The Issuer of Initial Public Offering (IPO) should be a company incorporated under the Companies Act 1956 / 2013 in India. A company with a profitable track record (in the last 3 financial years), a net worth of Rs. 3 crore, a debt-to-equity ratio below 2:1, and a pre-IPO market cap of Rs. 100 crore,…
Qualified Institutional Placement (QIP) may be defined as the allotment of securities by a listed company to Qualified Institutional buyers on a “private placement basis”. Private Placement means an offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) through the…
The primary market is where companies and governments issue securities, such as Shares, and Bonds, for the first time, and sell them directly to investors. The primary market is also known as the new issues market. The primary market is where companies offer their shares for the first time to the general public, the offer…
Capital markets are financial markets where financial securities and assets are bought and sold. Capital markets may include trading in bonds, derivatives, and commodities, in addition to stocks. A stock market is a particular category of the capital market that only trades shares of corporations. The primary market is predominantly known as the “new issue…
Financial regulators are government agencies responsible for overseeing and regulating financial institutions and markets. The role of regulators of financial sectors encompasses a comprehensive framework of laws, rules, and procedures established by governments and financial authorities. Its essential objectives are to maintain stability and integrity in the financial system, protect consumer interests, and foster fairness…
The money supply is the entire stock of currency and other liquid instruments circulating in a country’s economy at a specific time. The circulating money involves the currency, printed notes, money in the deposit accounts, and the form of other liquid assets. In India, the Reserve Bank of India follows M0, M1, M2, M3, and…
Repo suggests the rate at which liquidity is injected into the banking system whereas Reverse Repo is the rate at which RBI absorbs liquidity from the banks. RBI controls the money supply in the country by effecting the changes in repo rate & reverse repo rate. Therefore repo and SDF (reverse repo rate) are known…
A money market is said to be in equilibrium if the quantity of money demanded is equal to the quantity of money supplied at a particular rate of interest. A shift in money demand or supply in an economy will lead to a change in the equilibrium interest rate. The money market involves of money…
Interest rate in an economy is determined by the forces of demand and supply of money in a free market. The supply of funds is influenced by the willingness of consumers, businesses, and governments to save. The demand for funds reflects the desires of businesses, households, and governments to spend more than they take in…
The demand curve for money shows the quantity of money demanded at each interest rate. Its downward slope expresses the negative relationship between the amount of money demanded and the interest rate. Its downward slope expresses the negative relationship between the quantity of money demanded and the interest rate. The relationship between interest rates and…