Question

Identify the method of flotation adopted by the company.

Answer 1

Private Placement is the method of flotation adopted by the company-

Shares can be distributed through outright sale by companies to select group of persons (u/s 80 of the Companies Act 1956). This is known as placement or private placement. In other words, when an issuer makes an issue of securities to a select group of persons not exceeding 49, and which is neither a rights issue nor a public issue, it is called a private placement.