Top 5 Reasons why companies Raise Fund?
When companies raise funds through shares, is it good for investment? When companies raise funds through issuing shares, it's called a share issuance or equity offering. Whether it's a good investment opportunity depends on several factors, both about the company and the broader market conditions. Here's a breakdown of key considerations: Purpose of Fundraising Growth and Expansion : If a company raises funds to expand operations, invest in new projects, or enter new markets, it could be a sign of growth potential. A solid business plan for how the funds will be used could increase the likelihood of future profits, investing appealing. Debt Repayment: If the funds are being used to pay down debt, it might be a sign that the company is financially struggling or trying to reduce leverage. This might not be as attractive if it signals financial distress. Research and Development: For tech companies or companies in innovation-heavy sectors, raising funds for R&D can lead ...