"Yuvaan Ltd.", a reputed industrial machines manufacturer, needs twenty crores as additional capital to expand the business. Mr. Karan Rastogi, the Chief Executive Officer (CEO) of the company wants to raise funds through equity. The Finance Manager, Mr. Lokesh Nayyar, suggested that the shares may be sold to investing public through intermediaries, as the same will be less expensive. Name the method through which the company decided to raise additional capital.
"Yuvaan Ltd.", a reputed industrial machines manufacturer, needs twenty crores as additional capital to expand the business. Mr. Karan Rastogi, the Chief Executive Officer (CEO) of the company wants to raise funds through equity. The Finance Manager, Mr. Lokesh Nayyar, suggested that the shares may be sold to investing public through intermediaries, as the same will be less expensive. Name the method through which the company decided to raise additional capital.
Solution
Under offer for sale, securities are not issued directly to the public by the company but are offered through intermediaries such as issuing houses or stock brokers, who then resell them to the investing public. Since Yuvaan Ltd. decided to sell shares to the public through intermediaries to reduce cost, the method is Offer for Sale.
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