new issue

Strictly, the issue by a company of new shares, enlarging its share capital and often the number of shareholders on its register. But new issue is often used to refer to an Initial Public Offering (IPO) - the process in which a company is admitted to the Official List of the LSE (or to AIM) for the first time and issues new shares to the public as part of that exercise. New issues which are also IPOs can be handled in four ways:

• as an 'offer for sale' direct to the public at large, where the shares are offered at a predetermined price.
• as a tender offer, where the public are invited to make an offer for the new shares, and allocations are made on the basis of price.
• as a private placing to institutions, which effectively means that private investors can only get shares in the secondary market.
• as an 'Introduction' where the company is admitted without issuing any new shares.