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INDIAN SCHOOL AL WADI AL KABIR
DEPARTMENT OF COMMERCE
Entrepreneurship-XII
Resource mobilization
1 It proposed to the existing shareholders and in case they are not willing to subscribe, they
can renounce the same in favour of another person. This method of issuing securities is
considered to be inexpensive as it does not require any brokers, agents, underwriters,
prospectus or enlistment, etc. Name the source of finance.
2. Ganga Dhar was working as the production manager in a German company. The company
was producing remote operated high-end kitchen equipment. He resigned from his job and
returned to Patna, his hometown. In Patna he met Aditya, his old friend, who had been
managing his factory producing steel utensils with old technology. Ganga Dhar encouraged
Aditya for the production of high-end kitchen equipment. He also promised to help Aditya by
providing funds and his expertise so that the production unit run by Aditya can develop into a
big production house and its investors may get high return on investments. Identify the kind
of ‘source of capital’ provided by Ganga Dhar to Aditya and explain the same.
3. Ram Prasad, a cotton grower from Bihar, wants to start a cottage industry for weaving
cotton into handloom. Which specialized financial institution should he approach to meet the
credit requirements of his industry?
4. ‘Public issue is the most popular method of raising capital by an entrepreneur’. Explain the
method and any five advantages of using this method of raising finance.
5. Mr. Raghav retired as CEO of a well reputed IT company after having worked for 40 years
in USA. He returned to India with a desire to encourage entrepreneurial ventures in IT sector.
He was approached by Nitin, a budding entrepreneur in IT sector whose venture was in a
start-up stage and was falling short of funds. Apart from investing funds, Mr. Raghav also
provided proactive advice, guidance and industry connection and thus, simultaneously
helping them in raising high returns on investment. Identify and explain the source of raising
finance used by Nitin.
6. It may be defined as an organized mechanism meant for effective and smooth transfer of
money capital or financial resources from the investors to the entrepreneurs. Here, productive
capital is raised and made available for industrial purposes.
a) Identify the concept of resource mobilization.
b) What are the different types of market under the identified market? Explain.
7. It means anybody of individuals, whether incorporated or not, constituted for the purpose
of assisting, regulating or controlling the business of buying and selling or dealing in
securities."
a) Explain its features of the above mentioned concept.
b) Explain the functions of the above identified concept.
8. Stock exchange indicates about the good or bad health of an economy. It is an investment
intermediary which facilities economic and industrial development of a country.
For the smooth and orderly functioning of corporate sector in a free market economy, stock
exchange are indispensable, because of the different roles played by them for different
groups. Explain.
9. What are the draw backs of raising finance through public issue?
10. What are the powers of SEBI?
11. When to seek venture capital finance?
12. It is wholly owned subsidiary of the Reserve Bank of India. The purpose was to enable
the new institution to benefit from the financial support and experience of RBI.one of the
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objective is to Co-ordination, regulation and supervision of the working of other financial
institutions such as IFCI, ICICI, UTI, LIC, Commercial Banks and SFCs.
a) Identify the financial institution.
b) What are its functions?
13. It is the principal financial institution for promotion, financing and development of smallscale industries in India.
a) Identify the financial institution.
b) State its functions?
14. Its main objects is to provide medium and long term credit to eligible industrial
enterprises in corporate sectors of the economy, particularly to those industries to which
banking facilities are not available. Identify the institution. List the objectives of the above
given details of the institution.
15. Explain the regulatory functions of NABARD.
16. It was born as a result of the Government of India's decision, in 1987, to promote a
separate all-India financial institution for providing financial assistance to tourism-related
activities/projects. It was incorporated as a public limited company under the Companies Act,
1956 on 27 January, 1989 and became operational with effect from 1 February, 1989. It is a
specialized all-India development financial institution to cater to the needs to the needs of the
tourism industry.
a) Identify the financial institution.
b) Explain its functions.
17. Entrepreneurs, herein, raise funds by selling the issues mainly to the institutional
investors like:
i) Unit Trust of India
ii) Life Insurance Corporation of India
iii) General Insurance Corporation of India etc..
Identify the source of finance.
18. Stock options or offering shares to the employees has gained much popularity in many
countries of the world. This method enables employees to become shareholders and share the
profits of the company.
a) Identify the source of finance for the company.
b) What are the benefits that the company enjoys if it uses this option of raising finance?
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