Players in primary market, Financial Management


Some important players in the primary market are:

Merchant Bankers

When a company approaches the public for funds, merchant bankers manage the process of public issue. They perform in the capacity of issue managers, lead managers and co-managers.


Next to merchant bankers are registrars to the issue who collect the applications, money and allocate shares to subscribers in consultation with the stock exchange. They issue allotment letters, share certificates, etc., within the schedules prescribed by the regulatory authority. Apart from these, they are also responsible for fulfilling the listing requirements and to see that the stocks are listed on the stock exchange.

Underwriters and Brokers

Underwriters subscribe to a certain amount of capital in the issue. They have to fill the gap, if any, due to the failure of subscription as planned. Brokers place the new issue in the market through their wide network and through sub-brokers.

Collecting and Coordinating Bankers

Collecting bankers collect the money in the form of cash, cheques, etc., for the subscriptions and the coordinating bankers correlate the collection information on subscriptions and convey the same to the underwriters and merchant bankers. A collecting banker may double up as coordinating bankers too.

Other Agencies

Other agencies like printers, advertisers and mailing agencies are also involved for providing publicity to the new issue.

Posted Date: 9/10/2012 5:36:00 AM | Location : United States

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