20 :- Faber Ltd. invited applications for 70,000 equity shares of Rs 100 each. The application money received @ Rs 30 per share was Rs 27,00,000. Name the kind of subscription. List the three alternatives for alloting these shares.
Solution :-
As actual money of the application is (70,000 x 3) Rs 21,00,000 and on Application, there are Rs 27,00,000 is received. Thus It is the case of over-subscription.
1. The excess money over application Rs 6,00,000 can be returned
2. The excess money over application Rs 6,00,000 can be adjusted on allotment.
3. A part of the excess money over application can be returned and rest can be adjusted in allotment money.