how we calculate minimum subcription on ipo

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2012
dear all ,
a public co. cannot issue their shares until 90% of minimum subscription received.
how we calculate 90%
is it on application money or whole of share value
say co.co ipo 10k shares @ 100 each and on application rs 10 so minimum subscription will be 10k*10*90% = 90000
plz explain

thanks in advance

CA Lokesh Pokharna

CA Lokesh Pokharna (Expert)
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31 July 2012 The minimum shares the company needs to get from the public out of the total issue by the date of closure. (Presently every company need to raise 90% of the issued amount). Else, the company shall refund the whole amount received. This 90 % has to be exclusive of the cheques that are not cleared.

in your case it will be 10000x100x90%=9 lac