Shaurya Ltd. a company dealing with glass molding and peripherals has plans to go public and raise ₹ 1,000 crores. They appoint CFQ Financial Services as their lead managers. The company's directors having no knowledge o

The directors of the company are not correct as the rules pertaining to issue states that allotment of shares has to be made based on the following regulation: Regulation 40 & 136 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009: If an issuer makes an IPO/FPO other than through the book building process, desires to have the issue underwritten, it shall appoint the underwriters in accordance with the SEBI (Underwriters) Regulations, 1993. If the issuer makes a public issue through a book building process: the issue shall be underwritten by lead managers and syndicate members. However, at least 75% of the net offer to the public is proposed to be compulsorily allotted to the QIBs, and such portion cannot be underwritten. the issuer shall, prior to filing the prospectus, enter into an underwriting agreement with the lead manager(s) and syndicate member(s) which shall indicate the number of specified securities which they shall subscribe to at the predetermined price in the event of under-subscription in the issue. if the syndicate member(s) fail to fulfil their underwriting obligations, the lead manager(s) shall fulfil the underwriting obligations. the lead manager(s) and syndicate member(s) shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations. in case of every underwriting issue, the lead manager(s) shall undertake minimum underwriting obligation as specified in the SEBI (Merchant Bankers) Regulations, 1992. where the issue is required to be underwritten, the underwriting obligations should at least to the extent of minimum subscription.