Recent Changes in Indian Capital Markets

Introduction to the Financial System Financial Instruments Financial instruments can be: • Equity This is usually through the selling of common shares and/or common stock. It gives the buyer some ownership of the firm and thus, voting power when it comes to electing the board of directors. Debt This is money that is borrowed from someone else. Debt must be repaid at set intervals. Debt can be divided into short and long-term debt. This should follow the matching principle where short-term assets should be funded with short-term debt.

Their consolidated size can create intense pressure points on all affected venues and change the purchasing dynamics of the market.

A stock market is where you buy and sell stock. The New York stock exchange is an example.

Stock Market is basically a stock exchange. An example of a stock market is the NASDAQ founded in 1971.

This case study describes the IPO of Bajaj Corp Ltd., the second largest company in the Shishir Bajaj Group of companies. It also enlists the objectives and the process of the IPO, issued on 02-08-2010. It describes the merchant bankers and underwriters involved, and discuss post-issue effects on the company.

The stock market is a market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, the stock market is one of the most vital components of a free-market economy, as it provides companies with access to capital in exchange for giving investors a slice of ownership in the company. The stock market makes it possible to grow small initial sums of money into large ones, and to become wealthy without taking the risk of starting a business or making the sacrifices that often accompany a high-paying career.

After some time researching I found a really well explained definition that says, “The stock market is the market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets Also known as the equity market the stock market is one of the most vital components of a free-market economy, as it provides companies with access to capital in exchange for giving investors a slice of ownership in the company. The stock market makes it possible to grow

Whenever companies need more money to open new business they either take out a financial loan or they have to present and issue their shares on the stock markets. Instead of a company raising capital for a business they can in-return issue shares because they have part ownership of the company. This is all considered to be the primary role of the stock market. The secondary role of the stock market is a market that plays an important role as the basic stool step for both, buyers and sellers to interact in exchange for shares. It is where investors go to buy and sell stocks that are to be traded on the market exchange.

A stock market is also known as an equity market. A market is an open market for the trading of company-held stock as well as their derivatives at a consented price. It is a large network of several thousands of money-making transactions. It does not have a physical existence as an entity. But at one fell swoop the stocks are listed on an actually accessible unit known as the stock exchange.

An equity market is the general place where stocks are sold. The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations System (NASDAQ) are two examples of equity markets. The market in which shares are issued and traded, either through exchanges or over-the-counter, is also known as the stock market. Investors bid for stocks by offering a certain price, and sellers asking for a specific price. When these two prices match, a sale occurs. Trading in the equity market is the cornerstone of a capitalistic economy because it helps facilitate capital formation and liquidity for entrepreneurs and businesses.

Each division serves a different purpose. Capital Markets department focuses on equity, fixed income, municipal, and loans. Capital Market uses premier new issuance systems with data to enable clients to execute deals more efficiently that will increase and get more out of their time and money. New issuance software includes bookbuilding system, roadshows and conference management, and electronic document delivery. All the applications are web based so this provides clients with smooth access to important data. Also under capital markets, investor prospecting solutions provide the most accurate and comprehensive institutional contact and profiles within the

A company needs funds to expand into new markets, while governments need money for everything from infrastructure to social programs. The problem large organizations run into is that they typically need far more money than the average bank can provide. The solution is to raise money by issuing bonds (or other debt instruments) to a public market. Thousands of investors then each lend a portion of the capital needed. Really, a bond is nothing more than a loan for which you are the lender. The organization that sells a bond is known as the issuer. The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills.

Financing methods of enterprises are categorized into the indirect financing and direct financing depending on whether financial institutions such banks are involved in the financing process. The indirect financing means financing acquired from financial institutions based on policy funds of the government or funds formed by the financial institutions themselves. And the direct financing means capital-raising through stocks or private bonds issued in the capital market. For the last several centuries, the financial markets have been dominated by the bank-centric indirect financial market. Today, however, the center of the financial market is moving toward the direct financial market thanks to the development of the financial market. The capital market has become an essential element not only of financing in the private sector but also of national economic development, because the scope of financial transactions has expanded by a great deal by means of securities such as stocks and bonds.

Role of SEBI – Pre-issue and Post-issue requirements & Conditions to be fulfilled by the Issuer Company:

provide normal access to the Indian market consistent with its MFN treatment. The Certificate of Origin for MFN export will be as prescribed in Annex D/II