_______ is the allotment of securities by a company to institutional investors and selected individuals.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Private Placement
Option (1) Private Placement — Correct. In a private placement the company does not go to the public at all. It sells its securities directly to institutional investors and some selected individuals. This raises money faster and costs less than a public issue.
Option (2) Offer for sale — Incorrect. Here the company sells the securities in one lot to brokers or issuing houses at an agreed price. They then resell them to the general public.
Option (3) Rights Issue — Incorrect. A rights issue is offered only to the existing shareholders, in proportion to the shares they already hold.
Option (4) e-IPOs — Incorrect. An e-IPO is a public issue made online through the stock exchange network. It is open to the public, not to selected investors.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. Financial Markets sat out the 2025 exam and walked straight back into 2026. The pre-rationalised book still has every line you need.
NCERT (Pre-rationalised Edition):
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