The promoters of Z Ltd. holds 78 percent shares of the Equity Share capital of the company. The promoters are intending to reduce their holding to meet the provisions of regulatory authorities of minimum public subscript
CS Professional · Corporate Funding & Listings in Stock Exchanges · PYQS · June 2021
The promoters of Z Ltd. holds 78 percent shares of the Equity Share capital of the company. The promoters are intending to reduce their holding to meet the provisions of regulatory authorities of minimum public subscription by way of Qualified Institutional Placement (QIP). Total Issued Share Capital of the Z Ltd. is ₹10 Crore consisting of 1 crore shares of ₹10 each. As a Company Secretary advise the Z Ltd. on the following points: (i) What is minimum quantity the promoters should offer under the QIP?
Answer & Explanation:
Every listed company is required to maintain public shareholding of at least twenty-five per cent as per the Securities Contracts (Regulation) Rules, 1957 and therefore, balance can be held by promoter / promoter group. In the given case the promoters can offer shares up to 3% of 1 crore shares i.e. 3 lakh shares of ₹10 each under QIP.
Topics: Qualified Institutional Placement (QIP)
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