Distinguish between the following: Private equity and Public issue.

CS Professional · Financial, Treasury and Forex Management · PYQS · June 2018
Distinguish between the following: Private equity and Public issue.

Answer & Explanation:

Private equity Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet. Generally, the private equity fund raise money from investors like Angel investors, Institutions with diversified investment portfolio like -pension funds, insurance companies, banks, funds of funds etc. Public issue Public issue of shares results in to offer of equity shares by the firm to the public at large. In turn, those shares are listed on the stock exchange. It enables the promoters to raise funds from the public, and public also gets a chance to invest in remunerative projects and to avail the share of benefits of company in form of dividend payment or/and capital gain.

Topics: Capital Market

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