1. 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

2. 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)
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3. 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
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4. 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

5. 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
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6. 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

7. 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
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8. THANK YOU… PRESENTED BY BIBIN BABU 4TH SEMESTER BCOM
GOVT.COLLEGE KOTTAYAM