Actnow Edge Limited, an unlisted company, is in the process of expanding its business. For expansion, it needs funds of ₹200 crore. For raising ₹200 crore, company has decided to bring an initial public offer through boo

CS Executive · Securities Laws and Capital Markets · PYQS · June 2021
Actnow Edge Limited, an unlisted company, is in the process of expanding its business. For expansion, it needs funds of ₹200 crore. For raising ₹200 crore, company has decided to bring an initial public offer through book building mechanism. It has fixed a price band of ₹500 – ₹600. Referring to provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, advise the company on the following matters: What should be minimum application value and minimum number of equity shares in one application ?

Answer & Explanation:

The issuer shall stipulate in the offer document the minimum application size in terms of number of specified securities which shall fall within the range of minimum application value of ten thousand rupees to fifteen thousand rupees. Thus, in the given case Actnow Edge Limited should fix the minimum number of shares in one application in such a manner that minimum application value should not cross the limit of ₹10,000 to ₹15,000. Hence, minimum number of shares in one application will be: At lower level of price band: 20 Shares (₹10000/₹500) & 30 Shares (₹15000/₹500) At higher level of price band: 17 Shares (₹10000/₹600) & 25 Shares (₹15000/₹600)

Topics: Public Issues

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