Equity Share & Share Capital – Practice Test 3

This practice test focuses on issue of shares, allotment, calls, forfeiture, transfer, and related capital provisions under company law.

Equity Share & Share Capital- Practice Test 3

1 / 50

An issuer shall be eligible to make an initial public offer only of it has net tangible assets of ______

At least 3 crore rupees

At least 1 crore rupees

At least 4 crore rupees

At least 2 crore rupees

2 / 50

The entire pre-issue capital of the shareholders shall be locked-in for a period of _____ from the date of allotment in case of listing pursuant to a public issue or date of listing to case of listing without a public issue

9 months

12 months

3 months

6 months

3 / 50

A rights issue of IDR shall be open for subscription in India for a period as applicable under the laws of its home country but in no case less than

8 days

4 days

10 days

6 days

4 / 50

An issuer shall be eligible to issue warrants in an IPO subject to the condition that the tenure of such warrant shall ____ from their date of allotment in the initial public offer

Not exceed 15 months

Not exceed 12 months

Not exceed 21 months

Not exceed 18 months

5 / 50

If the issuer makes a public issue through the book building process

Where the issue is required to be underwritten, the underwritten obligations should at least to the extent of minimum subscription

The issue shall be underwritten by lead manager(s) and syndicate member(s)

The lead manager(s) and the syndicate member(s) shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations

All of the above

6 / 50

The floor price or the final price of IDR

Shall equal to the face value of the IDRs

May be less than the face value of the IDRs

Shall not be less than the face value of the IDRs

Shall less than the face value of the IDRs

7 / 50

“ Green shoe option” means an option of allotting equity shares ______ the equity shares offered in the public issue as a post-listing price stabilizing mechanism

Equal to

Less than

In excess of

None of the above

8 / 50

An initial public offer shall be kept open for ______ and not mote than ten working days

At least three working days

Three days

At the discretion of the issuer

At least three days

9 / 50

The minimum sum payable on application per specified security shall be

At least twenty five per cent of the issue price

At least fifteen per cent of the issue price

At least thirty per cent of the issue price

At least twenty per cent of the issue price

10 / 50

The promoters holding in excess of minimum promoters contribution shall be locked-in for a period of

Two years

Three years

One year

Six months

11 / 50

The issuer shall not make an allotment pursuant to a public issue if the number of allottees in an initial public offer is

Less than fifty

More than fifty

Fifty only

None of the above

12 / 50

In case of SME Enterprises, an issuer shall be eligible to make an initial public offer only if its post-issue paid-up capital is less than or equal to

Eight crore rupees

Four crore rupees

Ten crore rupees

Six crore rupees

13 / 50

An announcement regarding closure of the issue shall be made only after the lead manager(s) is satisfied that at least ______ of the issue has been subscribed and a certificate has been obtained to that effect from the Registrar to the issue.

75%

85%

90%

95%

14 / 50

For non-underwritten issues, if the issuer fails to refund the entire subscription amount within 15 days from the date of the closure of the issue, it is liable to pay the amount with interest to the subscribers at the rate of ___________ for the period of delay.

21% p.a.

15% p.a.

24 % p.a.

18% p.a.

15 / 50

For making a rights issue so the fast track route the equity shares of the issuer have been listed on any stock exchange for a period of ________ immediately preceding the reference date.

At least one year

Three years

At least three years

At least two years

16 / 50

Where the securities are not allotted and/or application monies are not refunded or unblocked within the prescribed period, the issuers shall undertake to pay interest at the rate of ________ to the investors.

6% per annum

15% per annum

18% per annum

12% per annum

17 / 50

Only such fully paid up equity shares may be offered for sale to the public, which have been held by the sellers for _______ prior to the filing of the draft of offer document.

A period of at least one year

A period of one year

A period of at least two years

A period of two years

18 / 50

‘Relevant date’ in case of preferential issue of equity shares, means the __________ on which the meeting of shareholders is held to consider the proposed preferential issue.

Date 30 days prior to the date

Date 10 days prior to the date

Date 40 days prior to the date

Date 20 days prior to the date

19 / 50

‘Anchor Investor’ means a qualified institutional buyer who makes an application for a value of _______ in a public issue on the main Board through the book building process.

