Forecore Ltd. is a closely held company with 25 shareholders and proposes to make a public offer of convertible securities. The existing shareholders (Promoter) have their holdings in physical form. The company is wishin

Section 29 of the Companies Act, 2013 provides that every company making public offer shall issue the securities only in dematerialised form by complying with the provisions of the Depositories Act, 1996 and the regulations made thereunder. Rule 9 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 further provides that the promoters of every public company making a public offer of any convertible securities may hold such securities only in dematerialised form, provided that the entire holding of convertible securities of the company by the promoters held in physical form up to the date of the initial public offer shall be converted into dematerialised form before such offer is made and thereafter such promoter shareholding shall be held in dematerialized form only. Accordingly, Forecore Ltd. will be required to convert the promoters' shareholding (assumption has been taken that promoters' shareholding is convertible security) in dematerialized form before the aforesaid offer is made to public. Further, the new offer of convertible securities can only be made in dematerialized form; hence, Forecore Ltd. is prohibited from issuing such securities in physical form.