Hello,
I am new in Personal Finance and I am not from Finance studies background. From Last one month I gather lot information regarding Investment vehicles in India economy. Thanks a lot to CA, CS & CMA those offering online classing. And thank lot you for your website, which is very good for investors like us.
I have few questions:
- Why Public companies borrows money from Public using IOP, Mutual Funds, Debt, Bounds etc.? Why the don't go to bank and get money? Like on Debt they pay higher interest rate than Bank. Than why the don't take loan from bank?
- Is investment in mutual funds (like Equity MF) always in Primary Market? or in both?
- Let say Investor invests money in a company IPO. Say he took 100 share of Rs. 1 Lac. So as per Balance Sheet it is under Capital head. So if company earn profit then how it distribute to its Share holder? Is company pay Internet or pay bounce or Dividend or distribute Profit/Loss with Share holders. I am talking about Equity Share Holder. And I think company distribute dividend to preferential share holders.
- What is there is no buyer in secondary market and I need to liquidate my Mutual Fund & Stock?
2 Answers
Hi,
I am not an expert on Company matters, you may post these queries to a CA or CS :)
The MF corpus is invested based on respective Fund's investment objective and strategy.
For ex: The investment objective of an equity fund like SBI Bluechip fund is "to provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of equity stocks of companies whose market capitalization is at least equal to or more than the least market capitalized stock of BSE 100 Index."
So, these investments can be secondary or primary market ones.
Kindly note that you can redeem mutual fund units and there should not be any issues with this.
Thank you for valuable info!
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