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Transcript of LAW UNIT IV--
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UNIT IVUNIT IV
ISSUE OF SHARESISSUE OF SHARES
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SHARESSHARES
Provisions of the Companies ActProvisions of the Companies ActRegistration & Issue of prospectusRegistration & Issue of prospectus
Minimum SubscriptionMinimum SubscriptionApplication moneyApplication money
Money to be deposited in a scheduled bankMoney to be deposited in a scheduled bank
Opening of subscription listOpening of subscription list
Statement in lieu of prospectus to be delivered to theStatement in lieu of prospectus to be delivered to theregistrarregistrar
Compulsory listing of all public issuesCompulsory listing of all public issues
Initial offer of securities to be in theInitial offer of securities to be in the dematdemat form inform in
certain casescertain cases
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SHARESSHARES
Registration & Issue of prospectusRegistration & Issue of prospectusWhereWhere aa publicpublic companycompany offersoffers sharesshares &&
debenturesdebentures toto thethe publicpublic ,, aa copycopy ofofprospectusprospectus mustmust bebe dulyduly filedfiled withwith thetheregistrarregistrar
RegistrationRegistration mustmust bebe mademade onon oror beforebefore
thethe datedate ofof publicationpublication ofof thethe prospectusprospectusTheThe prospectusprospectus mustmust bebe issuedissued withinwithin 9090daysdays ofof itsits registrationregistration
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SHARESSHARES
Minimum SubscriptionMinimum SubscriptionSecSec..6969((11)) NoNo allotmentallotment shallshall bebe mademade unlessunlessthethe amountamount statedstated inin thethe prospectusprospectus asasminimumminimum subscriptionsubscription hashas beenbeen subscribedsubscribedandand thethe sumsum payablepayable hashas beenbeen receivedreceived
IfIf thethe minimumminimum subscriptionsubscription isis notnot raisedraisedwithinwithin 120120 daysdays ofof thethe issueissue ofof thethe
prospectusprospectus ,, allall thethe moneymoney receivedreceived shallshall beberepaidrepaid withinwithin 130130 daysdays afterafter thethe issueissue ofofthethe prospectusprospectus otherwiseotherwise thethe directorsdirectors ofofthethe companycompany willwill havehave toto repayrepay thethe amountamount
withwith interestinterest @@ 66%% pp..aa
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SHARESSHARES
MinimumMinimum SubscriptionSubscriptionAsAs perper SEBISEBI guidelinesguidelines aa companycompany mustmust
receivereceive aa minimumminimum ofof 9090%% subscriptionsubscriptionagainstagainst thethe entireentire issueissue
IfIf thethe companycompany doesdoes notnot receivereceive minimumminimumsubscriptionsubscription withinwithin 6060 daysdays ofof thethe closureclosure
ofof thethe issue,issue, thethe companycompany shallshall refundrefund thetheentireentire amountamount
AnyAny delaydelay beyondbeyond 88 daysdays willwill makemake thethecompanycompany liableliable toto paypay interestinterest @@ 1515%% pp..aa
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SHARESSHARES
Application moneyApplication moneyThe amount payable on application on each shareThe amount payable on application on each shareshall not be less than 5% of the nominal amount ofshall not be less than 5% of the nominal amount ofthe sharethe share
Money to be deposited in a scheduled bankMoney to be deposited in a scheduled bankAll the money received on application must beAll the money received on application must bedeposited in a scheduled bank tilldeposited in a scheduled bank till
The certificate to commence business is obtained orThe certificate to commence business is obtained or
The entire amount payable on application is received byThe entire amount payable on application is received bythe company in respect to minimum subscriptionthe company in respect to minimum subscription
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SHARESSHARES
OpeningOpening ofof subscriptionsubscription listlistNoNo allotmentallotment cancan bebe mademade untiluntil thethe beginningbeginning ofof thethe
55thth dayday afterafter thethe publicationpublication ofof thethe prospectusprospectus oror
SomeSome otherother timetime asas maymay bebe prescribedprescribed inin thetheprospectusprospectus
TheThe companycompany maymay keepkeep thethe subscriptionsubscription listlist openopen forfor
anyany lengthlength ofof timetime
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SHARESSHARES
Statement in lieu of a prospectus to beStatement in lieu of a prospectus to bedelivered to the registrardelivered to the registrar
A company with a share capital which has not issuedA company with a share capital which has not issueda prospectus, shall not allot any of its shares ora prospectus, shall not allot any of its shares or
debentures unless a statement in lieu of prospectusdebentures unless a statement in lieu of prospectushas been filed with the Registrar at least 3 dayshas been filed with the Registrar at least 3 daysbefore the first allotmentbefore the first allotment
This is not applicable to a private companyThis is not applicable to a private company
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SHARESSHARES
CompulsoryCompulsory listinglisting ofof allall publicpublic issuesissuesSecSec.. 7373 providesprovides thatthat everyevery companycompany intendingintending toto offeroffer
sharesshares oror debenturesdebentures toto publicpublic byby thethe issueissue ofof aaprospectusprospectus hashas toto makemake anan applicationapplication toto oneone oror moremore ofof
thethe recognisedrecognised stockstock exchangesexchanges forfor permissionpermission forfor thethesharesshares oror debenturesdebentures toto bebe dealtdealt withinwithin thethe stockstockexchangeexchange
TheThe prospectusprospectus mustmust specifyspecify thethe namename ofof thethe stockstockexchangeexchange
AnyAny allotmentallotment mademade inin pursuancepursuance ofof suchsuch aa prospectusprospectusshallshall bebe voidvoid ifif anyany suchsuch stockstock exchangeexchange doesdoes notnot grantgrantpermissionpermission withinwithin 1010 weeksweeks fromfrom thethe closingclosing ofof suchsuch aasubscriptionsubscription
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GENERAL PROVISIONSGENERAL PROVISIONS
(Allotment of shares)(Allotment of shares)AllotmentAllotment mustmust bebe inin accordanceaccordance withwith thetheprovisionsprovisions ofof thethe ArticlesArticles
