CBSE Class 12-commerce Answered
Incorporated in 1990. Raju Dairy Ltd., is one of the leading manufacturers and marketers of dairy-based branded foods in India. In the initial years, its operations were restricted only to collection and distribution of milk. But, over the years it has gained a reasonable market share by offering a diverse range of dairy based products including fresh milk, flavoured yogurt, ice creams, butter milk, cheese, ghee, milk powders etc. in order to raise capital to finance its expansion plans. Raju Dairy Ltd. has decided to approach capital market through a mix of Offer for sale of Rs. 4 crore shares and a public issue of Rs. 2 crore shares. In context of the above case: 1. Name and explain the segment of capital market being approached by the company. 2. Identify the two methods of floatation used by the company to raise the required capital. Give one difference between them.
Asked by purnayyap | 27 Apr, 2020, 07:13: PM
Expert Answer
The segment of capital market being approached by the company is Primary Market. It is a new issue market as the securities are issued for the first time by the companies through this market.
The two methods of floatation used by the company are Issue through Prospectus and Offer for Sale.
In case of issue through prospectus, the company approaches the members of the general public by issuing a Prospectus and
In case of Offer for sale, the company approaches members of the general public through intermediaries like issuing houses, stock brokers etc.
Answered by Surabhi Gawade | 28 Apr, 2020, 09:11: AM
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