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ATM equity offering is an alternative way of raising capital by issuing equity through existing secondary markets over a period of time.

Basically issuer gets in agreement with a sales agent (generally investment banks) to sell specified number of shares over the period of time. Issuer has the flexibility of issuing any number of shares during that time frame unlike traditional equity issuance where certain number of shares has to be issued at the time of issuance.


The flexibility of timely issuance of shares helps issuer to match its demand of capital with the supply by controlling the number of shares issued. Additionally it reduces the volatility of stock price by avoiding issuance of large number of stocks at the time of high market price of share and little or no issuance at the time when market price of shares is low.


Nitin

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Q: What is ATM common equity offering?
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