Why do companies need to issue shares to the public?

Why do companies need to issue shares to the public?

Most companies are usually started privately by their promoter(s). However,

the promoters’ capital and the borrowings from banks and financial

institutions may not be sufficient for setting up or running the business over

a long term. So companies invite the public to contribute towards the equity

and issue shares to individual investors. The way to invite share capital from

the public is through a

to the public to subscribe to the share capital of a company. Once this is

done, the company allots shares to the applicants as per the prescribed

rules and regulations laid down by SEBI.

‘Public Issue’. Simply stated, a public issue is an offer