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CS Executive · Capital Market and Securities Laws · Issue and Listing of Non-Convertible Securities

Meera Infra Ltd proposes to make a public offer of debt securities and wants to issue a red herring prospectus first. Under Section 32 of the Companies Act, 2013, what is the rule on its filing?

A red herring prospectus must be filed with the Registrar at least three days before the subscription list and the offer open. The final prospectus with total capital raised and closing price is filed only after the offer closes, so closing-day filing is incorrect.

  1. AIt must be filed with the Registrar at least three days before the subscription list opensCorrect
  2. BIt must be filed with the Registrar on the day the offer closes
  3. CIt need not be filed with anyone before the final prospectus
  4. DIt must be filed with the Registrar at least thirty days before the offer opens

Explanation

Section 32(2) requires a company issuing a red herring prospectus to file it with the Registrar at least three days before the opening of the subscription list and the offer. The final prospectus is filed after closing. Option B is wrong because filing on closing day is the timing for the prospectus, not the red herring document.

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