Issued Share vs. Subscribed Share Capital What’s the Difference?

If you are looking for a solid and simple explanation of issued shares and subscribed shares, you have to come to the right place. In this article, we will discuss a few of the elements that are necessary to create a better understanding of the capital market. Issued share and subscribed share are very basic elements of the stock market. By knowing about the issued share and subscribed share, you will be able to harness better knowledge on the different types of shares that are associated with the capital market. 

Let’s get into the details. 

What Is Issued Share?

In the capital market, issued shares are considered as the shares that are sold to the investors of the company. Every company has a bunch of investors. These investors can range from individuals, to large institutions, eligible investors and more. The share that is issued only for these investors is called issued share. 

Issued shares are only for the investors and they have the right over these shares. Another term that is associated with the issued shares is the issued share capital. In simple words, the used share capital is the monetary value of the shares that the company has offered to the investors to purchase. For example, a company has determined the number of issued shares to be 1,00,000 and each of the shares is valued at say 20 BDT. So, the issued capital will be 20,00,000. This amount will be considered as the issued capital for the 

Issued shares are related to the company going public. Whenever an organization is planning to go public, the interested individuals take part in purchasing the shares so that they can get hold of the issued share. 

Who Can Purchase Issued Share?

Issued share is only offered to the investors of the company. In general, in the case of a company there can be retail investors, individual investors and firms that are interested in the shares of the company. These individuals only can purchase issued shares. 

Can Issued Share Be Sold?

Yes, an investor can sell their issued shares. But this selling of the issued share has to be done in the secondary market. So the process of selling a issued share is that the company will first sell the share to the investor, then if the investors want they can sell it to other investors in the secondary market. 

Can Companies Buy Back Issued Shares?

Under normal circumstances, companies can buy back the issued shares. But these shares will be considered as issued shares. If needed, the company can resell these shares again to interested investors. 

What Is a Subscribed Share?

In simple words, subscribed share is the amount of shares the investors have promised to buy after the shares are released. In general, the subscribed shares are the part of IPO or Initial Public Offering. 

When a company is going to launch an IPO, the underwriters often promise to deliver a specific number of shares. This is done before the IPO is launched. Eligible investors, retail investors and institutions are usually the buyer of the subscribed shares. Just in case, the amount of shares purchased is less than the number that was promised by the underwriters, then the underwriters take initiative to purchase the remaining amount to get things rolling. 

What Is Subscribed Share Capital?

The total value of the shares the investors have promised to purchase after the IPO is released is considered as the subscribed share capital. The subscribed share capital is related with the IPO and it is considered as part of an IPO.  

What Is The Difference Between Issued Share and Subscribed Share?

The key difference between the issued share and subscribed share is very easy to understand. The issued share is related to the amount of shares the investors end up purchasing. It is the actual number of shares that the company can use to collect money from the capital market. On the other hand, the subscribed share is the amount that is promised to be sold in the capital market. 

In a simple explanation, it can be said that the subscribed share is the estimation of share and the issued share is the actual share that is purchased after the company has gone public. Plus, the subscribed share is correlated with the initial public offering whereas the issued share is not directly related with the IPO. 

In addition to that, the underwriters have a contribution in purchasing the subscribed share whereas they do not have any direct contribution with the issued share. So this is another difference between the issued share and subscribed share. 

These are the major differentiated factors between the subscribed share and issued share. We hope this brief write up was useful to the readers and capable of providing key takeaway. 

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