AllotmentAllotment mustmust bebe communicatedcommunicated
AllotmentAllotment mustmust bebe mademade withinwithin reasonablereasonabletimetime
AllotmentAllotment mustmust bebe absoluteabsolute && unconditionalunconditional
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ISSUE OF SHARES AT PARISSUE OF SHARES AT PAR
SEBI GUIDELINES for par value of sharesSEBI GUIDELINES for par value of shares
At any point of time the par shall beAt any point of time the par shall be 1 or1 or
multiples of 1multiples of 1
All the shares should be of the same parAll the shares should be of the same par
valuevalue
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ISSUE OF SHARES AT A DISCOUNTISSUE OF SHARES AT A DISCOUNT
(SEC.79)(SEC.79)
TheThe issueissue ofof sharesshares atat aa discountdiscount mustmust bebeofof aa classclass ofof sharesshares alreadyalready issuedissued
AtAt leastleast oneone yearyear shouldshould havehave elapsedelapsed atatthethe datedate ofof issueissue fromfrom thethe datedate ofofcommencementcommencement ofof businessbusiness byby thethe companycompany
TheThe issueissue isis authorizedauthorized byby aa resolutionresolution ininthethe GM,GM, whichwhich mustmust statestate thethe maximummaximumraterate ofof discountdiscount
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ISSUE OF SHARES AT A DISCOUNTISSUE OF SHARES AT A DISCOUNT
(SEC.79)(SEC.79)
ItIt isis sanctionedsanctioned byby thethe NCLTNCLT
SharesShares areare issuedissued withinwithin 22 monthsmonths ofof thethedatedate onon whichwhich thethe issueissue isis sanctionedsanctioned bybythethe NCLTNCLT oror withinwithin suchsuch extendedextended timetime asasthethe NCLTNCLT maymay allowallow
TheThe raterate ofof discountdiscount mustmust notnot exceedexceed1010%%,, exceptexcept withwith thethe approvalapproval ofof thetheNCLTNCLT
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ISSUE OF SHARES AT A PREMIUMISSUE OF SHARES AT A PREMIUM
(SEC.78)(SEC.78)
IssueIssue ofof sharesshares atat aa priceprice higherhigher thanthan thethefaceface valuevalue
TotalTotal premiumpremium amountamount isis transferredtransferred totoSecuritiesSecurities PremiumPremium AccountAccount
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ISSUE OF SHARES AT A PREMIUMISSUE OF SHARES AT A PREMIUM
(SEC.78)(SEC.78)
TheThe securitiessecurities premiumpremium maymay bebe utilizedutilizedforfor thethe followingfollowing purposespurposes ::
ToTo issueissue fullyfully paidpaid bonusbonus sharesshares toto membersmembers
ToTo writewrite offoff preliminarypreliminary expensesexpenses
ToTo writewrite offoff expensesexpenses oror commissionscommissions paidpaid oror
discountsdiscounts allowedallowed onon anan issueissue ofof sharesshares orordebenturesdebentures
ToTo provideprovide forfor thethe premiumpremium payablepayable ononredemptionredemption ofof anyany redeemableredeemable preferencepreference
sharesshares oror debenturesdebentures
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ISSUE OF SHARES AT A PREMIUMISSUE OF SHARES AT A PREMIUM
(SEC.78)(SEC.78)
TheThe securitiessecurities premiumpremium maymay bebe utilizedutilizedforfor thethe followingfollowing purposespurposes ::
ForFor buybuy backback ofof ownown securitiessecurities (( 7777--AA ))
EvenEven whenwhen thethe securitiessecurities areare issuedissued atat aa
premiumpremium forfor considerationconsideration otherother thanthancash,cash, aa sumsum equalequal toto thethe amountamount ofofpremiumpremium mustmust bebe transferredtransferred toto thethe
securitiessecurities premiumpremium accountaccount
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CALLS ON SHARESCALLS ON SHARES
AA callcall maymay bebe defineddefined asas aa demanddemand byby thethecompany,company, inin pursuancepursuance ofof aa resolutionresolution ofofthethe BODBOD && inin accordanceaccordance withwith thetheregulationsregulations ofof thethe articlesarticles uponupon itsitsshareholders,shareholders, toto paypay thethe wholewhole oror partpart ofof
thethe balancebalance remainingremaining unpaidunpaid onon theirtheirsharesshares duringduring thethe lifetimelifetime ofof thethecompanycompany..
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CALLS ON SHARESCALLS ON SHARES
RequisitesRequisites ofof aa ValidValid callcallResolutionResolution ofof thethe BODBOD
TheThe amountamount && timetime ofof paymentpayment
CallsCalls onon sharesshares ofof thethe samesame classclass toto bebe mademadeonon aa uniformuniform basisbasis
BonaBona fidefide && forfor thethe benefitbenefit ofof thethe companycompany
InIn accordanceaccordance withwith thethe provisionsprovisions ofof thethearticlesarticles ofof thethe companycompany (Regulations(Regulations 1313--1818ofof TableTable A)A)
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FORFEITURE OF SHARESFORFEITURE OF SHARES
CompulsoryCompulsory terminationtermination ofof membershipmembership &&takingtaking awayaway thethe sharesshares fromfrom aa membermember bybywayway ofof penaltypenalty forfor nonnon--paymentpayment ofof anyany
call,call, installmentinstallment oror premiumpremium onon sharesshares
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FORFEITURE OF SHARESFORFEITURE OF SHARES
EssentialsEssentials ofof ValidValid ForfeitureForfeiture::ForfeitureForfeiture forfor nonnon--paymentpayment ofof callscalls
NoticeNotice precedentprecedent toto forfeitureforfeiture
ResolutionResolution ofof forfeitureforfeitureBonaBona fidefide
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FORFEITURE OF SHARESFORFEITURE OF SHARES
EffectEffect ofof ForfeitureForfeiture::DefaultingDefaulting shareholdershareholder ceasesceases toto bebe aa membermemberofof thethe companycompany
HeHe alsoalso losesloses thethe moneymoney paidpaid byby himhim
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FORFEITURE OF SHARESFORFEITURE OF SHARES
ReissueReissue ofof ForfeitedForfeited SharesShares::AA forfeitedforfeited shareshare maymay bebe soldsold oror otherwiseotherwisedisposeddisposed ofof onon suchsuch termsterms asas thethe boardboard thinksthinks
fitfitNoNo returnreturn ofof allotmentallotment isis requiredrequired toto bebe filedfiledforfor thethe reissuereissue ofof forfeitedforfeited sharesshares
TheThe titletitle ofof thethe purchaserpurchaser ofof forfeitedforfeitedsharesshares willwill notnot bebe affectedaffected byby anyany irregularityirregularityinin proceedingsproceedings withwith referencereference toto thetheforfeitureforfeiture oror salesale ofof thethe sharesshares
