In terms of Prospectus and Allotment of Securities Rules 2014, a private placement of securities can be done. Under Point No.14(2)(c) (Page 21of the PDF file), it is mentioned as under:"(c) the value of such offer or invitation per person shall be with an investment size of not less than twenty thousand rupees of face value of the securities;"
In case of a co having shares of the face value of Rs.10/- and the premium involved is Rs.490/- aggregating to Rs.500/- per share, then Plain reading of this rule means that a subscriber has to subscribe for 2000 securities (2000X10=20000 face Value) multiplied by Rs.500/- per equity share aggregating to Rs.10,00,000/-
However, generally accepted figure is Rs.20,000/- minimum subscripttion is required.
Can anybody throw light on this, whether the meaning should be Rs.20,000/- per application and not the "Face Value" of Rs.20,000 (Resulting to Rs.10,00,000/- in the example give ablve)?
Our company wants to invite applications under private placement and hence the guidance required.
CAclubindia
