Question

Core Services Ltd. invited applications for allotting 75,000 Equity Shares of ₹ 10 each at par payable ₹ 5 on application and balance on allotment. It received ₹ 3,00,000 as application money. Number of Equity Shares that the company will allot to subscribers is

पर्याय

• 75,000 Equity Shares.

• 60,000 Equity Shares.

• 70,000 Equity Shares.

• Nil.

Answer 1

Nil.

Explanation:

1. Calculate Shares Applied For:

Shares Applies = `"Application Money Received"/"Application Money per Share" = (3,00,000)/5 = 60,000 "shares"`

2. Check Subscription Percentage:

Subscription Rate = `(60,000 "(Applied)")/(75,000 "(Issued)") xx 100 = 80%`

3. Minimum Subscription Rule:

A minimum subscription of 90% of a company's issued public offer is required per SEBI norms. The business must return all funds since it only received an 80% subscription, making it unable to proceed with the allocation.