Under Securities and Exchange Board of India (SEBI) regulations, the minimum subscription requirement mandates that at least 90% of the issued capital must be subscribed by the public for an initial public offering or rights issue. Failure to achieve this 90% subscription threshold renders the issue unsuccessful, necessitating the refund of all collected funds to applicants.
| Capital Type | Description |
|---|---|
| Authorised Capital | The maximum capital a company is permitted to issue as per its foundational documents. |
| Issued Capital | The segment of authorised capital made available to investors for subscription. |
| Reserve Capital | A component of a company's uncalled share capital, callable exclusively upon the company's liquidation. |
| Subscribed Capital | The portion of the issued capital that has been taken up by the public. |
The stipulated minimum subscription for capital must not fall below 90% of the Issued capital.
| List - I | List - II |
|---|---|
| (A) Authorised Capital | (II) Maximum amount of share capital a company could raise during its lifetime |
| (B) Reserve Capital | (I) A portion of uncalled share capital will be called at the time of winding up |
| (C) Issued Capital | (III) Capital issued to public for subscription |
| (D) Subscribed but not fully paid capital | (IV) Amount called up and received but not fully paid |