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FORFEITURE OF SHARESFORFEITURE OF SHARES
AnnulmentAnnulment ofof ForfeitureForfeiture
AtAt anyany timetime beforebefore thethe salesale ofof forfeitedforfeited
shares,shares, thethe boardboard maymay cancelcancel thethe forfeitureforfeitureonon suchsuch termsterms asas itit thinksthinks fitfit
ThisThis powerpower cannotcannot bebe exercisedexercised withoutwithout thetheconsentconsent ofof thethe forfeitingforfeiting membermember
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SURRENDER OF SHARESSURRENDER OF SHARES
WhenWhen aa shareholdershareholder abandonsabandons hishis sharessharesinin favourfavour ofof thethe companycompany itit isis knownknown asassurrendersurrender ofof sharesshares
ArticlesArticles maymay provideprovide forfor thethe acceptanceacceptanceofof aa surrendersurrender ofof sharesshares underundercircumstancescircumstances whichwhich wouldwould justifyjustify
forfeitureforfeiture
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SURRENDER OF SHARESSURRENDER OF SHARES
DirectorsDirectors powerspowers toto acceptaccept surrendersurrender ofofsharesshares
AA validvalid callcall && defaultdefault mustmust existexist
SurrenderSurrender shouldshould notnot bebe usedused asas aa devicedevice totorelieverelieve anyany membermember fromfrom hishis liabilityliability
SurrenderSurrender ofof sharesshares isis ultraultra viresviresifif thethesharesshares areare notnot liableliable toto forfeitureforfeiture
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SURRENDER OF SHARESSURRENDER OF SHARES
EffectEffectMemberMember ceasesceases toto bebe thethe membermember ofof thethe companycompany
HeHe remainsremains liableliable asas aa contributorycontributory asas aa pastpastmembermember ofof thethe company,company, ifif thethe companycompany isis woundwoundupup withinwithin 1212 monthsmonths ofof hishis surrenderingsurrendering ofof sharesshares
PartlyPartly paidpaid upup sharesshares whichwhich areare surrenderedsurrendered cancanbebe reissuedreissued inin thethe samesame mannermanner asas forfeitedforfeitedsharesshares
WhereWhere thethe surrendersurrender ofof sharesshares isis illegal,illegal, thetheshareholdershareholder isis justifiedjustified inin applyingapplying toto havehave thetheregisterregister ofof membersmembers rectifiedrectified byby placingplacing hishis namenamethereonthereon
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TRANSFER OF SHARESTRANSFER OF SHARES
SectionSection 8282 providesprovides thatthat thethe sharesshares ofofthethe membermember inin aa companycompany shallshall bebe aamovablemovable property,property, transferabletransferable inin thethe
mannermanner providedprovided byby thethe ArticlesArticles ofof thethecompanycompany
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TRANSFER OF SHARESTRANSFER OF SHARES
PROCEDUREPROCEDUREInstrumentInstrument ofof transfertransfer toto bebe delivereddelivered toto thethecompanycompany
InstrumentInstrument ofof transfertransfer toto bebe inin thetheprescribedprescribed formform
TransferTransfer byby legallegal representativerepresentative
NoticeNotice toto transfereetransferee
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TRANSMISSION OF SHARESTRANSMISSION OF SHARES
WhenWhen sharesshares passpass byby operationoperation ofof lawlawfromfrom oneone personperson toto another,another, itit isis knownknown asastransmissiontransmission ofof sharesshares
ThisThis happenshappens whenwhen aa membermember dies,dies,becomesbecomes insolventinsolvent oror goesgoes insaneinsane
InIn allall suchsuch casescases thethe legallegal representativerepresentativeoror thethe OfficialOfficial AssigneeAssignee oror ReceiverReceiver ororAdministratorAdministrator appointedappointed byby thethe court,court,
shallshall bebe entitledentitled toto thethe sharesshares
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TRANSMISSION OF SHARESTRANSMISSION OF SHARES
RegulationRegulation 2525--2828 ofof TableTable AAOnOn thethe deathdeath ofof aa member,member, thethe survivor,survivor,wherewhere thethe membermember waswas aa jointjoint holder,holder, shallshallbebe thethe onlyonly personperson recognizedrecognized byby thethe companycompany
asas havinghaving anyany titletitle toto hishis interestinterest inin sharessharesAA personperson becomingbecoming entitledentitled toto aa shareshare onon aadeathdeath oror insolvencyinsolvency ofof aa member,member, ononproductionproduction ofof aa satisfactorysatisfactory proofproof asas toto hishis
title,title, maymay electelect eithereitherToTo registerregister himselfhimself asas thethe holderholder ofof sharesshares oror
ToTo transfertransfer thethe sharesshares asas thethe originaloriginal membermembercouldcould havehave donedone
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TRANSMISSION OF SHARESTRANSMISSION OF SHARES
RegulationRegulation 2525--2828 ofof TableTable AAIfIf aa personperson concernedconcerned electselects toto becomebecome aamember,member, hehe shallshall sendsend aa writtenwritten && signedsignednoticenotice toto thethe companycompany notifyingnotifying hishis electionelection..
IfIf hehe electselects toto transfer,transfer, hehe shallshall notifynotify thetheelectionelection byby executingexecuting aa transfertransfer
AA personperson becomingbecoming entitledentitled toto aa shareshare onontransmissiontransmission shallshall havehave thethe samesame rightright asas toto
dividenddividend && otherother advantagesadvantages && privileges,privileges, asasifif hehe werewere thethe originaloriginal holderholder exceptexcept
BeforeBefore registrationregistration asas aa member,member, hehe shallshall notnotexerciseexercise anyany rightright asas membermember atat thethe meetingmeeting ofof
thethe companycompany
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METHODS OF RAISING SHAREMETHODS OF RAISING SHARE
CAPITALCAPITAL
METHODS
IPO
PrivatePlacementof Shares
PreferentialAllotment
FPO
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ISSUES
PUBLICISSUE
BONUSISSUE
RIGHTISSUE
PRIVATEPLACEMENT
IPO FPO
PREFERENTIALALLOTMENT
QUALIFIEDINSTITUTIONALPLACEMENTFRESH
ISSUE
OFFER
FOR SALE
FRESHISSUE
OFFER
FOR SALE
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INITIAL PUBLIC OFFERINGINITIAL PUBLIC OFFERING
RefersRefers toto thethe sellingselling ofofsharesshares byby aa privateprivatecompanycompany toto thethe publicpublic forfor thethe firstfirst timetime..
