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

Tara Housing Ltd plans a red herring prospectus for a debt offer. After the offer closes, what must the company do under the Companies Act, 2013?

After the offer closes, the company must file a prospectus giving the total capital raised, whether debt or share capital, the closing price and any details missing from the red herring prospectus. Section 32(4) requires it to be filed with both the Registrar and SEBI.

  1. ANothing further, as the red herring prospectus suffices
  2. BFile only a statement with the stock exchange
  3. CFile a prospectus stating the total capital raised and closing price and other details not in the red herring prospectus, with the Registrar and SEBICorrect
  4. DFile the prospectus only with the Central Government

Explanation

Section 32(4) requires that on closing of the offer, a prospectus stating total capital raised, whether by debt or share capital, the closing price and other details not in the red herring prospectus be filed with the Registrar and SEBI. The red herring prospectus lacks complete particulars of quantum or price.

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