Sourabh Jaiswal ( Jabalpur )
22-Nov-2022 08:49 AM
Promoter contribution
Sir, Minimum promoter contribution should be 20% of post issue capital .. So this contribution can exceed issue size ?? Eg:- existing capital of a company is 1000 cr. Company raising 150 cr post issuse capital stands to be 1150 cr... 20%of 1150 =230cr which is exceeding the issue size i.e 150 cr. ??
in case of IPO, Minimum promoter contribution should be 20% of post issue capital. The limit of 20% shares is including the existing shares held by promoters. So, in your example, if existing capital is 1000cr and if promoters are already holding 500 Cr then they don't have to purchase shares in the proposed issue. But if promoters are already holding 200 cr then they have to buy shares of rs. 30 cr to keep the promoters contribution 20%. In case of FPO promoters contribution is either to the extent of 20%. of the proposed issue size or to the extent of 20% of the post-issue capital; so the above question will not arise.
Answer given by Shubhamm Sir at 30-Nov-2022 08:37 PM