Illustrate the Advantages of Underwriting
Underwriting presumes great significance as it offers the below benefits to the issuing company:
(i) Issuing company is relied from the risk of finding buyers for issue offered to the public. The company is assured of raising adequate capital
(ii) Company is assured of getting minimum subscription within the stipulated time, a statutory time, and statutory obligation to be fulfilled by issuing company.
(iii) Underwriters undertake the burden of highly specialized function of distributing securities.
(iv) Provide expect advice with regard to timing of security issue, the pricing of issue, the size and type of securities to be issued etc.
(v) Public confidence on the issue enhances when underwritten by reputed underwriter.