Kinds of Issue or Methods of Floating New Issue ============================================ 1.Public Issue 2.Right Issue 3.Private Placement 4.Employees Stock Option Plan(ESOP) 5.Bonus Issue PRIMARY MARKET Kinds of Issue or Methods of Floating New Issue

Right Issue This type of issue is made by an issuer to its existing share holders as on a record date fixed by the issuer. Record date - the date of issue to existing shareholders Pre-emptive right Letter of offer – prospectus issued by the company for rights issue Issued at lower rate than prevailing market price Given as mostly fully subscribed Advantages Cost of issue is minimum(underwriting, advertising and brokerage expenses could be avoided) Control of the company is undisturbed(because right issue is to existing share holders) BACK

Employees Stock Option Plan(ESOP) It is a right given to eligible employees, directors etc. as an option to buy equity shares and become owners of the company and participate in its profits Also known as Employees share ownership plan, Employees stock purchase scheme Promoter is not eligible for this option The right is not transferable Securities issued under ESOP shall be listed in stock exchanges Exercise price – price payable by employees for exercising the option granted to him. Main purpose – to retain, reward and motivate employees NEXT

TYPES OF ESOPs 1. Employee Stock Option Scheme(ESOS) - option to employees to acquire shares at a predetermined price at a future date 2.Employee Stock Purchase Plan(ESPP) - right to employees to acquire shares directly from the company as part of public issue, not at a future date as in ESOS 3.Share Application Rights(SARs) - also known as Phantom Shares. - employees get the appreciation in the share price from the date of the grant to the date of the exercise as an incentive for performance 4.Employee Stock Purchase Scheme(ESPS) - direct issue of shares to employees - offers to employees as part of a public issue or otherwise BACK

Bonus Issue The existing shareholders get this as a bonus without payment of any money It is issued out of company’s free reserve It is given in a particular ratio to the number of securities held on a record date It is authorized by the articles of association for issue It has not defaulted the payment of interest, payment of statutory dues of the employees BACK

Kinds of Issue or Methods of Floating New Issue =========================================== 1.Public Issue 2.Right Issue 3.Pivate Placement 4.Employees Stock Option Plan(ESOP) 5.Bonus Issue Module 2 PRIMARY MARKET Kinds of Issue or Methods of Floating New Issue SUCCESS LIFE END

Answer the following questions 1.ESOP is Employee stock option plan, then expand ESPP. ANSWER- Employee stock purchase plan 2.Issue of shares to existing share holders out of the free reserves of the company called……………… ANSWER- Bonus issue 3.Date of right issue to existing shareholders is …………… ANSWER- Record date 4. Prospectus issued by the company for rights issue is called………………. ANSWER- Letter of offer Click to end

THANK YOU… PRESENTED BY BIBIN BABU 4TH SEMESTER BCOM GOVT.COLLEGE KOTTAYAM