Way To Go, Jindal Worldwide

The company had entered the capital market during January 1996 with a public issue of 1,260,000 equity shares of Rs 10 each at a premium of Rs 105 per share.

On application, it had asked for Rs 28.75. The remaining portion of Rs 86.25 was to be paid in two parts Rs 28.75 on allotment and Rs 52.50 on final call.

However, the board has decided that the application money of Rs 28.75 would be treated as full payment towards the issue price of each share appropriating Rs 10 towards the share capital and Rs 18.75 towards the payment of share premium, cancelling the allotment money and final call money.

This move should improve the investor confidence in the company. Since the management has a 75 per cent stake, they could have forfeited the shares and re-issued them at a lower price to friends and relatives.

The investors in the company would have lost the entire amount of Rs 28.75. It should be noted that the promoters have not participated in the public issue. It must be noted here that the company was under no compulsion whatsoever to refund the money.

The partly-paid shares are thinly traded and hovering in the range of Rs 20-25. This should give an exit opportunity to investors in the company without any major loss.