Explain briefly the procedure for allotment of shares.

Answer: Allotment is the acceptance by the company of the offer (application) made by an applicant to buy its shares. The procedure is:

1. Receipt of applications: Application money is received through bankers to the issue (ASBA, where the amount is only blocked in the applicant's bank account) and kept in a separate bank account; it cannot be used until allotment.
2. Minimum subscription: The company must receive the minimum subscription stated in the prospectus (90% of the issue as per SEBI). If it is not received within the prescribed period, all application money must be refunded.
3. Listing permission: The company must have applied to one or more recognised stock exchanges for listing before the issue.
4. Basis of allotment: If the issue is oversubscribed, the basis of allotment (proportionate allotment, lottery for small applicants, etc.) is finalised in consultation with the designated stock exchange.
5. Board resolution: The Board of Directors (or its allotment committee) passes a resolution allotting the shares as per the approved basis.
6. Letters of allotment and regret: Allottees are informed by allotment advice; applicants who get no shares receive a letter of regret and their money is refunded or unblocked within the prescribed time.
7. Credit of shares: Shares are credited to the demat accounts of allottees (or share certificates are issued within two months of allotment where shares are in physical form).
8. Return of allotment: A return of allotment in Form PAS-3 is filed with the Registrar of Companies within 30 days of allotment.
9. Entries in registers: Names of allottees are entered in the Register of Members, and the shares are then listed and traded on the stock exchange.