An issue of shares made by the company to the public in general for subscription is called :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Initial Public Offer
A company raises share capital in two ways: from a select group of persons by private placement, or by offering the shares to the public for subscription. When a company offers its shares to the general public for the first time, the issue is called an Initial Public Offer (IPO).
Option (1) Private placement of shares — Incorrect. A private placement is an offer to a select group of persons, not to the public in general.
Option (3) ESOP — Incorrect. An Employees Stock Option Plan offers shares only to the employees and employee directors of the company.
Option (4) Sweat Equity Shares — Incorrect. Sweat equity shares are issued to employees or directors for their know-how or services, not offered to the public.
NCERT (2026-27 edition): |