Preferential Allotment

Definition

A Preferential Allotment is a process by which shares are allotted to a select group of investors (often existing shareholders) at a predetermined price, usually at a discount to the market price.

Usage and Context

Preferential allotment issues shares to selected investors at a predetermined price.

Frequently Asked Questions

What is a preferential allotment?
Preferential allotment is issuing shares to a select group of investors at a predetermined price, usually at a discount.

What do you mean by preferential shares?
Preferential shares are equity shares with preferential rights over common shares, such as dividends and liquidation preference.

What is a preferential offer?
A preferential offer is the allocation of shares to a specific group of investors at a predetermined price, often at a discount.

Benefits

Preferential allotment issues shares to selected investors at a predetermined price, often to raise quick capital.

Conclusion

Preferential Allotment issues shares to selected investors at a predetermined price.