Private Placements in The Indian Capital Market - With Reference to the Companies Act, 2013

Abstract

Private placements are gradually becoming means of raising long term funds in the Indian capital market by both private and public companies. There after, an overview of the concept of private placement is given to enable a better appreciation of its unique role in raising funds for organizations that are not publicly quoted in a registered stock exchange. The changes in the provisions of the new Companies Act, 2013 in regards to private placement have been done keeping in mind, the investors' protection. Fixed timelines for share allotment and levy of interest on late refund of subscription money with interest are some good steps towards safeguarding investors' interests. The paper endeavour to present an overview of private placements as sources of long term funds in the Indian Capital Market. It also looks at the issues raise in the private placement procedure and the changes made in the new Companies Act, 213 with respect to old Companies Act, 1956.