Explain the term 'private placement' in relation to issue of securities by a company. What conditions must be fulfilled by a company under the Companies Act, 2013 before issuing securities on private placement basis.

Explanation II (ii) to section 42 (1) defines the term "private placement" to mean any offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) through issue of a private placement offer letter in form PAS-4 [Rule 12 of the Companies (Prospectus and Allotment of Securities) Rules, 2014] and which satisfies the conditions specified in section 42 of the Companies Act, 2013. Under private placement, the offer of securities or invitation to subscribe securities, shall be made to such number of persons not exceeding fifty or such higher number as may be prescribed in a financial year for each kind of security, (excluding qualified institutional buyers, and employees of the company being offered securities under a scheme of employee stock option), and on such conditions as may be specified under Rule 14(2) of Companies (Prospectus and Allotment of Securities) Rules, 2014. Rule 14(2) prescribes the limit of two hundred persons in aggregate in a financial year. The following conditions to be fulfilled by a company before issuing securities on private placement basis: the proposed offer of securities has been previously approved by the shareholders of the company, by a Special Resolution, for each of the offers or invitation. If the said offer or invitation is for non-convertible debentures, it shall be sufficient if the company has passed a previous special resolution only once in a year for all the offers or invitation for such debentures during the year. The value of such offer or invitation per person shall be with an investment size of not less than ₹20,000 of face value of the securities. All monies payable towards subscription of securities under this section shall be paid through cheque or demand draft or other banking channels but not by cash. The payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities and the company shall keep the record of the Bank account from where such payments for subscriptions have been received. The monies payable on subscription to securities to be held by joint holders shall be paid from the bank account of the person whose name appears first in the application. All offers shall be made only to such persons whose names are recorded by the company prior to the invitation to subscribe, and that such persons shall receive the offer by name. Offer letter should be accompanied by application form serially numbered and addressed specifically to a person and should be sent in 30 days from recording of names [sec 42(7)]. No person other than addressee can apply for shares. Complete information about offer should be filed with the Registrar in 30 days of circulation of offer. In the explanatory statement justification for price should be given.