research Ltd. Public Sector Undertaking (PSU)

FOREX MEANING: The foreign exchange market is a market where foreign currencies are bought and sold. Ex:if an Indian importer imports goods from USA and has to make payments in US dollars

A FOREX market helps business convert one currency to another. The purpose of FOREX is to help international trade and investment. In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The foreign exchange market started forming during the 1970s

Trading Characteristics It is called as the over counter market (OTC) There is no single unified foreign exchange market There are rather a number of interconnected marketplaces,where different currency instruments are traded. The main trading centers are in London, Newyork,Tokyo,Hongkong,Singapore,but banks throughout the world participate

Capital Market The capital market is the market for securities, where companies and governments can raise long term funds. It is a market in which money is lent for periods longer than a year. It consist of: Primary Market Secondary Market

Primary Market The primary market is that part of the capital market that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. Include all types of securities being sold for the first time. After being offered in primary market it becomes the part of secondary market. Primary offer consists of : IPO (initial public offering) :-where unlisted company is selling the securities to the public for the first time. FPO (follow on public offering) :-new offering of the listed company that have sold securities before.

Features of primary markets This is the market for new long term capital. Therefore it is also called the new issue market (NIM). In a primary issue, the securities are issued by the company directly to investors. The company receives the money and issues new security certificates to the investors. Primary issues are used by companies for the purpose of setting up new business or for expanding or modernizing the existing business. The primary market performs the crucial function of facilitating capital formation in the economy. The new issue market does not include certain other sources of new long term external finance, such as loans, debts etc

Secondary market The secondary markets are where existing securities are sold and bought from one investor or speculator to another, usually on an exchange. Also Secondary market is the market where stocks are traded after they are initially offered to the investor in primary market (IPO's etc.) and get listed to stock exchange. Secondary market comprises of equity markets and the debt markets. Secondary market is a platform to trade listed equities, while Primary market is the way for companies to enter in to secondary market

Placement of Issue Offer through prospectus Offer for sale Private placement Book building Right issue

Offer through prospectus Invites offer for subscription or purchase of any share… The salient feature of prospectus are: General information of company Capital structure of company Terms of the present issue Particulars of the issue Company management and project Details of the outstanding litigations Management perception of risk factors Justification of the issue premium Cost of project, projected earning

Offer for sale Promoter places his share with an investment banker who offer it to the public at later date. Hold on period is 70 to year Bought out dealer decide the price after analyzing the viability and future projections Bought out dealer sheds the share at the premium to the public

Private placement Small number of financial intermediaries like unit trust of India, mutual funds, insurance companies purchase the shares and sell them to the investor at later at suitable prices. Advantages: Cost effective Time effective Access effective Structure effectiveness

Right issue Offers shares at the first to existing share holder. In proportion to the share held by them at time of offer. Offered at advantageous rate compared to the market. Certain conditions: A notice should be issued to specify the number of shares issued The time given to accept should not be less than 15 days Right of share holder to renounce the offer in favor of other

Book building Process of price discovery. Not a fixed priced for its shares. Indicate a price band which give highest (the cap price) and lowest (the floor) prices The spread between floor and cap of the price band should not be more than 20%. The cap should not be more than 120% of the floor. The price is finalized by the book runner and issuer

Intermediaries to issue Underwriter to the issue. Lead Managers. Registrar to the issue. Financial Institutions Advertising agencies Government agencies

Lead Manager Appointed by the company to manage public issue program He should posses valid SEBI registration Main duties: Drafting of Prospectus. Preparing Budget of expenses related to issue. Suggesting appropriate timings of the issue. Assisting in marketing of the public issue. Advising the company in appointing registrars, underwriter, brokers, advertising agency, bankers etc

Registrar Finalizes the list of eligible allotees after deleting the invalid application. Action for crediting the shares to demat account of applicants. Dispatch of refund order to those applicable. Receive the share application from various collection centre. Arrange for dispatching of shares certificate

Bankers to the issue Ensure that funds are collected and transferred to escrow accounts. Estimate of collection and advising the issuer about the closer of the issue.

Underwriters Underwriting means they will subscribe to the balance share if all share are not picked up at IPO. Can be a banker,broker or financial institutions. Done for a commission. Aspect considered before appointing: Reputation. Network of investor Clientele Past performance Experience

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