Why do Companies Issues Shares and Types of Primary Market Issuance


Why do Companies Issues Shares?
Raise money from investors who want to invest their money. Investing money in the company allows the shareholders a stake in the company’s equity. And on the other hand, shareholders get a share in profits of a company, in the form of dividends, bonus, etc. Keeping in view the primary market, there are some primary market instruments that help the company to raise money like stocks, bonds, debentures.
 


Types of Primary Market Issuance
  1. Public issue
  2. Private Placement
  3. Preferential Issue
  4. Qualified Institutional Placement
  5. Right and bonus issues

Conclusion
Companies prefer raising money from sharing equity to investors instead of loans from banks. Share equity to investors, allow the shareholders a stake in company and shareholders get a share in profits of a company, in primary markets, there are five types of issuance.

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