At least five crore rupees

At least one crore rupees

At least ten crore rupees

At least two crore rupees

20 / 50

The draft offer document filed with the Board shall be made public for comments, if any, for a period of

At least 7 days from the date of filing

At least 21 days from the date of filing

At least 14 days from the date of filing

At least 28 days from the date of filing

21 / 50

An issuer shall be eligible to issue warrants in an initial public offer subject to condition that the tenure of such warrants ________ from the date of their allotment in the initial public offer.

Shall not exceed 18 months

Shall not exceed 6 months

Shall not exceed 24 months

Shall not exceed 12 months

22 / 50

An issuer shall be eligible to make an initial public offer only if it has a net worth of ________ in each of the preceding three full years.

At least two crore rupees

At least four crore rupees

At least one crore rupees

At least three crore rupees

23 / 50

In case of book built issue, the price of the specified securities offered to the anchor investor _______

Shall not be lower than the price offered to other applicants

Shall be lower than the price offered to other applicants

Shall be more than the price offered to other applicants

None of the above

24 / 50

The issuer shall ensure that all transactions in securities by the promoter and promoter group between the date of filing of the draft offer document or offer document, as the case may be, and the date of closure of the issue shall be reported to the stock exchange(s) _______ of such transactions

Within 12 hours

After 24 hours

After 12 hours

Within 24 hours

25 / 50

The minimum subscription to be received in the issue shall be ________ of the offer through the offer document, except in case of an offer for sale of specified securities.

95%

At least 90%

At least 95%

90%

26 / 50

In the case of a revision in the price band, the issuer shall extend the bidding (issue) period disclosed in the red herring prospectus_______

For a minimum period of 3 working days

For a minimum period of one working day

For a minimum period of two working days

None of the above

27 / 50

The entire pre-issue capital held by persons offer than the promoters shall be locked in for a period of ______ from the date of allotment in the initial public offer.

One year

Three years

Six months

Two years

28 / 50

The issuer shall, before the opening of the subscription list, deposit with the designated stock exchange, an amount calculated at the rate of ________ of the issue size available for subscription to the public.

29 / 50

‘Book Buildings’ means

A process undertaken to fix price based on demand of shares in the market

A process undertaken to elicit demand and to assess the price for determination of the quantum or value or coupon up specified securities

A process through which the public is able to determine the price of share

None of the above

30 / 50

An issuer shall be eligible to issue fully convertible debt instruments for financing or for providing loans to or for acquiring shares of any person who is part of the promoter group or group companies if the period of conversion of such debt instruments is __________ from the date of issue of such debt instruments.

Less than 18 months

Less than 12 months

Less than 21 months

Less than 15 months

31 / 50

The issuer shall stipulate in the offer document the minimum application size in terms of number of specified securities which shall fall within the range of

Minimum application value of Rs.10,000/- to Rs.15,000/-

Minimum application value of Rs.1,000/- to Rs.5,000/-

Minimum application value of Rs.5,000/- to Rs.10,000/-

At the discretion of the issuer

32 / 50

‘Composite issue’ means

An issue of specified securities by a listed issuer on bonus –cum- rights basis simultaneously.

An issue of specified securities by a listed issuer on public –cum- preferential allotment basis simultaneously.

An issue of specified securities by a listed issuer on public –cum- rights basis simultaneously.

An issue of specified securities by a listed issuer on public –cum- private placement basis simultaneously

33 / 50

Can a issuer make an initial public offer of convertible debt instruments even without making a prior public issue of its equity share and listing thereof?

Yes, provided it is not in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than 6 months

Yes, it can issue and there is no condition

No, it cannot issue

None of the above

34 / 50

An issuer shall be eligible to make a further public offer of convertible debt instruments if

It has not defaulted in payment of interest or repayment of principle amount in respect of debt instruments issued by it to the public, if any, for a period of more than 6 months.

Its equity shares are already listed

Both (A) and (B) are correct

None of the above

35 / 50

The equity share issued on preferential basis pursuant to any resolution of stressed assets under a frame work specified by the Reserve Bank of India or a Resolution Plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 shall be locked in for __________ from the trading approval.

A period of 4 years

A period of 2 years

A period of 3 years

A period of 1 year

36 / 50

An issuer seeking listing of its specified securities without making a public offer, shall file a draft information document along with the necessary documents with the Board in accordance with this regulation along with the fee as specified in ________ of these regulations.

