Capital market; method of raising fund, offer for sale, offer/subscription, right issue, private placement. - SS3 Commerce Past Questions and Answers - page 1

Offer for Sale

To raise additional capital from existing shareholders

Select groups of investors

Offer/Subscription

Offer for sale raises funds for the company, while right issue benefits selling shareholders.

A right issue allows a company to raise additional capital from its existing shareholders. It provides an opportunity for shareholders to invest more in the company and maintain or increase their ownership stake. The funds raised through a right issue can be used for business expansion, reducing debt, or funding new projects.

Private placement involves selling securities directly to select groups of investors, such as institutional investors, venture capitalists, or private equity firms. It is a targeted approach, bypassing the general public. Private placement transactions are typically conducted through negotiations and involve issuing securities that are not publicly traded.