1. Private placement and preferential allotment difference.

Question

Accepted Answer

Private placement is for raising capital from a select group of investors, while preferential allotment is for issuing shares to a specific group of people.

Private placement is a method of raising capital by offering securities to a select group of investors, such as institutional investors or high net worth individuals.
Preferential allotment is the process of issuing shares to a specific group of people, such as promoters, employees, or existing shareholders.
Private placement can be done through a private placement memorandum, while preferential allotment requires approval from the board of directors and shareholders.
Private placement is governed by SEBI regulations, while preferential allotment is governed by the Companies Act, 2013.
Example of private placement: a company issuing bonds to a select group of institutional investors.
Example of preferential allotment: a company issuing shares to its promoters or employees.

1. Private placement and preferential allotment difference.

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