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Treasury Bills (T-bills): Short-term government securities with a maturity of less than a year. Issued by the Central Government through the Reserve Bank of India (RBI). Highly liquid and low-risk instruments. Sold at a discount to face value and redeemed at...

Deregulation of Interest Rates: Starting from May 1989, the RBI removed the ceiling on interest rates for various money market instruments, allowing market forces to determine these rates. This marked a shift away from the system of administered interest ra...

Definition of Monetary Policy Monetary policy is a macroeconomic policy managed by the central bank. It involves managing money supply and interest rates to achieve various macroeconomic goals, such as controlling inflation, promoting growth, and ensuring fin...

A credit policy is a set of rules and standards that govern how companies grant credit to customers and handle collections. It outlines credit terms, creditworthiness assessments, cash discounts, credit limits, collection procedures, and customer information ...

The Reserve Bank of India (RBI) plays a multifaceted role in the Indian money market, and its functions have significant implications for the broader economy. Here's a closer look at the roles and functions of RBI in the Indian money market: Capital Formatio...

Capital markets are integral components of the global financial system, serving as conduits for the allocation of funds between entities with surplus capital and those in need of capital. These markets are pivotal in enabling economic growth and development by...

Capital markets are diverse financial ecosystems that encompass various types of markets, each serving unique purposes. Understanding these different types of capital markets is crucial for investors, businesses, and policymakers. Below is an overview of the m...

The primary market is a crucial component of the capital market that facilitates the raising of additional funds by governments, companies, and institutions through the issuance of debt and equity-related securities. Securities in the primary market encompass ...

The primary market, also known as the new issue market, involves several key constituents, each playing a critical role in its functioning: Companies and Issuers: These are the entities seeking to raise capital by issuing new securities. Companies and issuer...

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Private placement involves the sale of securities to a select group of private investors, such as institutional investors, venture capitalists, or accredited individuals. It is not offered to the general public. Private placements are often used by companies a...

A rights issue is an offering of additional shares to existing shareholders in proportion to their current holdings. Shareholders have the right, but not the obligation, to purchase the newly issued shares at a predetermined price. It is a way for companies to...

Bonus shares, also known as scrip dividends or capitalization issues, are additional shares that a company distributes to its existing shareholders free of charge, based on their current shareholding. These shares are issued as a reward to shareholders and are...

Here are some key points about QIP: Faster and Easier Equity Raising: QIP offers a quicker and more straightforward way for companies to raise equity capital compared to other methods like rights issues or follow-on public offerings (FPOs). This is because Q...

Step 1: Hire an investment bank A company seeks guidance from a team of underwriters or investment banks to start the process of IPO. More often than not, they take services from more than one bank. The team will study the company’s current financial situatio...

According to SEBI regulations, book building is essentially a method used in Initial Public Offering (IPO) to obtain an effective price. An IPO is opened for a specific time period, and then bids are gathered from investors at a range of values that fall withi...

Merchant banking encompasses a range of financial services, including the management of securities, portfolio management, underwriting, insurance, and offering financial advice and project counseling. Various financial institutions, such as large brokers, mutu...

A lead manager, also known as a bookrunner or lead underwriter, plays a pivotal role in the process of conducting an initial public offering (IPO) or other significant financial transactions. Their primary responsibility is to manage and oversee the issuance o...

A prospectus is a crucial legal document for market participants and investors. It provides comprehensive information about a financial product, enabling prospective customers to make informed decisions. The content and importance of a prospectus can vary depe...

In the IPO (Initial Public Offering) process, the price band is a critical element that helps determine the final offering price of the company's shares to the public. It is a range of prices within which investors can bid for shares during the IPO subscriptio...