OVERVIEW OF INDIAN CAPITAL

MARKETS

Primary market

Public issues

Right issues

Bonusissues

Secondary market

Equity market

Commodity market

Currency market

FINANCIAL MARKETS

Primary Market

Market for new issues.

The main objectives of a capital issue are given below:

To promote a new company. To expand an existing company. To diversify the production and modernization. To meet the regular working capital requirements. To capitalize the reserves.

Issuance Process

Public Issue- It is an invitation by a company to public to subscribe to the securities offered through a prospectus

Initial Public Offer (IPO) - When an unlisted company makes either a fresh issue of securities or offers its existing securities for sale or both for the first time to the public, it is called IPO.

Further Public Offer (FPO) - When an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, it is called an FPO.

  Right Issue- The issue of new securities to existing shareholders in a fixed ratio to

those already held is called Right Issue.

  Bonus Issue- Shares issued by companies to their shareholders free of cost by

capitalization of accumulated reserves from the profits earned in the earlier years.

GRADING OF IPO

Grade assigned by a Credit Rating Agency (CRAs) registered with SEBI.

Grade represents a relative assessment of the fundamentals of that issue in relation to the other listed equity securities in India.

Listing

Admission of securities to dealings on a recognized stock exchange

Objectives Provides liquidity to securities Mobilize savings for economic development Protects interest of investors by ensuring full

disclosures

Minimum Listing Requirements

In respect of Large Cap Companies The minimum post-issue paid-up capital of the applicant company shall be Rs. 3

crore The minimum issue size shall be Rs. 10 crore The minimum market capitalization of the Company shall be Rs. 25 crore

In respect of Small Cap Companies The minimum post-issue paid-up capital of the Company shall be Rs. 3 crore The minimum issue size shall be Rs. 3 crore The minimum market capitalization of the Company shall be Rs. 5 crore

Green Shoe Option

Mechanism for stabilizing post-listing price of the issue.

The cause of applying Green shoe Option-

The management of the issuer is not so confident about issue price what they are claiming from the investors due to high offer price compared to the peer groups in the market

SECONDARY MARKET

Market where securities are traded after being initially offered to the public in the primary market and listed on the stock exchange.

It comprises equity markets and debt markets. Secondary market further has two components,

namely the Over- The-Counter(OTC) Market and Exchange-Traded Market.

TRADING PLATFORMS

CURRENCY MARKET

• MCX-SX• BSE• NSE

COMMODITY MARKET

• MCX• NCEDX• NSME

EQUITY MARKET

• BSE• NSE

BOMBAY STOCK EXCHANGE

Oldest exchange in Asia

‘The Native Share & Stock Brokers Association’

First Stock Exchange to be recognized

BSE Facts

First in India to introduce Equity Derivatives. First in India to launch a Free Float Index. First in India to launch US$ version of BSE Sensex. First in India to launch Exchange Enabled Internet Trading

Platform. First in India to obtain ISO certification for Surveillance,

Clearing & Settlement. BSE On-Line Trading System (BOLT) has been awarded the

globally recognised the Information Security Management System standard BS7799-2:2002.

First to have an exclusive facility for financial training.

NATIONAL STOCK EXCHANGE

Scope of NSE

Recognized in 1993

OBJECTIVE

Establishing nationwide trading facility for all types of securities.

Ensuring equal access to investors all over the country through an appropriate telecommunication network.

Providing fair, efficient & transparent securities market using electronic trading system.

Enabling shorter settlement cycles and book entry settlements.

Meeting International benchmarks and standards.

CURRENCY MARKET

FOREIGN EXCHANGE MARKET:-

Purchase or sale of one national currency in exchange for another nation’s currency, usually conducted in a market setting

COMMODITY MARKET

COMMODITY:-Something that has commercial value, which can be produced, bought, sold, consumed and has liquidity.

COMMODITY MARKET:-A commodity market is an exchange where buyers and sellers come together to trade commodities.

There are three national and 19 regional commodity exchanges in India.

MCX-SX

Launch: A Humble Beginning

Currently MCX-SX offers Currency Futures contracts

Clearing and Settlement is conducted through the MCX Stock Exchange Clearing Corporation Ltd (MCX-SX CCL)

Stupendous Growth in just 1 year

Headquarters: Mumbai

It is a demutualised nationwide electronic commodity futures exchange

Operational since ‘03.

Achievements

MCX has achieved three ISO certifications:

ISO 9001:2000 for quality management ISO 27001:2005 - for information security

management systems ISO 14001:2004 for environment management

systems

Benefits of MCX-SX

MCX-SX provides a host of benefits to a wide range of financial market participants, including hedgers (i.e. exporters, importers, corporates, and banks), and investors.

Hedgers: MCX-SX provides a high-liquidity platform for hedging against the effects of unfavorable fluctuations in foreign exchange rates. Banks, importers, exporters and corporates can hedge on MCX-SX at low entry and exit costs.

Investors: All those interested in taking a view on appreciation (or depreciation) of exchange rate in the long and short term can participate in the MCX-SX currency futures. For example, if one expects depreciation of Indian rupee against US dollar, then he can hold on long (buy) position in the USD/INR contract for returns. Contrarily, he can sell the contract if he sees appreciation of the Indian rupee.

FACT FILE MCX is India's No. 1 commodity exchange with 84% Market share in

2008($0.84 trillion) The exchange's competitor is National Commodity & Derivatives Exchange Ltd

(NCDEX) Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and

gold in futures trading The crude volume touched 23.49 Million barrels on January 3, 2009 The highest traded item is gold with an average monthly turnover of Rs 1.42

Trillion ($29 Billion). MCX has 10 strategic alliances with leading commodity exchange across the

globe MCX recorded its Highest Daily Turnover since inception of Rs. 51,626.51

crores on November 27, 2009   The average daily turnover of MCX is about US$ 2.4 billion MCX COMDEX is India's first and only composite commodity futures price

index

CONCLUSION

High Tide Future of India Pioneers of the

future