InitialInitial PublicPublic OfferingOffering isis aa sourcesource ofof fundsfundsraisedraised fromfrom thethe primaryprimary marketmarket..
AllAll subsequentsubsequent publicpublic offeringsofferings areare knownknown asas
FollowFollow--onon PublicPublic OfferingsOfferings oror SecondarySecondaryMarketMarket OfferingsOfferings..
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IPOIPO
Initial public offer (IPO):Initial public offer (IPO): When an unlistedWhen an unlistedcompany makes either a fresh issue of securitiescompany makes either a fresh issue of securities
or offers its existing securities for sale or bothor offers its existing securities for sale or both
for the first time to the public, it is called anfor the first time to the public, it is called an
IPO. This paves way for listing and trading ofIPO. This paves way for listing and trading ofthe issuers securities in the Stock Exchangesthe issuers securities in the Stock Exchanges
F
urtherF
urther publicpublic offeroffer (F
PO)(F
PO) ororF
ollowF
ollow onon offeroffer::WhenWhen anan alreadyalready listedlisted companycompany makesmakes eithereither aa
freshfresh issueissue ofof securitiessecurities toto thethe publicpublic oror anan offeroffer
forfor salesale toto thethe publicpublic ,, itit isis calledcalled aa FPOFPO..
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ISSUEISSUE
RightsRights issueissue (RI)(RI):: WhenWhen anan issueissue ofof securitiessecurities isismademade byby anan issuerissuer toto itsits shareholdersshareholders existingexisting asas
onon aa particularparticular datedate fixedfixed byby thethe issuerissuer (i(i..ee..
recordrecord date),date), itit isis calledcalled asas rightsrights issueissue.. TheThe
rightsrights areare offeredoffered inin aa particularparticular ratioratio toto thethenumbernumber ofof securitiessecurities heldheld asas onon thethe recordrecord datedate..
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ISSUEISSUE
BonusBonus issueissue:: WhenWhen anan issuerissuer makesmakes anan issueissueofof securitiessecurities toto itsits existingexisting shareholdersshareholders asas onon aa
recordrecord date,date, withoutwithout anyany considerationconsideration fromfrom
them,them, itit isis calledcalled aa bonusbonus issueissue.. TheThe sharesshares areare
issuedissued outout ofof thethe CompanysCompanys freefree reservereserve ororshareshare premiumpremium accountaccount inin aa particularparticular ratioratio toto
thethe numbernumber ofof securitiessecurities heldheld onon aa recordrecord datedate..
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ISSUEISSUE
PrivatePrivate placementplacement:: WhenWhen anan issuerissuer makesmakes anan
issueissue ofof securitiessecurities toto aa selectedselected groupgroup ofof
personspersons notnot exceedingexceeding 4949,, andand whichwhich isis neitherneither
aa rightsrights issueissue nornor aa publicpublic issue,issue, itit isis calledcalled aaprivateprivate placementplacement.. PrivatePrivate placementplacement ofof sharesshares
oror convertibleconvertible securitiessecurities byby listedlisted issuerissuer cancan bebe
ofof twotwo typestypes::
(i)(i) PreferentialPreferential allotmentallotment
(ii)(ii) QualifiedQualified InstitutionalInstitutional PlacementsPlacements
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ISSUEISSUE
((ii)) PreferentialPreferential allotmentallotment:: WhenWhen aa listedlisted issuerissuer
issuesissues sharesshares oror convertibleconvertible securities,securities, toto aa
selectselect groupgroup ofof personspersons inin termsterms ofof provisionsprovisions ofofSEBISEBI (DIP)guidelines,(DIP)guidelines, itit isis calledcalled aa preferentialpreferential
allotmentallotment.. TheThe issuerissuer isis requiredrequired toto complycomply withwith
variousvarious provisionsprovisions whichwhich interinteraliaalia includeinclude
pricing,pricing, disclosuresdisclosures inin thethe notice,notice, locklock
inin etc,etc, ininadditionaddition toto thethe requirementsrequirements specifiedspecified inin thethe
CompaniesCompanies ActAct..
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ISSUEISSUE
(ii)(ii) QualifiedQualified institutionsinstitutions placementplacement (QIP)(QIP)::WhenWhen aa listedlisted issuerissuer issuesissues equityequity sharesshares oror
securitiessecurities convertibleconvertible inin toto equityequity sharesshares toto
QualifiedQualified InstitutionsInstitutions BuyersBuyers onlyonly inin termsterms ofofprovisionsprovisions ofof SEBISEBI (DIP)(DIP) guidelines,guidelines, itit isis calledcalled aa
QIPQIP..
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ADVANTAGES OF PUBLIC ISSUEADVANTAGES OF PUBLIC ISSUE
MoneyMoney nonnon--refundablerefundable exceptexcept inin thethe casecase ofofwindingwinding upup oror buybuy backback ofof sharesshares
NoNo financialfinancial burdenburden ii..ee.. nono fixedfixed raterate ofof interestinterestpayablepayable.. However,However, inin orderorder toto serviceservice thethe equity,equity,dividenddividend maymay bebe paidpaid..
EnhancesEnhances shareholder'sshareholder's valuevalue ifif thethe companycompanyperformsperforms wellwell
GreaterGreater TransferabilityTransferability
TradingTrading && ListingListing ofof securitiessecurities atat stockstock
exchangesexchanges BetterBetter LiquidityLiquidity ofof securitiessecurities
HelpsHelps buildingbuilding reputationreputation ofof promoters,promoters,companycompany && itsits productsproducts // services,services, providedprovided thethe
companycompany performsperforms wellwell
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Applicable LawsApplicable Laws
AA companycompany isis requiredrequired toto complycomply withwith thethefollowingfollowing lawslaws inin connectionconnection withwith aa publicpublic issueissue ::--
ProvisionsProvisions ofof CompaniesCompanies Act,Act, 19561956
SecuritiesSecurities ContractsContracts (Regulations)(Regulations) Act,Act, 19561956
SEBISEBI rulesrules && regulationsregulations
ComplianceCompliance ofof ListingListing AgreementAgreement withwith thetheconcernedconcerned stockstock exchangesexchanges afterafter thethe listinglisting ofof
securitiessecurities.. RBIRBI regulationsregulations inin casecase ofof foreign/NRIforeign/NRI equityequity
participationparticipation..
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Agencies involved in a PublicAgencies involved in a Public
IssueIssue Management of a Public Issue involves the participation of.
Managers to the Issue
Underwriters
Brokers Registrars to the issue
Solicitors
Printers
Publicity and advertising agents
Auditors Compliance officer
Depositories
Statutory agencies (ROC,SEBI,RBI AND STOCKEXCHANGES)
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Documents requiredDocuments required
Offer document
Draft Offer document
Red Herring Prospectus
Abridged Prospectus
Letter of offer
Placement Document
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Offer DocumentOffer Document
Offer document is a document which contains allthe relevant information about the company,promoters, projects, financial details, objects of
raising the money, terms of the issue etc and is usedfor inviting subscription to the issue being made bythe issuer.
Offer Document is called Prospectus in case of apublic issue or offer for sale andLetter of Offer in case of a rights issue.
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Draft Offer DocumentDraft Offer Document
Draft offer document is an offer document filed withSEBI for specifying changes, if any, in it, before it isfiled with the Registrar of companies (ROCs).
Draft offer document is made available in publicdomain including SEBI website, for enabling public togive comments, if any, on the draft offer document.
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Red Herring ProspectusRed Herring Prospectus
Red herring prospectus is an offer document used in
case of a book built public issue. It contains all the
relevant details except that of price or number of sharesbeing offered. It is filed with ROC before the issue opens.
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Abridged ProspectusAbridged Prospectus
Abridged prospectus is an abridged version of offer
document in public issue and is issued along with the
application form of a public issue. It contains all thesalient features of a prospectus.
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Placement DocumentPlacement Document
Placement document is an offer document for the
purpose of Qualified Institutional Placement and contains
all the relevant and material disclosures.
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Price of an issuePrice of an issue
SEBIdoes not play any role in price fixation.
There are two types of issues :
One, where company and LM fix a price (calledfixed price)and
Other, where the company and LM stipulate afloor price or aprice bandand leave it to
market forces to determine the final price(price discovery throughbook building process).
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Book BuildingBook Building
ItIt isis aa processprocess ofofpriceprice discoverydiscovery..
TheThe redred herringherring prospectusprospectus doesdoes notnot containcontain aapriceprice..
ItIt containscontains eithereither thethe floorfloor priceprice ofof thethe securitiessecuritiesofferedoffered throughthrough itit oror aa priceprice bandband alongalong withwith thetherangerange withinwithin whichwhich thethe bidsbids cancan movemove..
PricePrice bandband ---- TheThe spreadspread betweenbetween thethe floorfloor andand thethecapcap ofof thethe priceprice bandband shallshall notnot bebe moremore thanthan 2020%%..
InIn otherother words,words, itit meansmeans thatthat thethe capcap shouldshould notnotbebe moremore thanthan 120120%% ofof thethe floorfloor priceprice..
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Vetting by SEBI/StockVetting by SEBI/Stock
ExchangesExchanges
AA companycompany cannotcannot comecome outout withwith publicpublic issueissueunlessunlessdraftdraft prospectusprospectus isis filedfiled withwith SEBISEBI..
AA companycompany cannotcannot filefile prospectusprospectus directlydirectly
withwith SEBISEBI.. ItIt hashas toto bebe filedfiled throughthrough aamerchantmerchant bankerbanker..
SEBISEBI onon receivingreceiving thethe same,same, scrutinizesscrutinizes ititandand maymay suggestsuggest changeschanges withinwithin 2121 daysdays ofofreceiptreceipt ofof prospectusprospectus..
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Vetting by SEBI/StockVetting by SEBI/Stock
ExchangesExchanges IfIf thethe issueissue sizesize isis uptoupto RsRs.. 2020 crorescrores thenthen thethe
merchantmerchant bankersbankers areare requiredrequired toto filefile prospectusprospectuswithwith thethe regionalregional officeoffice ofof SEBISEBI
IfIf thethe issueissue sizesize isis moremore thanthan RsRs.. 2020 crorescrores,,merchantmerchant bankersbankers areare requiredrequired toto filefile prospectusprospectusatat SEBI,SEBI, MumbaiMumbai officeoffice..
ProspectusProspectus isis alsoalso requiredrequired toto bebe filedfiled withwith thetheconcernedconcerned stockstock exchangesexchanges alongalong withwith thethe
applicationapplication forfor listinglisting itsits securitiessecurities..
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Classes of InvestorsClasses of Investors
AccordingAccording toto thethe bookbook buildingbuilding process,process, threethreeclassesclasses ofof investorsinvestors cancan bidbid forfor thethe sharesshares::
QualifiedQualified InstitutionalInstitutional BuyersBuyers:: QIBsQIBs includeinclude
mutualmutual fundsfunds andand ForeignForeign InstitutionalInstitutional InvestorsInvestors..AtAt leastleast 5050%% ofof thethe sharesshares areare reservedreserved forfor thisthiscategorycategory..
RetailRetail investorsinvestors:: AnyoneAnyone whowho bidsbids forfor sharesshares
uptoupto RsRs 11,,0000,,000000 isis aa retailretail investorinvestor.. AtAt leastleast3535%% isis reservedreserved forfor thisthis categorycategory..
TheThe balancebalance bidsbids areare offeredoffered toto highhigh netnet worthworthindividualsindividuals andand employeesemployees ofof thethe companycompany..
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Procedure for the PublicIssueProcedure for the PublicIssue
PrePre--IssueIssue ObligationsObligations (i(i..ee.. beforebefore thethe openingopening ofof issue)issue) BoardBoard ResolutionResolution forfor approvingapproving thethe draftdraft
prospectusprospectus andand relatedrelated resolutionsresolutions
FilingFiling ofof formform 2323 withwith ROCROC forfor passingpassing specialspecialresolutionresolution forfor issuingissuing sharesshares asas aboveabove..
