Public offering refers to the issuance of shares through the investment bankers to the large number of investors. When the new or privately held companies offer securities for the first time to public, it is termed as initial public offering. Under this method, the company who wants to raise fund issue prospectus to the mass public scattered throughout the country inviting offers for subscription. The prospectus issued by the company must be drafted in accordance with the guidelines of the security board and the provision of the company act. Interested investors having will can apply for the securities. Once the company received subscription from the investors, it makes allotment of securities.
In public offering, investment banker played important role as a mediator between issuing company and investors. It also performs the role of underwriter.
In public offering, investment banker played important role as a mediator between issuing company and investors. It also performs the role of underwriter.