Consider the following statements about an e-IPO:
(A) Under an e-IPO, the issuer company has to enter into an agreement with the stock exchange.
(B) Under an e-IPO, SEBI registered brokers have to be appointed for accepting applications and placing orders with the company.
(C) Under an e-IPO, the registrar to the issue coordinates all the activities amongst the intermediaries connected with the issue.
(D) Under an e-IPO, the issuer company should appoint a lead manager having electronic connectivity with the exchange.
(E) Under an e-IPO, the issuer company can apply for listing on any exchange other than the one through which it offered its securities.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (B) and (E) only
(A) Under an e-IPO, the issuer company has to enter into an agreement with the stock exchange. — Correct. The issue goes through the exchange’s on-line system, so the company must sign an agreement with the exchange.
(B) Under an e-IPO, SEBI registered brokers have to be appointed for accepting applications and placing orders with the company. — Correct. These brokers collect the applications and place the orders.
(C) Under an e-IPO, the registrar to the issue coordinates all the activities amongst the intermediaries connected with the issue. — Incorrect. The roles are swapped. It is the lead manager who coordinates the intermediaries.
(D) Under an e-IPO, the issuer company should appoint a lead manager having electronic connectivity with the exchange. — Incorrect. It is the registrar to the issue who must have electronic connectivity with the exchange.
(E) Under an e-IPO, the issuer company can apply for listing on any exchange other than the one through which it offered its securities. — Correct. The company is free to list on another exchange as well.
NCERT (Pre-rationalised Edition): NCERT (Pre-rationalised Edition): “4. Rights Issue 5. e-IPOs: A company proposing to issue capital to the public through the on-line system of the stock exchange has to enter into an agreement with the”
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