A funding round is the process where companies, majorly startups seek to grow their business operations by raising external financing in exchange for equity. It is also referred to as Round Financing or Venture Round. According to Mark Suster, the single biggest mistake founders make is waiting until they have too little cash in the…
Domestic Foreign Currency-Denominated Bonds (DFCBs) are debt financial instruments issued by a domestic entity (such as corporations or governments), within the local market but denominated in a foreign currency. These bonds are governed by the domestic market’s regulations and are typically aimed at local investors, providing exposure to international currencies like the U.S. dollar (USD)…
A Right Issue means an offer of securities by an issuer to its shareholders at a particular date, usually in proportion to their existing holdings. You can read more about it in our Rights Issue Article. Although an equity right issue is more common in practice, right issues can either be debt or equity issues.…
A public offer is a process by which a company raises capital by offering its securities, such as stocks or bonds, to the general public. This type of offering allows anyone, including individual and institutional investors, to purchase the securities. Public offers are typically conducted through a stock exchange or over-the-counter markets and are subject…
One mode of raising capital through Equity Financing is the Rights Issue. A Rights Issue involves giving existing shareholders the right, not an obligation, to acquire additional shares (new shares) in the company, at a discount (rights offer price) to its current market price. It is structured in the form of an invitation to the…
What is a Bonus Issue? Bonus issues are additional shares issued to existing shareholders of a company at no cost. The new shares issued are based on the current holding. A bonus issue is also known as a Scrip Issue or capitalisation issue. During cash shortages, companies may seek to issue bonus shares to uphold…
Credit rating is an independent assessment of the creditworthiness of companies and governments, determining their solvency. It is based on the financial statements of these entities to assess if their business operations are sound. Rating agencies publish these ratings, generally categorizing them as either Investment Grade or Speculative Grade. Importance of Credit Ratings Regulatory Use:…