process of issuing shares?

Question

how does a company issue shares. a whole process of issuing shares and all the parties involve in it.

Answer 1

Issue of Shares by a company is a big process, which is mainly depends on the local laws governing the stocks & shares.

In India, Companies Act, 1956 governs the rules that need to be followed while issueing shares either to private or public. In case of going public, SEBI (Securities Exchange Board Of India) has strict norms to list the shares in stock exchange(s).

It is by itself a big chapter. I try to put it in lay man's language. Usually, the company will open the offer of issuing shares to public for a period of time, within which public has to apply for the share with application money. After the closure of offer, the company will allot share based on the number of application received. In case of oversubscription, pro-rata basis allotment will be made. The basis will vary depending on the amount of oversubscription. Say if the offer is oversubscribed by 50 times, then all those applicants applying for a minimum of 100 shares might not be alloted anything. And 10% of shares may be alloted for those who apply 200 - 400 shares... and like it is decided based on the oversubscription of offer.

Now a days, almost all companies issue shares by way of Book-Building Excercise, where the price of the share will be determined based on the response from investors. A range of price will be given for offer and then the final price will be decided after closure of officer. By this way, the company stands gain to the maximum (those intend to buy shares to make IPO gains now stands to loose to the gains to the companies itself ;))

Answer 2

IPOs (Initial Public Offerings)

Answer 3

DEPENDS, ON WHO IS A THE BOARD OF DIR. TAKE VOTES/AND OR CEO, COMPTROLLER, JR. SR PARTNERS. GOES BY #S AND ALSO INVESTING, ALL OTHER POSITIONS IN A COMP.