Share allotment through private placement refers to the process by which a company offers its shares to a select group of investors or institutions in a private offering, rather than through a public offering. This process involves several steps:

1. Authorization: The company’s board of directors authorizes the issuance of shares through private placement, in accordance with applicable laws, regulations, and the company’s articles of association.
2. Approval: Depending on the jurisdiction and the company’s governing documents, approval may be required from regulatory authorities, shareholders, or other relevant stakeholders before proceeding with the private placement.
3. Determination of Terms: The company determines the terms and conditions of the private placement, including the number of shares to be issued, the price per share, the timing of the offering, and any other relevant terms.
4. Offering Memorandum: The company prepares an offering memorandum or private placement memorandum (PPM) containing detailed information about the offering, the company’s business, financials, risks, and other relevant disclosures. This document is provided to potential investors for their review.
5. Identification of Investors: The company identifies potential investors who may be interested in participating in the private placement. These investors may include institutional investors, high-net-worth individuals, venture capital firms, private equity funds, or other qualified entities.
6. Subscription Agreement: Interested investors enter into subscription agreements with the company, outlining the terms of their investment, including the number of shares to be purchased, the purchase price, and any other relevant terms and conditions.
7. Due Diligence: The company and the investors conduct due diligence on each other to assess the investment opportunity and ensure compliance with legal and regulatory requirements.
8. Securities Filings (if required): In some jurisdictions, the company may be required to file certain securities filings or notices with regulatory authorities in connection with the private placement.
9. Board Approval: Once all subscription agreements are executed, the company’s board of directors formally approves the allotment of shares to the investors.
10. Allotment of Shares: The company issues and allots the shares to the subscribing investors, in accordance with the terms of the subscription agreements and the offering memorandum.
11. Payment: Investors make the required payment for the allotted shares, either in full or in accordance with the agreed-upon payment schedule.
12. Share Certificates: The company issues share certificates or electronic statements of ownership to the investors as evidence of their ownership of the allotted shares.
13. Post-Allotment Compliance: The company ensures compliance with any post-allotment requirements, such as filings with regulatory authorities, updating its share register, and issuing share certificates to the investors.