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ankit singh

ankit singh (Querist)

21 May 2010 over subscription ,under subscription of shares define them

Amit

Amit (Expert)

21 May 2010 Over Subcsription: A co. issues 100 shares, but investors apply for 120 shares. That is oversubscription by 20 shares

Under Subscription : A co. issues 100 shares, but investors apply for 80 shares. That is Undersubscription by 20 shares

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)

21 May 2010 It is unlikely that the public apply for the exact number of applications invited by the company. When applications received exceed the number invited, the share is said to be over-subscribed. It also means that the company received more application money than what was originally invited.

Under-subscription is a situation just the opposite of over-subscription. Here the company has received less number of applications than what was invited.

CS Richa Sharma

CS Richa Sharma (Expert)

21 May 2010 Under Subscription:-This means that fewer shares were subscribed for (bought) than shares were available for sale. In this case all we need to do is to deal with the issue of the shares that were subscribed. The rest of the shares may then be issued at a later date.
However, it might be the case that if a share issue is seriously under subscribed then the offer for sale will be withdrawn. In this case all money received will be returned and no further action will be taken unless the company wants to try again later.

Over Subscription:-This means that more shares are applied for than the shares available for sale.

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