Issue of equity shares
A public company may raise capital by issue of equity shares through the following ways:
1. Public issue
2. Private placement
3. Rights issue
4. Bonus issue
Issue of equity shares to the public through prospectus by a public company is called public issue. It includes initial public offer and further public offer.
Private placement means any offer of equity shares or invitation to subscribe equity shares to a select group of persons by a company (other than by way of public offer) through issue of a private placement offer letter and which satisfies the conditions specified in Section 42 of the Indian Companies Act, 2013.
Issue of equity shares to the existing shareholders of the company through a letter of offer is known as rights issue.
Issue of equity shares to the existing shareholders of the company at free of cost out of accumulated profit is known as bonus issue.