Managing of issues of shares and bonds
07/December/2025 22:17
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? Managing Issues of Shares and Bonds — With Case Studies & Examples
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1️⃣ What is New Issue Market (NIM)? – With Example
The New Issue Market (Primary Market) is where companies issue securities for the first time to raise capital.
⭐ Example
When Zomato launched its IPO in 2021, it raised ₹9,375 crore. This money was used for:
Expansion of business
Marketing
Funding delivery infrastructure
This is a classic example of the New Issue Market in action.
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2️⃣ Role of New Issue Market – Linked with Case Study
The NIM plays a key role in economic development by connecting company fund requirements with investor savings.
⭐ Case Study: LIC IPO 2022
Life Insurance Corporation (LIC) issued India’s largest IPO worth ₹21,000 crore.
Role of the NIM here:
Mobilized huge public savings
Allowed government to meet disinvestment targets
Deepened India’s capital market
This shows how the NIM supports both private and government finance.
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3️⃣ Mechanism of Floating New Shares or Bonds — With Examples
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A. Public Issue (IPO/FPO)
Example:
Nykaa IPO (2021) used book building to decide its price at ₹1,125 per share.
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B. Private Placement
Companies issue securities to a select group.
Example:
Tata Motors raised ₹3,000 crore by privately placing NCDs (Non-Convertible Debentures) with institutional investors.
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C. Rights Issue
Shares are offered to existing shareholders.
Example:
Reliance Industries Rights Issue 2020 — raised ₹53,124 crore and became India’s largest rights issue.
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D. Preferential Allotment
Shares are offered to specific investors.
Example:
Yes Bank preferential allotment 2020 to SBI and others saved the bank from collapse.
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E. Offer for Sale (OFS)
Promoters sell shares through stock exchange bidding.
Example:
The Government used OFS to sell stake in Coal India and raised ₹5,000 crore.
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4️⃣ Listing of Shares — With Example
Listing allows shares to be traded on a stock exchange.
⭐ Example
When Tata Technologies listed in 2023, its share price jumped over 162% on listing day.
This shows:
Listing increases liquidity
Encourages investor confidence
Enhances company valuation
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5️⃣ Requirements for Listing — With Real Example
NSE/BSE require:
Minimum paid-up capital
Track record of profits
Corporate governance norms
Minimum public shareholding (25%)
⭐ Example
Mamaearth’s parent Honasa Consumer had to meet SEBI’s transparency, DRHP norms, and compliance before listing in 2023.
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6️⃣ Market Strategy for Public Issues — With Case Studies
A. Market Timing
⭐ Example:
Delhivery IPO launched during favourable e-commerce boom, helping it succeed.
B. Price Band Strategy
⭐ Example:
Zomato used book building and set its price based on investor demand.
C. Brand Building
Companies use:
Roadshows
Investor presentations
Social media
⭐ Example:
LIC conducted nation-wide promotional roadshows, increasing subscription.
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7️⃣ Merchant Bankers — Case Studies & Roles
Merchant bankers (Lead Managers) play the most important role.
⭐ Real Merchant Bankers:
Kotak Mahindra Capital
ICICI Securities
HDFC Bank
Axis Capital
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Case Study 1: Zomato IPO – Role of Merchant Bankers
Lead managers:
Kotak Mahindra Capital
Morgan Stanley
Credit Suisse
ICICI Securities
They handled:
DRHP filing
Pricing strategy
Investor marketing
Book building
Allotment and listing
Their expertise ensured a highly successful IPO.
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Case Study 2: Paytm IPO – An Example of Poor Issue Management
Paytm’s IPO (2021) was India’s most controversial issue:
Poor pricing strategy
Overvaluation
Weak communication
Result:
Share price fell 40% on listing day.
This is a perfect negative case study showing why proper issue management is critical.
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8️⃣ Managing Issues of Bonds — With Examples
Companies also raise funds through debentures or bonds.
⭐ Example: HDFC Bank Bond Issue
HDFC Bank issued AT-1 bonds worth ₹6,000 crore to strengthen its capital base.
⭐ Example: Government Securities
Government issues:
T-bills
Dated securities
Sovereign gold bonds
These are managed by RBI and primary dealers.
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9️⃣ Complete Case Study — Reliance Jio Bond & Share Issue
Reliance consistently uses:
Rights issues
Bond issues
Private placements
2020 Rights Issue
Raised ₹53,124 crore
Used for:
Reducing debt
Expanding Jio and retail business
2023 Bond Issue
Reliance raised ₹20,000 crore via non-convertible debentures (NCDs).
Shows:
Companies use multiple instruments
Merchant bankers coordinate everything
Listing ensures liquidity
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? Brief Full Notes Summary with Examples
Topic Explanation Real Example
New Issue Market Market for new securities LIC IPO
Public Issue IPO, FPO Zomato IPO
Private Placement Limited investors Tata Motors NCD issue
Rights Issue To existing shareholders Reliance Rights Issue
Preferential Allotment Selected investors Yes Bank rescue
Book Building Price discovery Nykaa IPO
Listing Trading on stock exchange Tata Technologies listing
Merchant Bankers Issue managers Kotak, ICICI Securities
Market Strategy Promotion, pricing Delhivery IPO
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11️⃣ Conclusion
Managing issues of shares and bonds is a strategic, regulated, and highly professional process. Companies require:
Merchant bankers
SEBI approvals
Marketing strategy
Proper pricing and timing
Case studies like Zomato, LIC, Reliance, Tata Technologies, Yes Bank, and Paytm show how good or bad issue management affects investor confidence and company valuation.
