XYZ Ltd. is proposing to make a public issue of 400 crore equity shares through the book building mechanism where 50% of the issue size is required to be allotted to Qualified Institutional Buyers. Determine the amount,

CS Executive · Capital Markets & Securities Laws · PYQS · December 2017
XYZ Ltd. is proposing to make a public issue of 400 crore equity shares through the book building mechanism where 50% of the issue size is required to be allotted to Qualified Institutional Buyers. Determine the amount, if any, required to be brought in by the anchor investors given : The price at which allocation is made to anchor investors is ₹ 855 per share, and The price fixed as a result of book building is ₹ 858 per share.

Answer & Explanation:

(iii) Computation of the amount required to be brought in by anchor investors given Book building price = ₹ 858/- per equity share Anchor Investor allocation price = ₹ 855/- per equity share Since the price fixed as a result of book building is higher than the price at which allocation is made to anchor investor, hence the anchor investor shall be required to bring in the additional amount i.e., ₹ 3/- per equity share allocated.

Topics: Public Issue and Book Building

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