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

Sundaram Textiles Ltd plans a public offer and wants to issue a document that does not include complete particulars of the quantum or price of the securities. Which type of document is this under the Companies Act, 2013?

It is a red herring prospectus. Under the Companies Act, 2013, a red herring prospectus is one that lacks complete particulars of the quantum or price of the securities. A shelf prospectus covers multiple issues over a period, so it does not fit this description.

  1. AShelf prospectus
  2. BRed herring prospectusCorrect
  3. CAbridged prospectus
  4. DInformation memorandum

Explanation

The Act defines a red herring prospectus as a prospectus that does not include complete particulars of the quantum or price of the securities. A shelf prospectus is for multiple issues over a period, and an information memorandum updates material changes under a shelf prospectus.

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