Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Screen identified-person limits, offer documentation, banking channel, allotment timing and PAS filings for a private placement.
Screen private placement
Section 42 screen
—
Offeree headroom
—
Separate limits apply for each kind of security; rights, bonus, ESOP and qualified institutional routes differ.
How This Is Calculated
Private placement of securities under Section 42 is capped at 200 persons in a financial year (excluding QIBs and ESOP allottees) per offer/invitation — exceeding this count converts the offer into a deemed public offer, triggering significantly more onerous public-issue compliance requirements.
Frequently Asked Questions
What is the maximum number of persons in a private placement offer?
▼
200 persons in a financial year, excluding Qualified Institutional Buyers (QIBs) and employees receiving securities under an ESOP — this cap applies per offer, and the count resets each financial year.
What happens if the 200-person limit is exceeded?
▼
The offer is deemed to be a public offer, which triggers the much more extensive compliance requirements applicable to public issues — including prospectus requirements — that private placement was specifically designed to avoid.
Scope: Checks compliance requirements for a private placement of securities under Section 42 of the Companies Act, 2013, including the offer-recipient limit and the separate-bank-account requirement.
Calculation logic
Check the offer-recipient limit: a private placement offer cannot be made to more than 200 persons in aggregate in a financial year (excluding qualified institutional buyers and employees under an ESOP scheme, per the specific exclusions) — exceeding this limit converts the offer into a deemed public offer, triggering full public-issue compliance instead.
Check the separate-bank-account requirement: application money received for a private placement must be kept in a separate bank account with a scheduled bank and can only be used for allotment of securities or repayment of the money if allotment is not made, per the specific fund-segregation rule.
Check the allotment timeline: securities must be allotted within 60 days of receipt of application money, failing which the company must repay the application money within 15 days of the 60-day expiry (with interest for further delay), per the current provision.
Inputs and assumptions
200-person limit, 60-day allotment window, and the separate-bank-account requirement follow the current Section 42 provisions and the Companies (Prospectus and Allotment of Securities) Rules.
A private placement offer must be made only to persons whose names are recorded by the company prior to the invitation (via a private placement offer letter, Form PAS-4), and each such offer requires a corresponding return of allotment (Form PAS-3) filing — the checker flags these procedural preconditions.
Exclusions and edge cases
No fresh private placement offer can be made unless allotments for all earlier offers have been completed or the earlier offer has been withdrawn/abandoned — a specific sequencing rule the checker flags where the user indicates a prior pending offer.
Does not itself file PAS-3/PAS-4 forms — this checker addresses compliance-condition applicability, with actual filing completed separately on the MCA portal.