Q1 – What is primary market with examples?

A1 - In a primary market, securities are created for the first time for
investors to purchase. New securities are issued in this market through
a stock exchange, enabling the government as well as companies to
raise capital.

For a transaction taking place in this market, there are three entities
involved. It would include a company, investors, and an underwriter. A
company issues security in a primary market as an initial public
offering (IPO), and the sale price of such new issue is determined by a
concerned underwriter, which may or may not be a financial institution.
An underwriter also facilitates and monitors the new issue offering.
Investors purchase the newly issued securities in the primary market.
Such a market is regulated by the Securities and Exchange Board of
India.

The entity which issues securities may be looking to expand its

operations, fund other business targets or increase its physical presence
among others. Primary market example of securities issued includes
notes, bills, government bonds or corporate bonds as well as stocks of
companies.

The IPO of Facebook in 2012 was considered one of the biggest IPO of an
online company. People expected that the value of the stock would
increase owing to the popularity of the site, and it would even rise in
the secondary market.

$38 was the additional price per share which was priced by underwriters
due to the high demand in the primary market. This was raised by 25% to a
whopping 421 million shares. This did the stock valuation to 104 Billion
dollars and made facebook largest of any newly public company.
Q2 – What is Secondary Market with examples?
A2- This is the market wherein the trading of securities is done. Secondary
market consists of both equity as well as debt markets.

Securities issued by a company for the first time are offered to the public in
the primary market. Once the IPO is done and the stock is listed, they are
traded in the secondary market. The main difference between the two is
that in the primary market, an investor gets securities directly from the
company through IPOs, while in the secondary market, one purchases
securities from other investors willing to sell the same.

Equity shares, bonds, preference shares, treasury bills, debentures, etc.

are some of the key products available in a secondary market. SEBI is the
regulator of the same.

Secondary market transactions provide liquidity to all kinds of investors.

Due to high volume transactions, their costs are substantially reduced.
Few secondary market examples related to transactions of securities are
as follows.

In a secondary market, investors enter into a transaction of securities with

other investors, and not the issuer. If an investor wants to buy Larsen &
Toubro stocks, it will have to be purchased from another investor who
owns such shares and not from L&T directly. The company will thus not
be involved in the transaction.

Individual and corporate investors, along with investment banks, engage

in the buying and selling of bonds and mutual funds in a secondary
market.
Q3 – What is IPO & FPO?
A3 - A company can raise fresh capital by issue of shares. While there are
several ways in which the shares of a company can be issued, here we will
discuss the two types of public issues. In a public issue or offer, shares of a
company are sold in the primary market in order to get newer investors and
thus generate funds. The shares in such an issue are made available to the
general public, who can subscribe to the same. There are two much-
popular types of public issue of shares- initial public offering (IPO) and
follow-on public offer (FPO). Let us try and understand what an IPO and an
FPO is.

A trending topic amid investors and traders, IPO is a type of public issue of
shares of a company. As the term suggests, an initial public offer is the first
time that a privately owned company's shares are sold to the general public
to raise fresh capital. By filing for an IPO, a company goes public and takes
a step towards getting listed on the exchanges. Thereafter, its shares are
available for trading on the exchanges. An IPO thus involves a change in
the ownership (from private to public) of a company.

Then we have a follow-on public offer or FPO, which is not as popular a

term as an IPO. An FPO involves the second or subsequent sale of shares
of an already listed or public company. It is thus an additional issue of
shares to raise funds.

Differences between IPO and FPO

While an IPO is the first or initial sale of shares of a company to the general
public, an FPO is an additional share sale offer. In an IPO, the company or
the issuer whose shares get listed is a private company. After the IPO, the
issuer joins the likes of other publicly traded companies. But in an FPO, the
shares for sale belong to a company that has already been listed on the
exchanges in the past.

In an IPO, we have a price bank or a fixed price for the share sale, as
decided during the filing process by the merchant banker and the company.
However, in case of an FPO, the price of a shares are driven or determined
by the market as well as the number of shares being increased or
decreased (depending on whether it is a dilutive or non-dilutive FPO).

Many would say that an FPO is relatively less risky than an IPO as there is
already quite a lot of information about the company, its financials,
performance over time and other such factors.

Q4- Why is FPO issued?

A4- A Company generally needs a follow-on offering to raise ‘additional

capital’ for various reasons and this goal is achieved by conducting a
dilutive FPO where new shares are offered and new money is generated.

The issue price for an FPO is mostly lower than the prevailing market
price. This is done by the company to get more and more subscribers to
its issue. Lower demand for the listed shares eventually brings down the
market price and levels it with the FPO issue price.

When a company is issuing a follow-on offering, the shares they are giving
out must be available to the general public, and it is not just offered to
existing shareholders. Additionally, the company must’ve already offered
an IPO and be publicly listed on a stock exchange. There are two types of
follow-on offerings – diluted and non-diluted shares.

 A public company typically wants to issue additional shares in order to

infuse more capital into the organization. There may be various reasons
why a company would want to raise more equity, such as:

A company wants to use the proceeds from the sale of shares to pay off
their existing debt, especially if their current debt levels are too high. They
want to avoid debt covenants that can be highly restrictive on business
operations.

A company can issue more shares to increase its equity to rebalance its
capital structure to remain at the desired debt-to-value ratio.
The IPO did not raise enough capital to help its growth plans, so they want
to issue more shares through another offering.

The company prefers to raise capital through the issuance of shares rather
than increase their debt and interest expense so they can finance new
projects, acquisitions, or business expansions.

Q5 – What happens if FPO is not fully subscribed?

