About Private Placement/ Preferential Issue

Private Placement:- Private Placement means any offer of securities or invitation to subscribe securities (equity or securities that convert to equity) to a select group of persons by a company, other than by way of public offer, through issue of a private placement offer letter. A private placement offer cannot be made to more than 200 people in aggregate in a financial year excluding “qualified institutional buyers” and employees of the company being offered securities under a scheme of employee’s stock option 

Preferential Issue:- Preferential Offer’ means an issue of shares or other securities, by a company to any select person or group of persons on a preferential basis and does not include shares or other securities offered through a public issue, rights issue, employee stock option scheme, employee stock purchase scheme or an issue of sweat equity shares or bonus shares or depository receipts issued in a country outside India or foreign securities. Through preferential allotment of shares company can issue following type of shares / securities - Issuance of Equity shares, Issuance of Fully or partly convertible debentures, Issuance of any other securities convertible into equity shares.