Which of the following is NOT a part of the primary market?(1.0 Marks)Initial Public Offer (IPO)AFollow-On Public Offer (FPO)BOffer For Sale (OFS)CBonus Issue
Question
Which of the following is NOT a part of the primary market?(1.0 Marks)Initial Public Offer (IPO)AFollow-On Public Offer (FPO)BOffer For Sale (OFS)CBonus Issue
Solution
The option that is NOT a part of the primary market is Bonus Issue.
Here's why:
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Initial Public Offer (IPO): This is the first time a company's shares are offered to the public for purchase. It's a way for a company to raise capital and is definitely a part of the primary market.
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Follow-On Public Offer (FPO): This is when a company, which is already publicly listed, offers additional shares to the public. This too is a part of the primary market.
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Offer For Sale (OFS): This is a simpler method of share sale through the exchange platform for listed companies. This is also a part of the primary market.
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Bonus Issue: This is when a company issues additional shares to existing shareholders free of cost, based on the number of shares the shareholder owns. This is not a part of the primary market as no new capital is being raised by the company. It's a part of the secondary market.
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