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when shares aree issued at a lower than the face value they are said to be issue of share at discount. the main reason behind issuing share is to attract retailer

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Q: Why issue rights issue of shares at a discount?
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Which companies issue share in discount?

Companies who are in the market from long period of time can issue shares at discount.


Discount on issue of shares and debentures?

Issue of shares at discountA company may issue shares at a discount i.e at a value below its par value. The following conditions must be satisfied in connection with the issue of shares at a discount :-The shares must be of a class already issuedIssue of the shares at discount must be authorised by resolution passed in the general meeting of company and sanctioned by the company law board.The resolution must also specify the maximum rate of discount at which the shares are to be issuedNot less than one year has elapsed from the date on which the company was entitled to commence the business.The shares to be issued at discount must issued within 2 months after the date on which issue is sanctioned by the company law board or within extended as may be allowed by the Company Law Board.The discount must not exceed 10 percent unless the Company Law Board is of the opinion that the higher percentage of discount may be allowed in special circumstances of case.


Give few examples of Miscelleneous expense?

preliminary expenses, discount on issue of shares


Can New company issue share at discount?

Most of the time, the new companies will offer their shares at discount prices. There is no law that governs/controls the prices at which the company can offer their shares to people for sale.


For the company who had already have IPO mif they want to issue the new shares are they need to make another IPO?

No. A company can issue an IPO only once. They can issue new shares through bonus shares or through rights issues.


Who is entitled to subscribe to a Rights Issue?

Those who held shares at the time of book closure.


How does a company lower their gearing ratio?

Easiest way is to make a Rights issue of shares.


What is Non renounceable rights issue of shares?

Unlike a standard rights issue an non-renounceable rights issue is one that cannot be transferred to another investor. Under a traditional renouncable right issue the holder of the shares as the option to transfer rights to another investor (usually for a price). This is not an option for a non-renounceable rights issue and the investor has one of two choices 1) Take up the rights 2) Ignore the rights Neither is necessarily the right option as the decision the investor needs to take depends on why the company has offered the rights in the first place.


What is Non-renounceable rights issue of shares?

Unlike a standard rights issue an non-renounceable rights issue is one that cannot be transferred to another investor. Under a traditional renouncable right issue the holder of the shares as the option to transfer rights to another investor (usually for a price). This is not an option for a non-renounceable rights issue and the investor has one of two choices 1) Take up the rights 2) Ignore the rights Neither is necessarily the right option as the decision the investor needs to take depends on why the company has offered the rights in the first place.


What are the different sources of capital?

· Bank lending· Capital markets· Debenture· Deferred ordinary shares· Franchising· Government assistance· Hire purchase· Loan stocks· New share issue· Ordinary shares· PARTS· Preference shares· Retained earning· Rights issue· Sources of funds· Venture capital· Rights issue· Sources of funds· Venture capital


Advantages and disadvantages of rights issue?

Some advantages to rights issues include the fact that share holders are able to buy additional shares at a lower rate, and by selling these shares, the company is able to pay off some of their debt. Disadvantages of rights issues include stocks that have a reduced value.


What is maximum discount on shares issued?

10%