Schedule-III

Schedule-I

Schedule-IV

Schedule-II

37 / 50

A listed issuer whose post-issue face value capital is less than ______ may migrate its specified securities to SME exchange if its shareholders approve such migration by passing a special resolution through postal ballot to this effect and if such issuer fulfils the eligibility criteria for listing laid down by the SME exchange

30 crore rupees

20 crore rupees

35 crore rupees

25 crore rupees

38 / 50

The requirements of minimum promoters contribution shall not apply in case of an issuer

Which does not have any identifiable promoter

Which have any identifiable promoter

Which is well known promoter

None of the above

39 / 50

A listed issuer making a preferential issue of specified securities shall ensure that

A special resolution has been passed by its shareholder

All equity shares held by the proposed allottees in the issuer are in dematerialised form

All equity shares allotted by way of preferential issue shall be made fully paid up at the time of the allotment

All of the above

40 / 50

A public issue shall be kept open for

At least 6 working days and not more than 10 working days

At least 4 working days and not more than 10 working days

At least 3 working days and not more than 10 working days

At least 5 working days and not more than 10 working days

41 / 50

The amount for general corporate purpose, as mentioned in objects of the issue in the draft letter of offer and the letter of offer

Shall not exceed twenty-five per cent of the amount raised by the issuer

May exceed twenty-five per cent of the amount raised by the issuer

Shall not exceed twenty per cent of the amount raised by the issuer

None of the above

42 / 50

An issuer making an initial public offer of specified securities shall satisfy the conditions of Chapter II of ICDR Regulation

As on the date of filling the offer document with the Registrar of Companies

As on the date of filling of the draft offer document with the Board

Both A and B

None of the above

43 / 50

For making a rights issue through the fast track route the annualized delivery based trading turnover of the equity shares during six calendar months immediately preceding the month of the reference date has been based of the annualized trading turn over equity during such six months period.

More than 10%

10%

At least 10%

None of the above

44 / 50

The Lead Managers shall submit a final post-issue report as specified in part-A of schedule XVII, along with a due diligence certificate as per the format specified in Form-F of schedule-V, _________ of the date of finalization of basis of allotment or within 7 days of refund of money in case of failure of issue.

Within 7 working days

Within 3 days

Within 3 working days

Within 7 days

45 / 50

In the issue size, excluding the size of offer for sale by selling shareholders, ___________ the issuer shall make arrangements for the use of proceeds of the issue to be monitored by a public financial institution or by a scheduled commercial bank named in the offer document as bankers of the issuer.

Exceeds 75 crore rupees

Exceeds 25 crore rupees

Exceeds 100 crore rupees

Exceeds 50 rupees

46 / 50

In case the issuer fails to obtain listing or trading permission from the stock exchange where the specified securities were to be listed, it shall refund through verifiable means the entire monies received ________ of receipt of innovation of stock exchange rejecting the application for listing of specified securities.

Within 7 days

Within 3 days

Within 7 working days

Within 3 working days

47 / 50

The board may exempt any person or class of persons from the operation of all or any of the provisions of these regulations for a period as may be specified but not exceeding ______, for furthering innovation in technological aspect relating to testing new products, process, services, business models etc. in live environment or regulatory sandbox in the securities markets.

Nine months

Three months

Twelve months

Six months

48 / 50

The tenure of the convertible or exchangeable eligible securities issued through qualified institutions placement

Shall not exceed 45 months from the date of allotment

Shall not exceed 60 months from the date of allotment

Shall not exceed 30 months from the date of allotment

Shall not exceed 15 months from the date of allotment

49 / 50

The issuer making a rights issue of specified securities shall ensure that

It has net firm arrangement of finance through verifiable means towards 75% of this stated means of finance for the specific project proposed to be founded from issue proceeds, excluding the amount to be raised through the proposed rights issue or through existing identifiable internal accruals.

It has made an application to one or more stock exchange to seek an in-principle approval for listing

All its existing partly paid up equity shares have either been fully paid up or have been forfeited.

All of the above

50 / 50

In which circumstance an issuer shall be eligible to make an initial public offer.

If the issuer or any of its promoters or directors is a wilful defaulter

If the issuer, any of its promoters, promoter group or directors or selling shareholders are debarred from assessing the capital market by the Board.

If any of the promoters or directors of the issuers is a promoter or director of any other company, which is debarred from assessing the capital market by the Board.

If any of its promoters or directors is not a fugitive economic offender.

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