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CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements

Arjun Infra Ltd has filed a shelf prospectus and made its first offer. Before a second offer under the same shelf prospectus, what must it do?

The company must file an information memorandum with the Registrar before the second or subsequent offer. It must contain all material facts about new charges created and changes in financial position since the previous offer. No fresh prospectus is required during the shelf prospectus validity.

  1. AFile a fresh full prospectus with the Registrar
  2. BFile an information memorandum with material facts on new charges and changes in financial position since the previous offerCorrect
  3. CDo nothing, since no further document is required
  4. DFile a red herring prospectus with SEBI only

Explanation

No further prospectus is needed for later offers in the validity period, but the company must file an information memorandum with the Registrar on new charges and financial changes before the second or subsequent offer. Saying nothing is required ignores this duty.

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