Page 60 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Unit 1: Introduction to Capital Market

2. All financial institutions, which .........................., ........................... and directly subscribe to Notes
the securities, are part of new issue markets.
3. The main function of new issue market can be divided into three service function, viz.
.............., .............. and ..............
4. Underwriting is an agreement whereby the underwriter promises to subscribe to a specified
number of shares or debentures or a specified amount of stock in the event of public
.............. to the issue.
5. The non-institutional underwriters are ..............

6. A .............. is an issue of equity shares or of convertible securities by listed companies to a
select group of persons, which is neither a rights issue nor a public issue.
7. .............. denotes 'an option of allocating shares in excess of the shares included in the
public issue'.
8. An .............. means 'prospectus' in case of a public issue or an offer for sale and 'letter of
offer' in case of rights issue.
9. A .............. has been defined as a person or group of persons who are instrumental in
formation of the company, who enable the company to start its commercial operations by
bringing in the necessary funds required for the concern.
10. In the post-liberalisation era, the companies are free to make any issue of capital in the
form they like and they can freely .............. the issues.
11. .............. indicates the freeze on transfer of shares.
12. The securities forming part of promoters' contribution and issued .............. to the promoters
shall be locked-in first for the specified period.
13. .............. are those institutional investors who are generally perceived to possess expertise
and the financial muscle to evaluate and invest in the capital market.

14. .............. is basically a capital issuance process used in Initial Public Offer (IPO), aiding
price and demand discovery.
15. .............. is a scheme under which a person or a company (generally a finance company)
undertakes to buy shares issued and allotted in a new issue from the allottees at a stipulated
price.

1.9 Review Questions

1. Make distinctions between new issue market and stock exchange.
2. What are the relationship between new issue market and stock exchange?
3. What do you think about the significance of new issue market?
4. Examine the different kinds of offer documents.

5. Make an analysis and write a note on lock-in of excess promoters' contribution and lock-
in of pre-issue share capital of an unlisted company.
6. What is difference between the shares offered through book-building and offer of shares
through normal public issue in your opinion?
7. What are the principal weaknesses of Indian stock market?
8. What are the major directions to reform the functioning of stock exchanges?

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