Scribd
Upload
27 views20 pages

Corp Accounting

The document discusses underwriting, which is an agreement where underwriters agree to take up unsubscribed shares or debentures of a company for a commission. It outlines SEBI regulations for underwriters, including that only brokers/merchants can underwrite and disclosures required. Underwriting commission rates by law are up to 5% of issue price for shares and 2.5% for debentures. The types and advantages of underwriting are described, including ensuring issue success and relieving the company's burden to obtain capital. Underwriters' liability is also mentioned.

Uploaded by

sarath cm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
27 views20 pages

Corp Accounting

The document discusses underwriting, which is an agreement where underwriters agree to take up unsubscribed shares or debentures of a company for a commission. It outlines SEBI regulations for underwriters, including that only brokers/merchants can underwrite and disclosures required. Underwriting commission rates by law are up to 5% of issue price for shares and 2.5% for debentures. The types and advantages of underwriting are described, including ensuring issue success and relieving the company's burden to obtain capital. Underwriters' liability is also mentioned.

Uploaded by

sarath cm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 20

TITLE LOREM

IPSUM
Sit Dolor Amet
Title Lorem Ipsum

LOREM IPSUM DOLOR SIT AMET, NUNC VIVERRA IMPERDIET PELLENTESQUE HABITANT
CONSECTETUER ADIPISCING ENIM. FUSCE EST. VIVAMUS A MORBI TRISTIQUE SENECTUS ET
ELIT. TELLUS. NETUS.
Meaning - underwriting

◦ Underwriting is an agreement,under which one or more


persons or institutions called underwriter or
underwriters, agree to take up the whole or certain
portion of a company's un subscribed shares or
debentures, for certain remuneration called
commission.
SEBI Regulations regarding Underwriting
◦ No person other than a share broker or merchant banker can act as underwriter unless he holds a certificate granted by SEBI.
◦ The following disclosures should made in the offer document :
1. Name and address of the underwriters and the amount underwritten by them.
2. Declaration by the board of directors ( BOD) of the issuer company that the underwriters have sufficient resources to
discharge their respective obligations.
Underwriting commission
◦ Meaning of underwriting Commission.
◦ The underwriters are entitled to some consideration for the risk they undertake in underwriting the shares or debentures of a
public company.

◦ In the words, the consideration payable to the underwriters for underwriting the shares and debentures is called the
underwriting commission
RATES OF UNDERWRITING COMMISSION
◦ As per Companies Act 2013, the underwriter’s commission should not be more than 5% of the issue price of shares and 2.5%
of the issue price of debentures.

◦ As per the guidelines issued by the Ministry of Finance, the following rates are to be followed:
◦ On the issue of shares – 2.5%
◦ On the issue of debentures:
1. Upto 500000 – 2.5%
2. Excess to Rs. 500000 – 2%
Meaning of underwriters

◦ The underwriters may be individuals, partnership


firms, joint stock companies, banks and financial
institutions. Ex : ICICI, SFC’s, LIC etc.,
Advantages of underwriting
◦ 1. UNDERWRITING ENSURE THE SUCCESS OF THE PROPOSED ISSUE OF SHARES.
◦ UNDERWRITING HELPS A COMPANY TO GET A MINIMUM SUBSCRIPTION
◦ WITH AN UNDERWRITING AGREEMENT, A COMPANY NEED NOT BOTHER ABOUT MONEY MARKET
CONDITIONS.
◦ WHEN AN UNDERWRITING AGREEMENT EXISTS, A COMPANY IS RELIEVED OF THE BURDEN OBTAINING
THE REQUIRED CAPITAL
TYPES OF UNDERWRITING
MARKED AND UNMARKED
APPLICATIONS
LIABILITY OF UNDERWRITERS

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy