Scribd
Upload
4 views

Types of Issue

Uploaded by

priyansh26
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
4 views

Types of Issue

Uploaded by

priyansh26
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 5

Issues of Capital

1
Kinds of issues which can be made by an Indian company in India
• Issues can be classified as Public, Rights, Bonus & Private Placement

• While right issues by a listed company and public issues involve a detailed
procedure, bonus issues & private placements are simpler

Classification of issues:
a) Public issue
(i) Initial Public offer (IPO)
(ii) Further Public offer (FPO)
b) Rights issue
c) Composite Issue
d) Bonus issue
e) Private placement
(i) Preferential issue (ii) Qualified institutional placement (iii) Institutional
Placement Programme
2
(a) Public issue

When an issue / offer of shares or convertible securities is made to new investors. It is


further classified into Initial public offer (IPO) & Further public offer (FPO)

(i) IPO

When an unlisted company makes either a fresh issue of shares or convertible securities
or offers its existing shares or convertible securities for sale or both for first time. This
paves way for listing and trading of the issuer’s shares or convertible securities on
Stock Exchanges

(ii) FPO

When an already listed company makes either a fresh issue of shares or convertible
securities to public or an offer for sale to the public 3
(b) Rights issue (RI): Issue of shares or convertible securities is made by an issuer
to its existing shareholders on a record date
 Rights are offered in a particular ratio to number of shares or convertible
securities held as on record date

(c) Composite issue: Issue of shares or convertible securities by a listed issuer on


public cum-rights basis, wherein the allotment in both public issue & rights issue is
proposed to be made simultaneously

(d) Bonus issue: Issuer makes an issue of shares to its existing shareholders
without any consideration based on number of shares already held by them on a
record date
 Shares are issued out of Company’s free reserves or share premium a/c

(e) Private placement: Issuer makes an issue of shares or convertible securities to a


select group of persons not exceeding 49& which is neither a rights issue nor a
public issue. 4
(i) Preferential allotment: When a listed issuer issues shares or convertible securities,
to a select group of persons in terms of provisions of Chapter VII of SEBI (ICDR)
Regulations, 2015.
 Issuer has to comply with various provisions which inter‐alia include pricing,
disclosures in the notice, lock‐in etc., in addition to requirements specified in
Companies Act.

(ii) Qualified institutions placement (QIP): Listed issuer issues equity shares or NCD
along with warrants and convertible securities other than warrants to QIB only, in
terms of provisions of Chapter VIII of SEBI (ICDR) Regulations, 2015

(iii) Institutional Placement Programme (IPP): When a listed issuer makes a FPO of
equity shares, or offer for sale of shares by promoter group of listed issuer in
which offer, allocation & allotment of such shares is made only to QIB in terms
Chapter VIII A of SEBI (ICDR) Regulations, 2015 for purpose of achieving
minimum public shareholding 5

You might also like