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corporate actions · intermediate

Preferential allotment

Preferential allotment issues shares or convertibles to a select set of investors rather than the public at large.

SEBI ICDR rules govern pricing floors, lock-ins, and shareholder approval requirements.

Allottees can include promoters, strategic investors, or institutions.

Preferential deals can change control dynamics or shore up balance sheets quickly.

Lock-in periods restrict immediate sale of preferentially allotted securities.

Part of the Market Pulse Term of the Day series — factual market vocabulary, not investment advice.