Answer the Question based on following case study.

Mr. Raj is working as finance Manager is Amaira Company. Company has a capital Base of ₹50 lacs of Equity shares of ₹100 each. Now Company wants to enter into a new project for which it requires capital of ₹40 lacs. There are two options available to him.First to invite subscription from public through issue of prospectus and second to go for long term borrowing by issuing debentures. But Issue of debentures will not be suitable as the rate of return of company is less than Interest Rate of debentures. So the final decision was to issue Equity shares.

Under which of the following method company invite subscription from the public through issue of prospectus ?

Offer through prospectus

The correct answer is option (4) : Offer through prospectus

The method in which a company invites subscriptions from the public through the issue of a prospectus is "4. Offer through prospectus." In this method, the company provides a detailed prospectus to potential investors, outlining the terms and conditions of the securities being offered and inviting them to subscribe to the securities by following the instructions in the prospectus.

1. Private Placement: Private placement is a method of raising capital in which a company sells its securities directly to a select group of private investors, such as institutions or accredited investors, rather than offering them to the general public

2. Offer for Sale: In an offer for sale, the company's existing shareholders, such as promoters or large investors, sell their shares directly to the public. This method allows existing shareholders to sell their holdings and does not involve the issuance of new shares by the company itself.

3. E-IPO (Electronic Initial Public Offering): E-IPO refers to the process of conducting an initial public offering (IPO) electronically, often through online platforms and digital channels.

Offer through prospectus (Option 4) is a traditional method used to invite subscriptions from the public by providing detailed information about the company, the terms of the offering, and the securities being offered. It is a standard approach for companies going public and offering shares to the public for the first time. Other methods, such as private placement and offer for sale, cater to specific scenarios and investor groups, and E-IPO introduces technology into the IPO process.