Glossary

Hard underwriting is when an underwriter agrees to buy his commitment at its earliest stage. The underwriter guarantees a fixed amount to the issuer from the issue. Thus, in case the shares are not subscribed by investors, the issue is devolved on underwriters and they have to bring in the amount by subscribing to the shares. The underwriter bears a risk which is much higher in soft underwriting.

It is tool used to reduce the risk of future price movements.

A parent company holding maximum number of share of the company. This number should be at least 51%.

The minimum required rate of return on an investment in a discounted rate at which a project is acceptable.