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New Issue Market
UNIT 8 CAPITAL MARKET I : NEW ISSUES MARKET
Structur
8.0 8.1 8.2 8.3
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Objectives Introduction ,Primary Market and Secondary Market 'Idethods of Floatation of New Issues
8.3.1 Public Issue 8.3.2 Rights Issue 8.3.3 Private Placement

8.4 Entry Norms for New Issues 8.5 Fixation of Premium
8.5.1 Book Building Process

8.6 Reforms in Primary Capital Market 8.7 Recent Trends in New Issues Market in India 8.8 Let U s Sum Up 8.9 Key Words 8.10 Some Useful Books 8.1 1 Answers/Hints to Check Your Progress

8.0 OBJECTIVES
After going through this unit you will be able to : explain the concept of capital market and its segments,
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describe the various means to raise the capital in the primary market, describe the reforms in primary capital market, and state the recent trends in new issues market in India.

8.1 INTRODUCTION
We know that Financial markets are broadly categorized into M.). --;- --'-et and Capital market. In the previous Unit, we have studied the functioning of money market and its various instruments. In this Unit, we will deal with the capital market.

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he process of industrial growth ,requires the development of the capital market, Which provides ,long-term finance to entrepreneurs. The capital market is a wide term and includes all transactions involving long-term funds. The development banks, commercial banks, financial .institutions and stock exchanges, are its important components. The Securities and Exchange Board of India (SEBI) is the regulator over the Capital Market, Capital market is an organized market for effective and efficient mobilization of funds from the

rlrxrlerous savers and transfers thc funds toethose who are in need of money to finance business operations either in the private sector or in the public sector. In other words, capital market brings together the parties who demand the funds (Industry and Business) and who supply the funds (Investors). Capital Market, therefore, is a link between savings surplus sector (Household) and
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