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Question

Meca Ltd., a reputed automobile manufacturer needs rupees ten crores as additional capital to expand its business. Atul Jain, the CEO of the company wanted to raise funds through equity. On the other hand, the Finance Manager, Nimi Sadheve said that the public issue may be expensive on account of various mandatory and non-mandatory expenses. Therefore, it was decided to allot the securities to institutional investors. Name the method through which the company decided to raise additional capital.


  1. Offer through Prospectus

  2. Offer for Sale

  3. Private Placement

  4. Rights Issue


Solution

The correct option is C

Private Placement


'Private Placement' is the method through which the company decided to raise additional capital.

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