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What is meant by "pro - rata" allotment

Mohika Sinha (Student CA- Final CS- Executive) (169 Points)

11 June 2011

I am a student of class 12th (comm). the concept of pro rata allotment (under the heading over - subscripttion) has not been well explained in my book. Please tell me it's meaning , how to calculate it and its course of action

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4 Replies

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 11 June 2011

when the company have received the applications in excess of the actual allotment to be made than this method is used by the co.

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 11 June 2011

let the co. have to made allotment of 1000 shares and applications r received for 1500 shares than co. will issue 10 shares to every 15 shares application received

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(Guest)

perfect answer by future ca

charanteja.nsr (ACMA and BCOM) (818 Points)
Replied 11 June 2011

When issue is over-subscribed, the company will have to allot to each applicant to each applicant according to the number of share applied by him. Ex- In case a company has offered 100000 shared to the public but the public has applied for 200000 shares, pro rata allotment would be made in proportion of 1:2.

Best of luck.