Preferential Allotment
Content
Definition
A Preferential Allotment is a process by which shares are allotted to a select group of investors (often existing shareholders) at a predetermined price, usually at a discount to the market price.
Usage and Context
Preferential allotment issues shares to selected investors at a predetermined price.
Frequently asked questions
- What is a preferential allotment? Preferential allotment is issuing shares to a select group of investors at a predetermined price, usually at a discount.
- What do you mean by preferential shares? Preferential shares are equity shares with preferential rights over common shares, such as dividends and liquidation preference.
- What is a preferential offer? A preferential offer is the allocation of shares to a specific group of investors at a predetermined price, often at a discount.
Benefits
Preferential allotment issues shares to selected investors at a predetermined price, often to raise quick capital.
Conclusion
Preferential Allotment issues shares to selected investors at a predetermined price.
