Question

What is meant by Oversubscription of shares?

Answer 1

Wherein the public has subscribed to the shares of the company beyond the shares issued by the company, the shares are said to be oversubscribed. For example, a company has issued 100000 shares and invited the public to subscribe for its shares but the public has subscribed 120000 shares, this situation is called has oversubscription of shares.
The excess application received is treated by the following ways:
A. Reject the applications in full and refund the application money
B. Allot the shares in pro-rata basis. For example, 3:5 i.e. three shares are      allotted for every five shares issued.

Answer 2

Over subscription.

Explanation:

• It is the term in which the number of supplies becomes less than its demand.
• As in when the customer shows more interest in the new features and demands for more products.
• In this case, the supply gets less by increasing its demand, this term is called over subscription.
• It can affect the price of the issued product.
• The demands increase by the multiple of two.

Learn more about over subscription.

What is meant by Over subscription of shares?

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