Explain the term 'preferential offer'. Whether a company issuing securities on preferential basis is also required to comply with the conditions concerning private placement?

Explanation (i) to rule 13(1) of the Companies (Share Capital and Debentures) Rules, 2014, explains the term 'preferential offer' to mean an issue of shares or other securities, by a company to any select person or group of persons on a preferential basis and does not include shares or other securities offered through a public issue, rights issue, employee stock option scheme, employee stock purchase scheme or an issue of sweat equity shares or bonus shares or depository receipts issued in a country outside India or foreign securities. As per section 62(1)(c), where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares may be offered by way of a preferential offer, to any persons whether or not the holder of equity shares or employee of the company, if authorised by a special resolution passed in a general meeting. The company issuing securities on preferential basis should also comply with conditions laid down in section 42 of the Act for private placement.