Question:
Diksha Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of 10%. The whole amount was payable on application. Applications were received for 3,00,000 equity shares. The company decided to allot the shares on pro-rata basis to all the applicants. The amount refunded by the company was:
Diksha Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of 10%. The whole amount was payable on application. Applications were received for 3,00,000 equity shares. The company decided to allot the shares on pro-rata basis to all the applicants. The amount refunded by the company was:
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In pro-rata allotment, only unallotted excess applications are refunded. Always multiply unallotted shares by the total amount per share.
Updated On: Jul 7, 2025
- ₹ 22,00,000
- ₹ 33,00,000
- ₹ 11,00,000
- ₹ 20,00,000
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The Correct Option is C
Solution and Explanation
Total applications = 3,00,000 shares
Shares issued = 1,00,000 shares
Oversubscription = 2,00,000 shares
Amount per share = ₹ 10 + ₹ 1 (premium) = ₹ 11
Total excess = 2,00,000 × ₹ 11 = ₹ 22,00,000
But since allotment is on pro-rata, the excess of 2/3 applications are retained for allotment. So refund = 1/3 of ₹ 33,00,000 = ₹ 11,00,000 Final Answer: ₹ 11,00,000
Shares issued = 1,00,000 shares
Oversubscription = 2,00,000 shares
Amount per share = ₹ 10 + ₹ 1 (premium) = ₹ 11
Total excess = 2,00,000 × ₹ 11 = ₹ 22,00,000
But since allotment is on pro-rata, the excess of 2/3 applications are retained for allotment. So refund = 1/3 of ₹ 33,00,000 = ₹ 11,00,000 Final Answer: ₹ 11,00,000
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