Read the following case study, answer the question:

Raja Pvt Ltd. has been operating in the field of Oils and Food items for last 10 years. Established in South India, has started its operations in some parts of Gujarat as well. Looking at growing demand and production the company wants to raise its Capital through an IPO to expand its operations in North India as well. The company was started in the year 2009 with only 3 members and now had 5 members and 20,000 employees. It was decided to convert the company into Public Ltd. Company. The Memorandum of Association of the company provides for ₹60,00,000 of Capital out of which the company issues ₹40,00,000 of share capital (40,000 equity shares of ₹100 each). The shares were issued at a premium of ₹20 but the company was able to get subscription of only 38,000 shares. Amount is paybale as follows ₹10 on application, ₹50 on allotment and Two calls of ₹20 each. Premium amount is to be received on allotment. The company was able to receive all money on all the shares except on 200 shares on I^st call and 300 share final call was not received. The company forfeited the shares of those who did not pay I^st call.

The capital of ₹40,00,000 that the company is raising through IPO is ___________

Issued Capital

The correct answer is Option (1) - Issued Capital.

Issued Capitalis that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company’s memorandum. The authorised capital which is not offered for public subscription is known as ‘unissued capital’. Unissued capital may be offered for public subscription at a later date.

Here, the company issued capital of ₹40,00,000 to public through IPO. So, it is issued capital.