Differential Pricing

Listed/unlisted companies may issue shares/convertible securities to applicants in the firm allotment category (i.e allotment on a firm basis made to Indian and multilateral development finance institutions, Indian mutual funds, foreign institutional investors including non resident Indians/overseas corporate bodies and permanent/regular employees of the issuing company) at a price different from the price at which the net offer to the public (i.e the Indian public, excluding firm allotments /reservations /promoters contribution) is made, provided the price at which the’ security is offered to the applicants in firm allotment category is higher than the price at which securities are offered to the public.

A listed company making a composite issue of capital (i.e public cum-rights basis made through a single offer document in which the allotment for both public and rights components is proposed to be made simultaneously) may issue securities at differential prices in its public and rights issue. In the public issue, which is a part of a composite issue, differential pricing in the firm alliteration category vis-a-vis the net offer to the public is also permissible. However, justification for the price differential should he given in the offer document in case of firm allotment category as well as in all composite issues.

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