Question:

Answer the question on the basis of the following passage:
Adhunik Ltd is a consumer goods manufacturing unit running the business for the last 11 years. The C.E.O Mr. Aman wants to raise capital with an objective to modernise the existing plant. For this he has made a plan to offer equity and preference shares in the primary market. He uses a combination of methods. He got the prospectus printed, so as to make a direct appeal to investors. Also he has invited offers from some brokers to buy shares at an enbloc value. Since Mr. Aman has a great circle of friends who are institutional investors, he can soon gather capital. Another method that he wants to use is the online system of stock exchange.
"He has invited offers from some brokers to buy shares ...... at an enbloc value."
Identify the method of floatation used in these lines.

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In private placements, companies sell securities to a select group of investors rather than the general public. It is typically used for raising capital quickly.
Updated On: Apr 24, 2025
  • Offer for sale
  • Offer through prospectus
  • Rights issue
  • Private placement
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The Correct Option is D

Solution and Explanation

The passage describes a situation where brokers are invited to buy shares at an enbloc value, which is characteristic of "Private placement." In this method, shares are sold to a small group of investors, usually institutional investors.
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