Rights issue by pvt. company

Yes, you are right.  There is no such restriction in case of rights issue u/s 62(1)(a).

Dear Sir,

Thanks a lot for your prompt reply .

So we can directly issue offer letter as stated in 62(1) (a) which as already decided between the companies,  will be accepted by the Holding company and renounce by the second shareholder who holds only two shares in the company with nomination of Holding Company.

Further once offer is accepted we can bring in the money by way of share application money , same money can be either utilised for the purpose for which it is bring in , immidiately after receipt and shares can be issued as per  FEMA Rules.

In this case we need not require to keep the fund in the sperate bank account until the allotment of issue.

Do we need to comply with any additional formality .

whether plain interpretation of the Section 23  (2) is sufficient to assume that Private Placement and Rights issue are separate from each other and rules of Private Placement are not applicable to Rights issue.

Thanks in advance for your kind reply.