who are underwriters? what is their work?
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Answer Posted / chaitanya
A company or other entity that administers the public
issuance and distribution of securities from a corporation
or other issuing body. An underwriter works closely with
the issuing body to determine the offering price of the
securities, buys them from the issuer and sells them to
investors via the underwriter's distribution network.
(Or)
Underwriters generally receive underwriting fees from their
issuing clients, but they also usually earn profits when
selling the underwritten shares to investors. However,
underwriters assume the responsibility of distributing a
securities issue to the public. If they can't sell all of
the securities at the specified offering price, they may be
forced to sell the securities for less than they paid for
them, or retain the securities themselves.
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