AppointmentAppointment ofof intermediariesintermediaries andand enteringentering intointoMOUMOU withwith themthem
DueDue diligencediligence byby aa merchantmerchant bankerbanker
SubmissionSubmission ofof allall requiredrequired papers/documentspapers/documents withwith
merchantmerchant bankersbankers..
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Procedure for the PublicIssueProcedure for the PublicIssue
PreparationPreparation ofof draftdraft prospectusprospectus inin
consultationconsultation withwith thethe merchantmerchant bankerbanker andand
submittingsubmitting thethe samesame withwithSEBISEBIalongalong withwith
thethe feesfees && otherother requirementsrequirements andandsubmittingsubmitting thethe samesame withwith stockstock exchangesexchanges
asas perper guidelinesguidelines..
ReceiptReceipt ofof queriesqueries fromfromSEBISEBI // stockstock
exchanges,exchanges, ifif anyany andand makemake changeschanges inin
prospectus,prospectus, ifif requiredrequired..
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Procedure for the PublicIssueProcedure for the PublicIssue
ReplyReply toto SEBISEBI /stock/stock exchangesexchanges ininconnectionconnection withwith changeschanges inin prospectusprospectus..
ObtainingObtaining inin--principleprinciple approvalapproval fromfrom stockstockexchangesexchanges
FileFile finalfinal prospectusprospectus withwithSEBISEBI // stockstockexchangesexchanges // ROCROC
StatutoryStatutory AdvertisementsAdvertisements
SubmissionSubmission ofof 11%%SecuritySecurity DepositDeposit withwith thethe
RegionalRegionalStockStockExchangeExchange.. DepositingDepositing Promoter'sPromoter's ContributionContribution inin thethe
issueissue inin aa separateseparate bankbank accountaccount..
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Procedure for the PublicIssueProcedure for the PublicIssue
CollectionCollection ofof ApplicationApplication formsforms andand processingprocessing thethesamesame withwith thethe RegistrarRegistrar &&ShareShare TransferTransfer AgentAgent ininconsultationconsultation withwith thethe merchantmerchant bankerbanker..
SeparateSeparate accountaccount toto bebe openedopened forfor thethe applicationsapplications
receivedreceived fromfrom publicpublic SubmittingSubmitting 33--dayday postpost issueissue monitoringmonitoring reportreport withwithSEBISEBIbyby merchantmerchant bankerbanker..
BasisBasis ofof allotmentallotment inin consultationconsultation withwith thetheregionalregional stockstock exchangeexchange..
PostPostIssueIssue AdvertisementAdvertisement
DespatchDespatch ofof shareshare certificatescertificates // refundrefund ordersorders
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Procedure for the PublicIssueProcedure for the PublicIssue
EnteringEntering intointo anan listinglisting agreementagreement ObtainingObtaining permissionpermission fromfromStockStockExchangesExchanges
forfor listinglisting && tradingtrading ofof securitiessecurities
CommencementCommencement ofof tradingtrading ofof securitiessecurities
7878--dayday postpost issueissue monitoringmonitoring reportreport toto bebesubmittedsubmitted byby merchantmerchant bankerbanker withwithSEBISEBI..
RedressalRedressal ofofInvestorsInvestors GrievancesGrievances
ApplicationApplication totoSEBI/StockSEBI/StockExchangeExchange forfor
refundrefund ofof securitysecurity depositdeposit
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Employee Stock OptionEmployee Stock Option
AnAn optionoption givengiven toto wholewhole timetime directors,directors,officersofficers ofof employeesemployees ofof thethe companycompany
ToTo purchasepurchase thethe sharesshares ofof thethe companycompany atataa futurefuture datedate atat aa predeterminedpredetermined priceprice..
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Employee Stock OptionEmployee Stock Option
Employee means:Employee means:--
1.1. A permanent employee of the companyA permanent employee of the company
2.2. A director of the companyA director of the company3.3. An employee of a subsidiary or a holdingAn employee of a subsidiary or a holding
companycompany
I t t TI t t T
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Important TermsImportant Terms
VestingVesting :: VestingVesting meansmeans thethe processprocess byby whichwhich thethe employeeemployee
getsgets thethe rightright toto applyapply forfor andand bebe issuedissued sharesshares ofof
thethe companycompany underunder thethe optionsoptions grantedgranted toto himhim..
TillTill thethe vestingvesting takestakes place,place, thethe employeeemployee doesdoes notnot
havehave aa rightright toto applyapply forfor thethe sharesshares..
UponUpon vesting,vesting, thethe employeeemployee getsgets anan unfetteredunfettered
rightright toto applyapply forfor thethe issueissue ofof sharesshares uponuponfulfilmentfulfilment ofof thethe conditionsconditions
I t t TI t t T
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Important TermsImportant Terms
ActAct ofof exerciseexercise ::
TheThe actact ofof exerciseexercise impliesimplies anan applicationapplication beingbeing
mademade byby thethe employeeemployee toto thethe companycompany toto havehave thethe
optionsoptions vestedvested inin himhim issuedissued asas sharesshares uponuponpaymentpayment ofof thethe optionoption priceprice..
ExerciseExercise cancan taketake placeplace asas specifiedspecified afterafter vestingvesting..
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Employee Stock OptionEmployee Stock Option
ConditionsConditions ::
TheThe CompanyCompany shouldshould constituteconstitute aacompensationcompensation committeecommittee forfor the theadministrationadministration ofof ESOPESOP..
AA specialspecial resolutionresolution hashas toto bebe passedpassed totogetget thethe approvalapproval ofof thethe shareholdersshareholders..
ThereThere isis nono restrictionrestriction onon thethe nono ofof sharessharesissuedissued toto aa singlesingle membermember
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Employee Stock OptionEmployee Stock Option
ConditionsConditions ::
OptionOption grantedgranted toto employeeemployee shallshall notnot bebetransferabletransferable toto anyany personperson
OptionsOptions cannotcannot be be pledged,pledged,hypothecatedhypothecated oror mortgagedmortgaged
OnOn thethe deathdeath ofof thethe employeeemployee optionoption willwillvestvest withwith thethe legallegal heirheir..
TheThe DirectorsDirectors reportreport shallshall containcontain thethedetailsdetails ofof optionsoptions granted,granted, optionsoptionsvestedvested andand optionsoptions exercisedexercised..
