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Equity Dilution

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(Querist)
02 November 2010 Pls explain me regarding the raising of funds through equity dilution?
Is that same thing as issue of additional shares?
What is procedure for raising the funds through eqty dilution in case of Private company?
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CA Shailesh Kumar Bhagat

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CA Shailesh Kumar Bhagat (Expert)
04 November 2010 Equity dillution means increasing the liquidity. The compnay will dillute the share by spilitting. This in not like issue of additional shares.
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Ankur Garg

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Ankur Garg (Expert)
08 November 2010 It is connected to issue of additional shares.

Issue of additional shares and raising of funds thereof will result in dilution of stake of existing shareholders.

It is also termed as preferential allotment. Section 81 is not applicable to a pvt. co.

So you may issue new shares to new allottees and raise funds.

Regards
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