Reason For Company Issue Shares To The Public

Public IssueMost firms are generally began privately through their promoter(s). However, the promoters capital and also the borrowings from financial institutions as well as banks may not be adequate for establishing or operating the business more than a longer term.

Therefore firms invite people to contribute for the equity and issue stocks to individual traders. The best way to receive share capital from the people is via a’Public Issue(IPO). Fundamentally, a public issue is an offer for the public to subscribe to the stock capital of a firm. Once this is done, the firm allots stocks for the applicants according to the prescribed rules laid down by Securities and Exchange Board of India. reasons

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