CMA Intermediate · Financial Management and Business Data Analytics · Capital Market
Asha Textiles Ltd, a listed company, plans a public issue of 40,00,000 equity shares at an issue price of ₹150 per share. Under SEBI's rules for IPO allocation, at least 35% of the offer is reserved for retail individual investors in a book-built issue with the standard quota. How many shares must be reserved for retail investors at minimum, and what is the rupee value of that quota?
The retail quota is 35% of 40,00,000 shares, which equals 14,00,000 shares. At ₹150 per share this is ₹21,00,00,000. Other options use wrong percentages or misplace a decimal in the multiplication.
- A14,00,000 shares; ₹21,00,00,000Correct
- B14,00,000 shares; ₹2,10,00,000
- C16,00,000 shares; ₹24,00,00,000
- D12,00,000 shares; ₹18,00,00,000
Explanation
Retail quota = 35% × 40,00,000 = 14,00,000 shares. Value = 14,00,000 × ₹150 = ₹21,00,00,000. The ₹2,10,00,000 option misplaces a decimal; 16,00,000 would use 40%, and 12,00,000 uses 30%.
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