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
ConditionsConditions forfor IssueIssue ofof BonusBonus sharesshares
AOAAOA mustmust permitpermit suchsuch issueissue
SufficientSufficient undistributedundistributed profitprofit mustmust bebe presentpresent AA resolutionresolution forfor capitalizingcapitalizing thethe profitsprofits mustmust
havehave beenbeen passedpassed byby thethe BODBOD
TheThe resolutionresolution ofof thethe BODBOD mustmust bebe approvedapprovedbyby thethe shareholdersshareholders inin thethe generalgeneral meetingmeeting
SEBISEBI guidelinesguidelines inin thisthis regardregard mustmust bebe
compliedcomplied withwith
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
ConditionsConditions forfor IssueIssue ofof BonusBonus sharesshares
NoNo companycompany shall,shall, pendingpending conversionconversion ofof
FCDs/PCDs,FCDs/PCDs, issueissue anyany bonusbonus shares,shares, unlessunlesssimilarsimilar benefitbenefit isis extendedextended toto thethe holdersholders ofofsuchsuch FCDs/PCDsFCDs/PCDs throughthrough reservationreservation ofofsharesshares inin proportionproportion toto suchsuch convertibleconvertible partpart
ofof FCDs/PCDsFCDs/PCDs..
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
Conditions for Issue of Bonus sharesConditions for Issue of Bonus shares
TheThe companycompany mustmust filefile withwith thethe RegistrarRegistrar
aa returnreturn statingstating thethe numbernumber andand nominalnominal amountamountofof bonusbonus sharesshares issuedissued togethertogether withwith
thethe names,names, addressesaddresses && occupationsoccupations ofof thethe allotallotteestees &&
aa copycopy ofof thethe resolutionresolution authorizingauthorizing thethe issueissue ofofsuchsuch sharesshares
ThisThis mustmust bebe donedone withinwithin 3030 daysdays ofof thethe
allotmentallotment ofof suchsuch sharesshares
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
SEBI guidelinesSEBI guidelines TheThe bonusbonus issueissue isis mademade outout ofof thethe freefree
reservesreserves builtbuilt outout ofof thethe genuinegenuine profitsprofits oror
sharesshares premiumpremium a/ca/c TheThe declarationdeclaration ofof bonusbonus issueissue ,, inin lieulieu ofof
dividend,dividend, isis notnot mademade
TheThe bonusbonus issueissue isis notnot mademade unlessunless thethe partlypartlypaidpaid shares,shares, ifif anyany existing,existing, areare mademade fullyfullypaidpaid upup
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
SEBI guidelinesSEBI guidelines
TheThe companycompany ----------
HasHas notnot defaulteddefaulted inin paymentpayment ofof interestinterest oror
principalprincipal inin respectrespect ofof fixedfixed depositsdeposits && interestinterest ononexistingexisting debenturesdebentures oror principalprincipal onon redemptionredemptionthereofthereof &&
HasHas notnot defaulteddefaulted inin respectrespect ofof thethe paymentpayment ofof
statutorystatutory duesdues likelike------providentprovident fundfund etcetc..
BONUS SHARESBONUS SHARES
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BONUS SHARESBONUS SHARES
SEBI guidelinesSEBI guidelines AA companycompany announcesannounces itsits bonusbonus sharesshares afterafter
thethe approvalapproval ofof BODBOD mustmust implementimplement thetheproposalproposal withinwithin 66 monthsmonths fromfrom thethe datedate ofofapprovalapproval && shallshall notnot havehave thethe optionoption ofofchangingchanging thethe decisiondecision
ThereThere shouldshould bebe thethe provisionprovision inin AOAAOA ofof thethe
companycompany forfor capitalisationcapitalisation ofof reservesreserves && ,if,ifnot,not, thethe companycompany shallshall passpass aa resolutionresolution iningeneralgeneral meetingmeeting makingmaking provisionprovision inin AOAAOA
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RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE
ExistingExisting shareholdersshareholders havehave thethe privilegeprivilege toto buybuy aaspecifiedspecified numbernumber ofof newnew sharesshares fromfrom thethe firmfirm atat aa
specifiedspecified priceprice withinwithin aa specifiedspecified timetime..
AA rightsrights issueissue isis offeredoffered toto allall existingexistingshareholdersshareholders individuallyindividually andand maymay bebe rejected,rejected,
acceptedaccepted inin fullfull oror acceptedaccepted inin partpart..
RightsRights areare oftenoften transferable,transferable, allowingallowing thethe holderholdertoto sellsell themthem inin thethe openopen marketmarket..
