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PROMOTOR HOLDING

130 views 1 replies

ANKIT KUMAR

60 Points Joined January 2017

if any promotor dilute his holding by issue bonus share to minority shareholders then in such case is there any decrease in the no. of shares held by promoters or not.????
what is affected....value of shares or no. of shares???

Replies (1)

Sachin C

Tax Consultant

107 Points Joined December 2018

Hello Ankit,

If a promoter is looking for Diluting his stake in the Company he has two options one being that he shall transfer his shares by executing a Share Transfer Deed(in Form SH-4) and pay the relevant Stamp duty and the second one being the company buying Back his shares and then go for a share cancellation. Issuing of Bonus shares on the other hand is Capitalisation of profits. So if a promoter dilutes his stake through the first method then there is no change in the overall Value of Share capital nor the No. of Shares but onlyy the stake(in %) shall differ.

Thank You,

Sachin C