Question

Difference between over subscription and under subscription of share

Answer 1

Answer:

Oversubscription means no. of shares applied is more than the shares offered for subscription. Undersubscription means no. of shares applied is less than the shares offered for subscription.

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Answer 2

Difference between Over-subscription and under-subscription is that in case of over subscription more shares are applied against the shares offered for subscription and if the applications received are less than the subscription offered.

Lets understand the difference in detail :

Explanation:

1. Shares application received : If the shares applications received are more than the shares offered  it is over-subscription and if it is less than the  shares offered for subscription then it is under- subscription.

2. Acceptance of the Share applications : Secondly In over-subscription all applications are not accepted some are rejected whereas in under-subscription  all the shares are allotted.

3. Return of amount :In case of Over-subscription it is possible that company has to return excess amount received due to over subscription but no such situation is there  in under subscription as it is already under subscribed.