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

Rohan Housing Ltd files a red herring prospectus for an offer of debt securities. After the offer closes, which of the following must it do under the Companies Act, 2013?

After the offer closes, the company must file a prospectus giving the total capital raised by debt or share capital, the closing price and other details missing from the red herring prospectus. It must be filed with both the Registrar and SEBI, under section 32(4).

  1. ANothing further, because the red herring prospectus replaces the prospectus entirely
  2. BFile a prospectus stating the total capital raised, whether by debt or share capital, the closing price of the securities and other details not in the red herring prospectus, with the Registrar and SEBICorrect
  3. CFile the prospectus with the Registrar only, since SEBI is not entitled to receive it
  4. DFile the prospectus with the Registrar three days before opening of the subscription list instead of the red herring prospectus

Explanation

Section 32(4) requires that on closing of the offer, the prospectus stating the total capital raised (debt or share capital), the closing price and any other details not included in the red herring prospectus be filed with the Registrar and SEBI. Option D confuses this with section 32(2), which concerns filing the red herring prospectus at least three days before the subscription list opens. Option C omits SEBI.

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