Factors responsible for growth of new issue market

New issue market (Primary market) is responsible for the growth of industrial progress in India. There are various factors responsible for the growth of new issue market. A few of those are given below.

1. Many of the FMCG (fast moving consumer goods — such as cosmetics) manufacturing companies could raise funds through new issue market.

2. Agro-based companies (such as sugar factories ) could raise their funds through the new issue market with the support of professional underwriters.

3. Merchant bankers are also responsible for the development of new issue market.

4. Some of the foreign financial institutions such as Morgan Stanley, Merrylynch are also instrumental for strengthening the new issue market.

5. Development banks showed a keen interest in promoting more new companies which had technically sound projects.

6. Different types of debt instruments of new companies are subscribed by investing companies in the public and private sectors which also strengthened new issue market.

7. The creation of some new Apex financial institutions such as NABARD, Exim Bank, SIDBI is another development in this regard, as they are lending a good support to new issue market.

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