Read the following lines and answer question on the basis of the same:
ISQAA SOLAR limited is searching options to raise Rs. 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. for suggesting options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of Rs. 1500 crores the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. Rs. 4500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of Rs. 6000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise Rs. 8,000 crores through the on-line system of the stock exchange by entering into an agreement with the exchange.
(i) Identify the method of floatation of new issues in the primary market, not taken up by ISQAA SOLAR LTD.
(a) Offer for sale
(b) Rights issue
(c) E-IPO
(d) Offer through prospectus
(ii) “Rs. 4500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital.’’ Identify the method of floatation of new issues in the primary market being discussed above, which the company has decided to use.
(a) Offer for sale
(b) Private placement
(c) Right Issue
(d) Offer through Prospectus
(iii) Identify the reason which has made the firm raise funds from the institutional investors.
(a) It helps to raise funds quickly
(b) It is not expensive
(c) Both a & b
(d) None of the above.
(iv) How much money was raised by the company through E-IPO’s
(a) Rs.8000 crores
(b) Rs. 4500 crores
(c) Rs. 20,000 crores
(d) Rs. 6000 crores
