A2Z Ltd., an unlisted company having a paid-up share capital of ₹5 crore consisting of 50,00,000 equity shares of ₹10 each fully paid-up proposes to make an initial public offer (IPO) of 1,00,00,000 equity shares of ₹10

In accordance with the Regulation 32 (1) of the SEBI (ICDR) Regulations, 2009 promoters of the issuer shall contribute in the public issue in case of an initial public offer, not less than twenty per cent of the post issue capital. In the above case, pre-issued capital is ₹ 5 crore and proposed issue is ₹ 10 crore. Of the total issue capital i.e. ₹ 15 crore, the promoters have to contribute minimum of ₹ 3 crore (20% of ₹ 15 crore). For the purpose of promoters' contribution, the following securities shall be considered as ineligible as per Regulation 33 (i) (b): Specified securities acquired by promoters during the preceding one year at a price lower than the price at which specified securities are being offered to public in the initial public offer: Provided that nothing contained in this clause shall apply: if promoters pay to the issuer, the difference between the price at which specified securities are offered in the initial public offer and the price at which specified securities had been acquired. In the above case, 11,00,000 shares acquired by the promoters on 1st January, 2015 shall not be taken into account for the computation of promoter's contribution, as the allotment was made in the preceding one year at face value and the proposed IPO is at premium of ₹ 5 per Share, unless the difference is paid by the promoter. However, 11,00,000 shares acquired during the 1st January, 2009 shall be taken into account for promoter's contribution. Thus the fresh contribution to be brought in by promoters would be 8,00,000 shares thereby, the total contribution is ₹ 3 crores.