A5- If the company does not receive the minimum subscription of 90 per
cent of the issued amount on the date of closure of the issue, or if the
subscription level falls below 90 per cent after the closure of issue on
account of cheques having being returned unpaid or withdrawal of
applications, the company shall forthwith refund the entire subscription
amount received.

Q6- What are the objectives of right issue?

A6 - A rights issue is an invitation to existing shareholders to purchase
additional new shares in the company. This type of issue gives existing
shareholders securities called rights. With the rights, the shareholder can
purchase new shares at a discount to the market price on a stated future
date. The company is giving shareholders a chance to increase their
exposure to the stock at a discount price.

The Right Issue is done to increase the subscribed capital of the Company.

The shares are issued to the existing shareholders of the Company in

proportion to their current share capital issued earlier.

The Right Issue is done by sending a letter of offer to the shareholders of

the Company.

The notice of the issue of shares should be sent to the shareholders by

offering them an option to take the shares offered to them.
The shareholders should answer the notice within 15 days or a maximum
of 30 days.

The shareholder does not respond to the Company’s notice of issuing

shares; then the offer will be deemed to be declined by the shareholders.

The notice of shares issue should be sent through registered post or speed
post or any electronic mode to the shareholders.

Q7 – What kind of right is given in case of Rights issue?

A7 - When a company needs additional capital and keeps the voting rights
of the existing shareholders proportionately balanced, the company issues
Rights shares. The issue is called so as it gives the existing shareholders a
pre-emptive right to buy new shares at a price that is lesser than market
price. The Rights issue is an invitation to the existing shareholders to buy
new shares in proportion to their existing shareholding.

The issue of right shares is in the benefit of the existing shareholder and
provides them with an advantage of applying for the shares at a discounted
price and retaining their voting rights. A company can raise a significant
amount of the share capital by resorting to the issue of rights shares.

Q8- What is MCX?

The full-form of MCX is Multi Commodity Exchange of India Ltd. It is an

exchange for commodity trading owned by the government of India. The
MCX is based in Mumbai and has been operational since 2003. The MCX
is the largest commodity derivatives exchange in India. MCX is an online
platform where commodities are traded among buyers and sellers. These
may include hard commodities which are usually mined goods and soft
commodities such as agricultural products.

Trading over MCX provides a platform for buyers and sellers to enter into
various kinds of spot, future, and options contracts among other things. The
future market helps in predicting future prices of various goods. The MCX
also helps in a cash settlement or physical settlement of contracts, i.e.,
delivery of goods.

Q9 - What Is The Difference Between BSE And NSE?

A9 - BSE stands for 'Bombay Stock Exchange’, and NSE stands for
'National Stock Exchange. Both the stock exchanges, National Stock
Exchange and Bombay Stock Exchange, are an important part of Indian
Capital Market. Every day, hundreds of thousands of brokers and investors
trade on these stock exchanges. And both are established in Mumbai,
Maharashtra, and SEBI (Securities and Exchange Board of India)
recognized.

1) NSE is the biggest stock exchange in India, while BSE is the oldest
stock exchange in India.

2) The BSE was established in 1875, while the NSE was Established in
1992.

3) The benchmark index for the NSE is the Nifty, while for the BSE it is
Sensex.

4) Global Rank is 11th and 10th

5) BSE promotes trading in equity, debt instruments, mutual funds,

currencies, derivatives, while NSE promotes trading equity, equity
derivatives, debt and currency derivatives segments.

6) The vision of BSE is to 'Emerge as the premier Indian Stock Exchange

with best - in - class global practice in technology, products innovation and
customer service', while NSE's vision is to 'Continue to be a leader,
establish global presence, facilitate the financial well being of people'.

7) The BSE's Sensex comprises of 30 companies, while NSE's Nifty

comprises of 50 companies.

8) Website reference for BSE is www.bseindia.com and for NSE it is

www.nseindia.com
9) The number of listed companies is 1696 for NSE and 5749 for BSE.

Q10 - RECENT IPO Details.

Devyani International IPO Details

IPO Opening Date Aug 4, 2021

IPO Closing Date Aug 6, 2021
Issue Type Book Built Issue IPO
Face Value ₹1 per equity share
IPO Price ₹86 to ₹90 per equity share
Market Lot 165 Shares
Min Order Quantity 165 Shares
Listing At BSE, NSE
[.] Eq Shares of ₹1
Issue Size (aggregating up to ₹1,838.00
Cr)
[.] Eq Shares of ₹1
Fresh Issue
(aggregating up to ₹440.00 Cr)
155,333,330 Eq Shares of ₹1
Offer for Sale (aggregating up to ₹1,398.00
Cr)

IPO Open Date Aug 4, 2021

IPO Close Date Aug 6, 2021
Basis of Allotment Date Aug 11, 2021
Initiation of Refunds Aug 12, 2021
Credit of Shares to Demat
Aug 13, 2021
Account
IPO Listing Date Aug 16, 2021

Lot
Application Shares Amount (Cut-off)
s
Minimum 1 165 ₹14,850
 Lot
Application Shares Amount (Cut-off)
s
Maximum 13 2145 ₹193,050

Devyani International IPO Listing Date

Listing Date Monday, August 16, 2021

BSE Script Code 543330
NSE Symbol DEVYANI
Listing In BSE, NSE
ISIN INE872J01023
IPO Price ₹90 per equity share
Face Value ₹1 per equity share

Listing Day Trading Information

. BSE NSE
IPO Price ₹90.00 ₹90.00
Open ₹141.00 ₹140.90
Low ₹120.75 ₹120.80
High ₹141.05 ₹140.90
Last Trade ₹123.35 ₹123.50