Issue of Shares is the process in which companies allot new shares to shareholders. Shareholders can be either individuals or corporates. There are a two types of shares can be issue by the Company: Equity Shares or Preference Shares.
The different types of shares issues is based upon the who are the perspective investors, purpose of the company like to generate funds or for the benefit of its shareholders.The different types of shares issues in India are as follow:
1. Public Issue: When the issue is for the general public and anyone interested in to invest in the company can buy the shares. It can be further of two types as follows:
- Initial Public Offer (IPO)
- Further Public Offer (FPO)
2. Rights Issue: The listed company issues the securities only to the existing shareholders of its company. It is based on the ratio in which the shareholders are holding number of shares on any fixed date. Generally, the rights issues are on the discounted rate and are beneficial for the shareholders, so, they prefer to invest.
3. Bonus Issue: The shares given to the existing shareholders only without any consideration from them. These are issued on a fixed date based on the ratio to the number on shares held by the shareholder.
4. Private Placement: Here the company issues the securities to the selected group of investors not exceeding more than 49. It can be done in two ways as follows:
- Preferential Issue
- Qualified Institutional Placement (QIP)
