Book Building and Rights Issues Quiz

<p>They assist and manage the book building process for the issuer. (A)</p> Signup and view all the answers

<p>It offers flexibility in price and demand discovery based on past data. (D)</p> Signup and view all the answers

<p>The average of the weekly high and low closing prices for two weeks prior (C)</p> Signup and view all the answers

<p>It is limited to qualified institutional buyers only. (B)</p> Signup and view all the answers

<p>To ensure equitable distribution of shares among existing shareholders. (B)</p> Signup and view all the answers

<p>Additional shares based on their current ownership. (D)</p> Signup and view all the answers

<p>Shares are issued from the company's free reserves. (A)</p> Signup and view all the answers

<p>The right of shareholders to receive additional shares before any new investors. (D)</p> Signup and view all the answers

<p>There are no underwriting or brokerage costs involved. (B)</p> Signup and view all the answers

<p>Shares may become concentrated in the hands of a few investors. (D)</p> Signup and view all the answers

<p>BOLT (C)</p> Signup and view all the answers

<p>Transactions are executed through a computer terminal. (C)</p> Signup and view all the answers

<p>Mobile-based trading (C)</p> Signup and view all the answers

<p>By entering order details into a computer system. (C)</p> Signup and view all the answers

<p>VSAT (C)</p> Signup and view all the answers

<p>Buy and sell securities from anywhere using the internet. (D)</p> Signup and view all the answers

<p>Screen based trading, where trades are executed electronically. (D)</p> Signup and view all the answers

<p>Public offers and private placements are done through online systems. (A)</p> Signup and view all the answers

<p>The lead manager (B)</p> Signup and view all the answers

<p>90% (B)</p> Signup and view all the answers

<p>Mailing allotment letters (B)</p> Signup and view all the answers

<p>Finalizing the issue price (B)</p> Signup and view all the answers

<p>The public issue must be terminated and application money refunded. (B)</p> Signup and view all the answers

<p>Supervision of application forms (C)</p> Signup and view all the answers

<p>Assisting from prospectus preparation to share listing (B)</p> Signup and view all the answers

<p>Ensuring minimum subscription levels are met (D)</p> Signup and view all the answers

<p>Issuer in consultation with the lead merchant banker (D)</p> Signup and view all the answers

<p>Number of shares being offered and price (C)</p> Signup and view all the answers

<p>A summary of the prospectus with key features (D)</p> Signup and view all the answers

<p>It replaces the prospectus for companies not issuing one (C)</p> Signup and view all the answers

<p>Based on the demand for the issue (C)</p> Signup and view all the answers

<p>It includes details of the company’s board members (A)</p> Signup and view all the answers

<p>Rights issue of shares (B)</p> Signup and view all the answers

<p>Final issue price and issue size (C)</p> Signup and view all the answers

<p>National Stock Exchange (NSE) (D)</p> Signup and view all the answers

<p>1992 (B)</p> Signup and view all the answers

<p>IDBI (D)</p> Signup and view all the answers

<p>Automated screen based trading (B)</p> Signup and view all the answers

<p>Wholesale Debt Market (WDM) (D)</p> Signup and view all the answers

<p>₹ 2 crores (D)</p> Signup and view all the answers

<p>Internet trading and derivatives trading (C)</p> Signup and view all the answers

<p>Board makes key-policy decisions while the executive committee takes operational decisions (C)</p> Signup and view all the answers

A method of issuing shares where the company sets a fixed price for the shares in the offer document.

A method of issuing shares where the company sets a price range (band) and the final price is determined by market demand.

The offer document used in a public issue. It contains crucial details about the company.

A type of prospectus that doesn't show the issue price but discloses the price band.

A document describing the offering, including the essential details for a public share issue or rights issue. For rights issue it's Letter of Offer; for public issue it's Prospectus.

A range of prices (minimum and maximum) for a book-built issue.

A document used by companies with existing share capital that haven't issued a prospectus.

A shortened version of a prospectus, outlining the key features.

A method where listed companies offer new shares only to qualified institutional investors. It's used for companies not meeting SEBI's public shareholding requirements.

Existing shareholders receive new shares, maintaining proportional voting rights and ownership.

The right of existing shareholders to get a proportion of new shares before they are offered to outsiders.

The date used by a company to determine who its shareholders are for a rights issue.

Existing shareholders receive additional shares from company reserves without paying, increasing equity capital.

A large, institutional investor allowed to participate in specific share offerings.

The price at which a new share is offered, potentially different for rights issues.

A document given with rights issues, outlining details and conditions.

A process where investors submit bids for securities based on a price range set by the issuer. The final price is determined by demand.

The issuer of the securities sets the price band, which is a range of prices within which investors can place bids.

Lead merchant bankers appointed by the issuer to manage the book building process.

Intermediaries appointed by the Book Runners to collect bids from investors and act as underwriters.

The Bombay Stock Exchange is one of India's oldest and most prominent stock exchanges. It was established in 1875 and is headquartered in Mumbai, previously known as Bombay.

The National Stock Exchange of India is a major stock exchange, known for its modern, fully automated trading system. It was established in 1992 and is headquartered in Mumbai.

The two main stock exchanges in India are the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).

The NSE aims to provide a nationwide platform for investors to buy and sell securities, ensuring transparency and efficiency through its automated trading system.

The Wholesale Debt Market (WDM) segment of the NSE facilitates the trading of various debt instruments like government securities, bonds, and commercial papers.

The Capital Market segment of the NSE provides a platform for trading equities or shares, allowing investors to buy and sell ownership in companies.

To be recognized as a member of the NSE, individuals or institutions must possess at least two years of experience in banking or finance, have a minimum net worth of ₹2 crore, and primarily engage in securities business.

The lead manager is responsible for preparing the Draft Red Herring Prospectus (RHP) and ensuring its accuracy. They are also accountable for any irregularities found in the RHP.

The company must sign a formal agreement with the issue managers, outlining the terms of the public offering. This agreement must follow SEBI's prescribed format.

These activities involve tasks such as coordinating with government bodies, ensuring compliance with regulations, appointing intermediaries, finalizing the issue details, and setting the price band.

Once the shares are issued, the focus shifts to managing the process, including collecting applications, handling allotments, and ensuring the shares are listed on the stock exchange.

This role is crucial in post-issue management, overseeing processes like application collection, allotment procedures, and ensuring compliance with regulations.

Underwriters ensure that the public offering reaches the minimum subscription target. If the target isn't met, they may need to buy the unsold shares.

A public offering is considered successful only when it reaches at least 90% of the targeted subscription amount.

This occurs when the public offering fails to reach the minimum subscription level required by SEBI. The company must then terminate the offer and refund the application money.

A system where brokers use computers to buy and sell securities electronically, replacing the old open outcry method.

The BSE's computerized trading system, where brokers input orders from their offices.

The NSE's computerized trading system, similar to BOLT.

Satellite communication links used to connect NSE members' computers to the central system.

Another name for Screen Based Trading, as trades are done through computers even when the exchange is closed.

Trading securities through the internet, allowing investors to transact from home or office.

The open outcry system was replaced by screen-based trading, where brokers use computers to buy and sell securities electronically instead of shouting orders on the trading floor.

Online trading makes buying and selling securities more convenient, accessible, and faster, as investors can do it from their homes or offices.