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RIGHTS ISSUERIGHTS ISSUE
(Notice)(Notice) TheThe companycompany mustmust givegive noticenotice toto eacheach ofof thethe
equityequity shareholders,shareholders, givinggiving himhim thethe optionoption toto taketake
thethe sharesshares againstagainst paymentpayment ofof thethe specifiedspecified moneymoney
TheThe noticenotice mustmust mentionmention thethe numbernumber ofof sharesshares thethe
shareholdershareholder hashas thethe optionoption toto taketake
MinimumMinimum ofof 1414 daysdays noticenotice mustmust bebe givengiven forfor
exerciseexercise ofof hishis optionoption
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RIGHTS ISSUERIGHTS ISSUE
(Notice)(Notice) UnlessUnless thethe ArticleArticle providesprovides otherwise,otherwise, thethe noticenotice
mustmust alsoalso statestate thatthat thethe shareholdershareholder shallshall havehave thethe
rightright toto renouncerenounce thethe offeroffer inin wholewhole oror inin part,part, inin
favourfavour ofof somesome otherother personperson
IfIf thethe shareholdershareholder doesdoes notnot informinform thethe companycompany ofof
hishis decisiondecision withinwithin aa stipulatedstipulated time,time, hehe shallshall bebedeemeddeemed toto havehave declineddeclined thethe offeroffer
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RIGHTS ISSUERIGHTS ISSUE
(Notice)(Notice) However,However, wherewhere somesome shareholdersshareholders ofof aa companycompany
werewere notnot givengiven noticenotice toto applyapply forfor allotmentallotment ofof
additionaladditional shares,shares, subsequentsubsequent allotmentallotment ofof sharesshares
toto otherother shareholdersshareholders atat aa meetingmeeting wouldwould bebe
invalidinvalid
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE(SEBI Guidelines)(SEBI Guidelines)
ApplicabilityApplicability
ListedListed companiescompanies
WhereWhere offeroffer exceedsexceeds 5050 lacslacs WithdrawalWithdrawal ofof aa rightsrights issueissue afterafter announcementannouncement
SuchSuch companycompany shallshall notnot bebe permittedpermitted toto getget anyany ofof itsits
securitiessecurities listedlisted forfor aa minimumminimum periodperiod ofof 1212 monthsmonths
UnderwritingUnderwriting
AppointmentAppointment ofof RegistrarRegistrar
AppointmentAppointment ofof MerchantMerchant BankerBanker
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RIGHTS ISSUERIGHTS ISSUE
(SEBI Guidelines)(SEBI Guidelines) PartlyPartly paidpaid upup sharesshares toto bebe mademade fullyfully paidpaid
DisclosureDisclosure inin letterletter ofof offeroffer
AgreementAgreement withwith depositorydepository
FilingFiling ofof letterletter ofof offeroffer withwith RegionalRegional StockStock
exchangeexchange
ClosureClosure ofof rightsrights issueissue
OpenOpen forfor 3030 daysdays butbut notnot moremore thanthan 6060 daysdays
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE
(SEBI Guidelines)(SEBI Guidelines) MinimumMinimum subscriptionsubscription
9090 %% minimumminimum subscriptionsubscription
IfIf notnot receivedreceived thenthen entireentire amountamount collectedcollected shouldshould beberefundedrefunded withinwithin 4242 daysdays fromfrom thethe datedate ofof closureclosure ofof thethe
issueissue
InIn casecase ofof delaydelay inin refundrefund byby moremore thanthan 88 days,days, interestinterest
hashas toto bebe paidpaid @@ 1515%% pp..aa
NoNo reservationsreservations inin rightright issueissue
PromotersPromoters contributioncontribution andand locklock inin periodperiod
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE(SEBI Guidelines)(SEBI Guidelines)
RightsRights ofof FCDsFCDs && PCDsPCDs holdersholders
RestrictionRestriction onon furtherfurther capitalcapital issueissue
OversubscriptionOversubscription notnot toto bebe retainedretained IssueIssue toto bebe mademade fullyfully paidpaid upup withinwithin 1212 monthsmonths
UtilisationUtilisation ofof fundsfunds inin casecase ofof rightsrights issueissue
ComplianceCompliance reportreport 33 dayday postpost issueissue monitoringmonitoring reportreport
5050thth dayday postpost issueissue monitoringmonitoring reportreport
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE(SEBI Guidelines)(SEBI Guidelines)
AdditionalAdditional facilityfacility forfor applyingapplying
AdvertisementAdvertisement mustmust bebe publishedpublished atat leastleast 77 daysdays beforebefore
thethe datedate ofof openingopening ofof thethe issueissue.. ItIt mustmust containcontain thethe
followingfollowing detailsdetails ::
CentersCenters wherewhere thethe shareholdersshareholders maymay obtainobtain duplicateduplicate
copycopy ofof applicationapplication formsforms inin casecase theythey dodo notnot receivereceive
thethe originaloriginal appapp formform ShareholdersShareholders maymay makemake applicationapplication toto subscribesubscribe toto thethe
rightsrights onon plainplain paperpaper (if(if aboveabove conditioncondition isis notnot
satisfied)satisfied)
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE(SEBI Guidelines)(SEBI Guidelines)
AdditionalAdditional facilityfacility forfor applyingapplying
TheThe advertisementadvertisement mustmust alsoalso containcontain aa formatformat toto enableenable
thethe shareholdersshareholders toto makemake thethe applicationapplication onon aa plainplain
paperpaper likelike namename ,, address,address, ratioratio ofof rightright issue,issue, issueissueprice,price, numbernumber ofof sharesshares heldheld etcetc..
TheThe applicationsapplications cancan bebe directlydirectly sendsend throughthrough
registeredregistered postpost alongalong withwith thethe applicationapplication moneymoney
ShareholdersShareholders makingmaking thethe applicationapplication otherwiseotherwise thanthan onon
aa standardstandard formform shallshall notnot bebe entitledentitled toto renouncerenounce theirtheir
rightsrights andand shallshall notnot utiliseutilise thethe standardstandard formform forfor anyany
purposepurpose eveneven ifif itit isis receivedreceived subsequentlysubsequently
RIGHTS ISSUERIGHTS ISSUE
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RIGHTS ISSUERIGHTS ISSUE(Exceptions)(Exceptions)
InIn thethe followingfollowing circumstancescircumstances thethe companycompany needneed
notnot givegive thethe rightright issueissue toto thethe existingexisting
shareholdersshareholders::
InIn casecase ofof thethe allotmentallotment ofof sharesshares withinwithin 22 yearsyears ofof thethe
formationformation ofof aa companycompany oror withinwithin 11 yearyear afterafter thethe firstfirst
allotmentallotment ,, whicheverwhichever eventevent occursoccurs earlierearlier
WhereWhere aa specialspecial resolutionresolution isis passedpassed inin thethe generalgeneralmeetingmeeting providingproviding thatthat thethe sharesshares needneed notnot bebe offeredoffered
toto thethe existingexisting shareholdersshareholders
ContdContd
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ContdContd..
WhereWhere nono suchsuch specialspecial resolutionresolution isis passedpassed butbut thethe
votesvotes castcast inin favourfavour ofof thethe proposalproposal containedcontained inin
thethe resolutionresolution movedmoved inin thethe GMGM exceedexceed thethe votes,votes,
ifif any,any, castcast againstagainst thethe proposalproposal && thethe CentralCentral
GovtGovt.. isis satisfied,satisfied, onon anan applicationapplication mademade byby thethe
BODBOD inin thisthis behalf,behalf, thatthat thethe proposalproposal isis mostmost
beneficialbeneficial forfor thethe companycompany
ContdContd
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ContdContd..
AA privateprivate companycompany needneed notnot offeroffer itsits furtherfurther issueissuefirstfirst toto existingexisting shareholdersshareholders
InIn casecase ofof issueissue ofof sharesshares againstagainst conversionconversion ofof
loansloans oror debenturesdebentures
SecSec 8181 doesdoes notnot comecome intointo playplay wherewhere thethe
companycompany proposesproposes toto makemake allotmentallotment ofof sharesshares toto
itsits creditorscreditors