Study the following case/situation and express your opinion. (a). Should d go to primary market or secondary market to issue its shares?

Question

Study the following case/situation and express your opinion.

Joy Ltd. Company is a newly incorporated company. It wants to raise capital for the first time by issuing equity shares.

(a). Should d go to primary market or secondary market to issue its shares?

(b). Should it offer its shares through public offer or rights issue?

(c). What will be the issue of Equity shares by Joy Ltd. Company called IPO or FPO?

Answer 1

(a) Joy Ltd. should go to the primary market to issue equity shares in the market. Primary Market is mainly dealing with fresh issues of securities.

(b) Joy Ltd. should offer its shares through public offer (IPO) as Joy Ltd. Company is going to its securities first time.

(c) When Joy Ltd. issued its securities first time then it is called as IPO at the same time if Joy Ltd. offered securities for the second, third, or fourth time it is called a follow on public offering (EPO)