Economics with Insight

1 .  Lack of Storage Facility: 2.  Distress Sale: 3.  Lack of Transportation: 4.  Unfavourable Mandis: 5.  Intermediaries: 6.  Unregulated Market’s: 7.  Lack of Market Intelligence: 8.  Lack of Organisation: 9.  Lack of Grading: 10.  Lack of Institutional Finance 11.  Unfavorable Conditions: 12. Unfavorable agricultural price policy 13. Multiple charges 14. Lack of proper knowledge etc.

What are the different kinds of Issues? Primarily issues can be classified as a Public, Rights or preferential issues (also known as private placements). When public and rights issues involve a detailed procedure, private placements or preferential issues are relatively simpler. The classification of issues is illustrated below;  Public issues can be further classified into initial Public offerings and further public offering. In a public offering, the issuer makes an offer for new investors to enter its shareholding family. The issuer company makes detailed disclosures as per the DIP guidelines in its offer document and offers it for subscription. The significant features are illustrated below: Initial Public Offering (IPO)   is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for the listing and trading of the issuer’s securities. A Furt...

ROLE OF SEBI IN THE CAPITAL MARKET: 1.        Power to make rules for controlling stock exchange: - SEBI has power to make new rules for controlling stock exchange in India. For example, SEBI fixed the time of trading 9 AM and 5 PM in stock market. 2.        To provide license to dealers and brokers: - SEBI has power to provide license to dealers and brokers of capital market. If SEBI sees that any financial product is of capital nature, then SEBI can also control to that product and its dealers. One of main example is UPIL’S case SEBI said, " It is just like mutual funds and all banks and financial and insurance companies who want to issue it, must take permission from SEBI." 3.        To Stop fraud in Capital Market: -  SEBI has many powers for stopping fraud in capital market. It can ban on the trading of those brokers who are involved in fraudulent and unfair trade practices ...

Introduction: Development banks are special industrial financing institutions. These banks are mostly set up after World War II in both developed and underdeveloped countries. Development banks do not mobilize savings like other banks but invest the resources in a productive manner. These banks make significant contribution to industrial development. Meaning : Development Banks are the institutions engaged in the promotion and development of industry, agriculture and other key sectors. A development bank is an institution which takes up the job of developing industrial enterprises from its inception to completion. Definition: D.M.Mithani states that, “A development bank may be defined as a financial institution concerned with providing all types of financial assistance (medium as well as long term ) to business units.  William Diamond and Shirley Bosky consider industrial finance and development corporations as ‘development banks’ Fundamentally a deve...

W.J. BAUMOL’S SALES MAXIMISATION (Without Advertisement) Baumol’s findings of oligopoly firms in America reveal that they follow the sales maximization objective. According to Baumol, with the separation of ownership and control in Morden Corporation, managers seek prestige and higher salaries by trying to expand company sales even at the expense of profits. Being a consultant to a number of firms, Baumol observes that when asked how their business went last year, the business managers often respond, ‘’our sales were up to 3 million $’’. Thus, according to Baumol, revenue or sales maximization rather than profit maximization is consistent with the actual behavior of firms. Baumol cites evidence suggesting that shot-run revenue maximization may be consistent with long-run profit maximization. But sales maximization is regarded as the short-run and long-run goal of management. Sales maximization is not only a means but an end in itself. He gives a number of arguments is the sup...

Merchant Banking Meaning Meaning: Merchant Banking is a combination of Banking and consultancy services. It provides consultancy to its clients for financial, marketing, managerial and legal matters. Consultancy means to provide advice, guidance and service for a fee. It helps a businessman to start a business. It helps to raise (collect) finance. It helps to expand and modernize the business. It helps in restructuring of a business. It helps to revive sick business units. It also helps companies to register, buy and sell shares at the stock exchange.   MERCHANT BANKS DO TWO TYPES OF WORKS. 1 BANKING SERVICES- IT HELP TO BUSINESSMEN TO START  A BUSINESS AND HELP TO COLLECT MONEY. 2 CONSULTANCY SERVICES-   IT PROVIDES CONSULTANCY TO ITS CLIENTS FOR  FINANCE, MARKETING ETC. In short, merchant banking provides a wide range of services for starting until running a business. It acts as Financial Engineer for a business. Merchant banking was fi...