Capital Market

Capital Market:- A market which has a history of many fortunes and fall back. The topic is a vast topic and a complete subject in many management faculties. We will discuss these topics out of it.
1. Introduction.
2. Market Regulator.
3. Credit Rating.
4. Share Buy Back.
5. Leasing.

Introduction:- Capital Market is the instrument for a company in where it can extract money for future expansions and plans. There are three ingredients of market a Company a share holder and SPV(special purpose vehicle). The SPV is the most interesting so we start with it. For entering the market a company has to take help of a channel called Special Purpose Vehicle this vehicle will purchase the shares/bonds/securities of the company and sell it on its behalf as the company couldnot come of its own in the market. SPV is a financial instrument which is made to safe guard the interest of a common investor. The investor purchases the shares and that is with SPV which in turn reaches the company to fulfill its requirement. The SPV is a third party hence the company could not make injustice pricing hurting common investor the share/debenture/bonds/securities are the ways to help company grow and ultimately dividing profit to its share holders.

Market Regulator:- In this whole scenario there felt the need of an authority which can monitor and safe guard the interest of a investor and make laws to be followed both by the investor and the companies. SEBI is formulated in India to complete this gap. The work of this body is like a watch dog dedicated for monitoring the market and sit along with government to formulate such laws and directives which are investor and participating companies and save them from fraud or hostile take over. SEBI recommendations on company act are considered thoroughly by the government.

Credit Rating is the financial instrument through which the company and investor both could analyse the credit worth of an individual/institution this is formed post multiple scams inside and outside the country. The Body formulated and responsible for this job is called CRISIL.

Share buy back is the facility which makes a company secured from hostile take overs and help maintain liquidity in its accounts books. There are many buy back ways. But most important is Dutch buy back. Followed by many companies.

Leasing is a deal between two parties lessor and lessee in which an asset is given on rent with the condition that the lessee will return the same with the same condition. A deed is made between the parties which gives details of the property the tenure of agreement, rent amount and know how of lessor and lessee is documented. Later on the deed is authorised by the court and the deal is settled.

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