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What are the eligibility norms for an unlisted company for making a public issue?

April 26, 2017COMPANY eligibility ISSUE norms public unlisted

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What are the eligibility norms for an unlisted company for making a public issue?

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An unlisted company has to satisfy the following criteria to be eligible to make a public issue Pre-issue networth of the co. should not be less than Rs.1 crore in last 3 out of last 5 years with minimum networth to be met during immediately preceding 2 years and track record of distributable profits for at least three (3) out of immediately preceding five (5) years and the issue size (i.e. offer through offer document + firm allotment + promoters contribution through the offer document) shall not exceed five (5) times its pre-issue networth. In case an unlisted company does not satisfy any of the above criterion, it can come out with a public issue only through the Book-Building process. In the Book Building process the company has to compulsorily allot at least sixty percent (60%) of the issue size to the Qualified Institutional Buyers (QIBs), failing which the full subscription monies shall be refunded.