2. Meaning
• A document through which public are solicited
to subscribe to the share capital of a corporate
entity
3. Prospectus for the public offer
• Regular prospectus
- Part I
- Part II
- Part III
4. Part I
a. General Information
- Name and address of the registered office
of the company
- Consent of the Central Govt for the
present issue
- Name of the regional stock exchanges and
other stock exchanges where application has
been made for listing of present issue
5. - Statement/declaration about refund of the
issue
- Declaration about the issue of allotment
letters/refunds
- Date of opening & closing of issue
- Name and address of the auditors & lead
managers
- Name and address of trustee
- Underwriting of the issue
6. Part I
b. Capital Structure
c. Terms of issue
d. Particulars of the issue – Information about
objects, project cost and means of financing
shall be specified
e. Company, Management & Project – History &
present business of the company, promoters,
managing director, location of project (details
of plant & machinery, technology)
7. Part I
f. Disclosure of public issue made by the
company
g. Disclosure of outstanding litigation, criminal
prosecution and defaults
h. Perception of risk factors
8. Part II
a. General Information
- consent of directors, auditors, advocates,
managers to issue, registrar of issue, bankers
to the company, bankers to the issue if any
obtained
- Authority for the issue
- Procedure & time schedule for allotment
and issue of certificates
9. - Name & address of the company
secretary, legal advisors, lead managers, co-
managers, auditors, bankers to the company &
issue, and brokers to issue
b. Financial Information
- Auditors report
- Chartered Accountant’s Report
10. Part II
c. Statutory & Other Information
- Minimum subscription
- Expenses of the issue (fees payable)
- Underwriting commission & brokerage
- Issue made previously for cash
- Previous public or rights issue, if any
(during last 5 years)
- Date of allotment, closing date, date of
refunds, date of listing on stock exchange
11. - Details of directors, proposed directors,
whole-time directors, their remuneration,
appointment & remuneration of managing
directors
12. Part III
• The requirement of this section of the
prospectus is that the report by the
accountants under Part II must be made by a
qualified practicing chartered accountant
• The time and place at which copies of all
balance sheets & P&L accounts, materials
contracts & documents, etc. to be inspected
should also be specified under part III
• Declaration
13. Abridged Prospectus
• Abridged Prospectus means the memorandum
as prescribed in Form 2A under sub-section (3)
of section 56 of the Companies Act, 1956. It
contains all the salient features of a
prospectus. It accompanies the application
form of public issues.
• 'Abridged Prospectus' is a shorter version of
the Prospectus and contains all the salient
features of a Prospectus.
14. Particulars of Abridged Prospectus
a. General Information – Name & address of
the stock exchange, opening & closing date
of the issue, name & address of the
registered office of the company
b. Capital structure
c. Terms of issue
d. Issue particulars
e. Company, Management & Project
16. Prospectus for rights issue
• Disclosures in prospectus
- An index
- Project cost
- Turnover
- Assets & Liabilities
- Major expansion
- Future projections
- Directors statement
17. Prospectus for rights issue
• Promoter definition
• Promoter group definition
• Promoters shareholdings
• Share price
• Agreements
• Management discussion & analysis
• Major shareholders
• Buy back
18. Prospectus for rights issue
• Qualified notes
• Information about ventures promoted
• Risk factors
• Tax benefits
• Basis for issue price
• Other disclosures
19. Deemed Prospectus
• When the offer is made through ISSUE
HOUSES , the document issued by them
should contain the requirements of
prospectus . the offer document is known as
deemed prospectus
20. Meaning
• According to section 64 of the companies Act,
deemed prospectus also known as ‘prospectus
by implication’ refers to the offer document
issued by the ‘Issue Houses’, which make an
invitation on behalf of the company to the
public to subscribe to the shares
21. Statement in lieu of prospectus
• An offer document may be considered to be a
‘Statement in lieu of prospectus’ under any of
the following circumstances
- Where a company could raise the necessary
capital without any public subscription
- Where a company could not make any
allotment on account of the minimum
subscription not being obtained
22. Red-herring Prospectus
• According to sub-sections (2), (3) and (4) of
section 60 B of the companies Act, 1956, “ A
prospectus which does not have complete
particulars on the price of securities offered &
quantum of securities offered is known as
Red-herring Prospectus”
• Such a prospectus is issued where a company
offers its securities through the ‘book-
building’ mode.
23. Features
• Filing – filed with RoC at least three days
before opening of issue
• Obligations – same as ordinary prospectus
• Contents – as per schedule II of companies act
• Signature – signed by all the directors
