IPO (Initial Public Offer), FPO (Follow-on Public Offer) and QIP (Qualified Institutional Placement)

Largely there are two sets of participants in Stock Markets; Institutional Investors and Retail Investors. If a company wants to issue shares to ‘public’ for the first time, it should go for IPO or Initial Public Offer. Only after the IPO process company gets listed in stock exchanges. When an already listed company goes for additional issue of shares to ‘public’ it is called FPO (Follow-on Public Offer). When an already listed company goes for issue of shares to Qualified Institutional Buyers (QIB) it is called, QIP (Qualified Institutional Placement). QIP is largely a fund raising tool for listed companies and this tool is introduced by SEBI to ensure hassle free access to fund in domestic market. QIP simplifies the process and reduces the paper works with market watch dog.

Upper Circuit and Lower Circuit in Stock Markets

Price volatility is one of the most basic attributes of financial markets. It is the measure of uncertainty and that adds up risk element in markets. But too much of volatility possess risk to the share holders. In order to regulate extreme price movements of stocks or securities exchanges introduced the mechanism of circuits. These circuit filters are also known as price bands. An upper circuit is the maximum percentage increase in price of a stock for a given trading session. A lower circuit is the maximum percentage decrease in price of a security for a trading session.

Who are Share Market Advisors and how do they work?

A stock advisor is an expert who recommends an investment opportunity to a client based on the investment interest and risk profile of the customer. They should analyze not only the performance of securities but they should give due diligence on the risk appetite of the clients. They help the clients to decide on how much to invest in various asset classes such as debt securities, equities, real estate and commodities. They also provide advises on investing in various funds such as mutual funds, Exchange Traded Funds and Index funds. A stock market advisor must get registered with SEBI to provide recommendations to his/her clients.

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