Pipro Ltd. is a software company based in Bengaluru, India. It is already listed at National Stock Exchange. In order to expand its business in north-east under the Look East Policy of the government, it needs financial resources. State any two methods through which she can fulfill her financial requirements through Primary Market other than Public issue.

Question

Accepted Answer

Since Pipro Ltd. is already listed and needs additional funds for expansion in the north-east, the two methods through which she can fulfill her financial requirements through Primary Market other than Public issue are:

1. **Rights Issue:** This method involves offering additional securities to existing shareholders on a pro-rata basis, i.e., in proportion to the shares they are already holding. This is considered inexpensive as it does not require brokers, underwriters, prospectus, or enlistment.

2. **Private Placement:** This involves direct sale of securities to a limited number of sophisticated investors such as institutional investors like LIC, GIC, UTI, Army Group Insurance, etc. This method is useful when the company does not wish to disclose information to the open market.