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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Equity and Procedural Aspects - Public Funding

Arjun Engineering Ltd sends a rights offer notice to its shareholders. Which statement about the offer period under Section 62(1)(a)(i) is correct as per the text of the Act?

The rights offer notice must limit a time of not less than fifteen days, or such lesser number of days as may be prescribed, and not more than thirty days from the date of the offer. If not accepted within that time, the offer is deemed declined.

  1. AThe offer must remain open for not less than fifteen days (or such lesser number of days as may be prescribed) and not more than thirty days from the date of the offerCorrect
  2. BThe offer must remain open for at least thirty days and not more than sixty days
  3. CThe offer must remain open for exactly fifteen days in every case
  4. DThe offer may remain open for any period decided by the Board

Explanation

The notice must specify the number of shares offered and limit a time of not less than fifteen days (or lesser days as prescribed) and not exceeding thirty days from the date of offer, after which a non-accepted offer is deemed declined. The thirty-to-sixty option misstates both limits.

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