Dear All: Would appreciate your inputs/response to the below.
12 like minded people formed a group in June 2020 to explore new ideas to set-up a profit making entity.
Majority of these people met every week to discuss their ideas in different domains, type of entity to be formed, etc.
In October 2020 a Pvt. Ltd. entity was registered. Shares were issued at Rs. 10/share to the investors in this entity. Total investment by this group was Rs. 10 lacs initially.
This team finalized on a project in November 2020 requiring total investment of Rs. 10 crores.
This firm is planning to go with 70% bank loan and 30% equity.
Towards the 30% (Rs. 3 crores), the current set of shareholders are able to bring in additional investment amounting to Rs. 2 crores. There is a gap of Rs. 1 crore.
Friends of the existing shareholders are interested to invest to fill this gap of Rs. 1 crore
There is no revenue at this point in time for this entity. However, the existing shareholders have put in a lot of time and effort in the past 11 months to discuss ideas, evaluation of these ideas/opportunities, discussing with different departments and analysts, etc.
1. Can this firm charge premium for share price for the new entrants?
2. If yes, what is the method to calculate the current share price for the new entrants?
Thanks and Regards,
SamSue
CAclubindia
