In the case of listed companies, the Securities and Exchange Board of
India's DIP (disclosure and investor protection) and ICDR(Issue of
Capital and Disclosure Requirements) regulations currently, the said
company cannot issue bonus shares by capitalizing its revaluation
reserves.
The Question arises whether an unlisted company can do so.....Well, the guidance note issued by ICAI clearly states that the company cannot issue bonus shares out of reserve created by the revaluation of its assets.
However, in case of Bhagvati Developers Vs. Peerless General Finance & Investment Co, the SC held that a non listed company can do so....The enactment of companies bill addressed the issue and stated a company including non listed, cannot issue bonus shares by capitalizing its revaluation reserves.
This clarifies the situation of the Bonus Issue under IPO and Public Issue of Securities.
The Question arises whether an unlisted company can do so.....Well, the guidance note issued by ICAI clearly states that the company cannot issue bonus shares out of reserve created by the revaluation of its assets.
However, in case of Bhagvati Developers Vs. Peerless General Finance & Investment Co, the SC held that a non listed company can do so....The enactment of companies bill addressed the issue and stated a company including non listed, cannot issue bonus shares by capitalizing its revaluation reserves.
This clarifies the situation of the Bonus Issue under IPO and Public Issue of Securities.
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