Mean For Preferential Issue

A Preferential issue is an issue of stocks or of convertible securities through listed firms to a select number of person’s under Section 81 of the Companies Act, 1956 that is neither a public issue nor a rights issue. This is a speedier path for a firm to increase equity funds. The issuer firm has to comply with the Firms Act and the needs contained in the Chapter related to preferential allotment in Securities and Exchange Board of India guidelines which inter-alia include costs, disclosures in notice and so on.

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