Whether these entities are eligible or not to make initial public offer ? Answer with reasons in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The issuer has an average operat
CS Executive · Securities Laws and Capital Markets · PYQS · June 2023
Whether these entities are eligible or not to make initial public offer ? Answer with reasons in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The issuer has an average operating profit of ₹ 10 crore during the three preceding years, with operating profit in each of the preceding three years.
Answer & Explanation:
Eligibility: Not Eligible Reason: As per Regulation 6(1)(b) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, an issuer shall be eligible to make an initial public offer if it has an average operating profit of at least ₹ 15 crore, calculated on a restated and consolidated basis, during the three preceding years (of twelve months each), with operating profit in each of the three preceding years. In the given situation, the issuer has an average operating profit of ₹ 10 crore, which is less than the required ₹ 15 crore. Therefore, the entity is not eligible to make an initial public offer.
Topics: Issue of Capital and Disclosure Requirements (ICDR)
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