Is minimum subscripttion applicable for debenture issue as well? What is the role or importance of underwriters here?
1 Replies
Mahendra Raja Gopal
(Student)
(48 Points)
Replied 10 December 2009
Yes, Minimum Subscripttion is applicable for debenture issue as well. As per SEBI guidelines, 2000, no company is allowed to make allotment of Shares or Debentures unless it has received atleast a minimum of 90% of the subscripttion against the entire issue.
The Underwriter gives an assurance/Commitment to take shares or debentures in case of a shortfall in minimum Subscripttion. For more details refer Sec 76 of The Companies Act, 1956.
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