(a) It refers to first time sale of securities by a company. A company while issuing the securities issues a prospectus to make a direct appeal through advertisement and informs general public about the purpose for which funds are to be raised, background and future prospectus of the company.
(b) This is the offer of new shares by a company to the existing shareholders. Each shareholder has the right to subscribe to the new shares in the proportion of shares, he already holds. The shareholder may either accept the offer for himself or assign a part or all of his rights to another. Such rights are valuable to shareholders as they are at a price below the current market price.
(c) This is the practice followed by a company to make preferential allotment of securities to selected persons, who are normally the promoters, etc. at a price unrelated to the prevailing market price. The advantage is that funds are obtained at a minimal cost as compared to the public issue of the private placement method.
