Why is a share issued?
A Company as it grows from a partnership to a private company and then to a public Company has to raise money at some point of time as their requirement for money increases. Money can be raised either through borrowings or through equity. In Borrowings the money has to be repaid with interest to the lenders which is expensive. In equity the buyers of the shares are owners of the company. Equity financing is cheaper as it not to be repaid.
The BSE Sensex came down to 18664 down by 68 points and the NIFTy down by 23 points coming down to5519. Markets overall looked positive thouth the index came down at the end. The results are mixed and the rupee is crashing everyday. The Commerce Minister mentions that we have a trade deficit with 80 countries, which is not a good thing. With the elections around and weak economic scenario, markets will be shaky. It is better to buy at lows and sell at highs, go right here.
For a share to be traded on the Stock Exchange, it has to be listed there first. For this a listing fee has to be paid first.25% of the capital of the company has to be sold to the public, before listing. It is a rule now that, 25% of the capital is to be given to the public if the share is to be listed on the Stock Exchange.
