WE ARE A LISTD COMPANY WISH TO ISSUE PREFERENCE SHARES (NON CONVERTIBLE) TO ONE OF OUR INDIAN GROUP CO. AT A PREMIUM . TO MY UNDERSTANDING SINCE IT IS NON CONVERTIBLE PREF SHARES NOT GOING TO BE LISTED THE PRICING OF SHARES CAN BE BASED ON THE CCI GUIDELINES BASED ON THE NETWORTH OR PECV METHOD .
PLS GIVE UR VALUABLE COMMENTS URGENT .
preferece shares that are non-convertible can be issued at any value. The guidelines issued by the erstwhile CCI are not binding at the moment. However, as a matter of good governance, the pricing shoud be based on prudent valuation.
preference shares would carry a fixed rate of dividend and a fixed redemption tenure and amount. Hence, the pricing and premium should be commensurate to the dividend rate and the redemption premium.
CAclubindia
