NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market
A company issues 10,00,000 equity shares through a fixed price public issue at ₹120 per share, face value ₹10. Issue expenses are ignored. What is the total amount of securities premium collected?
Securities premium is ₹11,00,00,000. Each share is issued at ₹120 against a face value of ₹10, giving a premium of ₹110 per share, and multiplying by 10,00,000 shares gives ₹11 crore. The ₹1 crore is share capital, and ₹12 crore is the total proceeds.
- A₹11,00,00,000Correct
- B₹1,00,00,000
- C₹12,00,00,000
- D₹10,00,00,000
Explanation
Premium per share = 120 - 10 = ₹110. Total premium = 10,00,000 x 110 = ₹11,00,00,000. Check: total raised ₹12 crore less face value capital ₹1 crore = ₹11 crore. ₹1 crore is only the face value capital and ₹12 crore is the total raised.
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