The following is not a method of floating new issues in the primary market:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Through direct mail or post
Option (1) Through direct mail or post — Not a method of floating new issues (Correct). The methods of floating new issues in the primary market are offer through prospectus, offer for sale, private placement, rights issue and e-IPOs. Sending offers by post is not one of them.
Option (2) Rights issue — A method of floating new issues (Incorrect). Existing shareholders get the ‘right’ to buy new shares in proportion to the shares they already hold.
Option (3) Offer for sale — A method of floating new issues (Incorrect). The company sells the securities in one lot, at an agreed price, to brokers or issuing houses. They resell them to the investing public.
Option (4) E-IPO's — A method of floating new issues (Incorrect). The company issues its capital to the public through the online system of the stock exchange, after an agreement with the exchange.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. The new NCERT dropped this chapter, but NTA kept it on the menu.
NCERT (Pre-rationalised Edition):
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