A public issue is a problem or concern that affects a significant number of people. It is an issue that is open to debate and can be addressed through public policy. Public issues can be local, national, or international in scope.
In the context of finance and investments, "public issues" refer to the process through which companies raise capital by offering securities (such as stocks or bonds) to the general public. It is a way for companies to obtain funds for their business operations or expansion by selling ownership stakes or debt instruments to individual investors or institutions.
There are two common types of public issues:
1. Initial Public Offering (IPO):
An IPO occurs when a private company decides to go public by offering its shares to the public for the first time. In an IPO, the company issues new shares, and the proceeds from the sale of these shares go directly to the company. The company becomes publicly traded, and its shares are listed on a stock exchange, allowing investors to buy and sell the shares in the secondary market.
2. Follow-on Public Offering (FPO):
After a company has already conducted an IPO and is listed on a stock exchange, it may decide to raise additional capital by issuing more shares to the public. This is known as an FPO. In an FPO, existing shareholders may also sell some of their shares to the public, but the proceeds from the sale of new shares still go to the company.
Public issues provide companies with an opportunity to access a large pool of potential investors and raise substantial funds for various purposes, such as funding expansion projects, paying off debts, or investing in research and development. On the other hand, investors can participate in public issues to become partial owners of the company or to earn interest payments through bond issuances. However, investing in public issues carries inherent risks, and potential investors should carefully analyze the company's financial health and prospects before making any investment decisions.
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Answer:
Public Issue Definition
A public issue is a problem or concern that affects a significant number of people. It is an issue that is open to debate and can be addressed through public policy. Public issues can be local, national, or international in scope.
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Explanation:
In the context of finance and investments, "public issues" refer to the process through which companies raise capital by offering securities (such as stocks or bonds) to the general public. It is a way for companies to obtain funds for their business operations or expansion by selling ownership stakes or debt instruments to individual investors or institutions.
There are two common types of public issues:
1. Initial Public Offering (IPO):
An IPO occurs when a private company decides to go public by offering its shares to the public for the first time. In an IPO, the company issues new shares, and the proceeds from the sale of these shares go directly to the company. The company becomes publicly traded, and its shares are listed on a stock exchange, allowing investors to buy and sell the shares in the secondary market.
2. Follow-on Public Offering (FPO):
After a company has already conducted an IPO and is listed on a stock exchange, it may decide to raise additional capital by issuing more shares to the public. This is known as an FPO. In an FPO, existing shareholders may also sell some of their shares to the public, but the proceeds from the sale of new shares still go to the company.
Public issues provide companies with an opportunity to access a large pool of potential investors and raise substantial funds for various purposes, such as funding expansion projects, paying off debts, or investing in research and development. On the other hand, investors can participate in public issues to become partial owners of the company or to earn interest payments through bond issuances. However, investing in public issues carries inherent risks, and potential investors should carefully analyze the company's financial health and prospects before making any investment decisions.