The capital market is one of the most important areas of focus for every country since it may alter the country's financial condition and manage the economy. The capital market is significant because it aids in the allocation of cash and the mobilization of resources. Understanding and regulating the capital market has been a critical prerequisite for the country's industrial and commercial development. The markets are primarily concerned with debt and equity securities. The RBI (Reserve Bank of India) is the primary regulatory authority, with assistance from the Ministry of Finance and the SEBI (Security Exchange Board of India).
The lawyers at King Stubb and Kasiva a Capital Markets Law Firm in India have deep expertise in assisting transactions involving complex issues of capital markets in the following areas:
Approach At KSK
The Indian capital market has developed with advancements in the domain of indirect financing. Further, Foreign institutional investors (FIIs) have been encouraged to invest in the country's primary and secondary capital markets. These factors have led to certain regular changes in the regulations applicable to Indian capital markets. The markets are also affected by the implementation of technology in various aspects such as settlement and recording. This requires a multi-dimensional approach from the lawyers. At KSK, we are result-oriented and focus on having a comprehensive understanding of every client’s unique requirement. We leverage our expertise with technological advancements to offer cost-effective and appropriate legal solutions. We have successfully advised various companies, investors, portfolio managers, banks, and investors with high-value transactions.
A company issues shares to the general public for the first time through an initial public offering (IPO). The company has very few shareholders before the IPO. Founders, angel investors, and venture capitalists are all included in this. However, the corporation makes its shares available for public purchase during an IPO. You can become a shareholder and purchase shares directly from the business as an investor. This is often done to a) generate money for development and expansion; b) enable owners and early investors to sell their interest to make money, and c) promote the name of the brand.
When a company plans to raise money from the public by selling shares of the business to investors, SEBI (Securities and Exchange Board of India) requires that the business submit a Red Herring Prospectus, also known as an offer document. Because it includes comprehensive information on the company's activities, finances, promoters, and goals for filing an IPO, the document is particularly helpful to investors. Additionally, it describes the potential risks for investors as well as how the firm plans to use the funds that will be obtained.
The secondary market is where these securities are exchanged, whereas the primary market is where securities are formed. The main market is where a business raises money for the first time. For instance, businesses only conduct Initial Public Offerings (IPOs) on the primary market. The secondary market lists the company's primary market-issued shares. The secondary market includes all exchanges such as the BSE, NSE, NASDAQ, etc.
Although the capital market in India is governed by several pieces of regulations, some of them are The Depositories Act,1996, Securities Contract (Regulation) Act, 1956, Security and Exchange Board of India Act,1992, Companies Act, 2013, and RBI Act, 1934.
