Public Issue

Investments

Quick Definition

A Public Issue is the process by which a company offers its securities (shares or bonds) to the general public to raise capital.

Detailed Explanation

A Public Issue allows companies to raise funds by inviting investors to subscribe to their securities. It can be done for the first time (IPO) or by already listed companies (FPO).

Public issues are conducted through stock exchanges like the National Stock Exchange and Bombay Stock Exchange and regulated by the Securities and Exchange Board of India.

Types of Public Issues

  • Initial Public Offering (IPO): First-time issue of shares
  • Follow-on Public Offer (FPO): Additional shares by listed company
  • Rights Issue: Offered to existing shareholders

Why Public Issue Matters

  • Helps companies raise capital
  • Provides investment opportunities
  • Enhances company visibility and credibility

Advantages

  • Access to large pool of investors
  • Liquidity for shareholders
  • Growth and expansion funding

Risks

  • Market volatility
  • Oversubscription or undersubscription
  • Pricing risks

Example

"A company launches an IPO to raise ₹500 crore from the public—this is a public issue."

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