UPSC Prelims Practice Questions — PVV Infra board okays preferential share issue

Q1. With reference to warrants issued on a preferential basis under the SEBI (ICDR) Regulations, 2018, consider the following statements: Which of the statements given above is/are correct?

  1. The tenure of such warrants shall not exceed 18 months from the date of their allotment.
  2. At least 25 per cent of the consideration for the warrants shall be received upfront on allotment, with the balance payable on exercise.
  3. Instruments allotted on a preferential basis to the promoter group are, in every case, locked in for five years from the date of allotment.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. With reference to preferential issues under the SEBI (ICDR) Regulations, 2018, consider the following statements: Which of the statements given above is/are NOT correct?

  1. The 'relevant date' for pricing a preferential issue of equity shares is the date 30 days prior to the general meeting of shareholders.
  2. Warrants issued preferentially must be converted into equity shares within 18 months of their allotment.
  3. Instruments preferentially allotted to the promoter group are subject to a lock-in of three years from allotment.
  4. A preferential allotment can be made only to Qualified Institutional Buyers.
  • A. 1 and 2
  • B. 2 and 3
  • C. 4 only
  • D. 1 and 4

Q3. With reference to the categories of share capital under the Companies Act, 2013, consider the following statements: Which of the statements given above is NOT correct?

  1. Authorised (nominal) capital is the maximum amount of share capital authorised by the memorandum of the company.
  2. Issued capital is that part of the authorised capital which the company issues for subscription.
  3. Subscribed capital is that part of the issued capital which has been taken up by subscribers.
  4. The paid-up capital of a company is always equal to its authorised capital.
  • A. 4 only
  • B. 1 and 2
  • C. 3 only
  • D. 2 and 4

Q4. The following pairs relate a category of share capital with its meaning under the Companies Act, 2013. Which of the pairs given above is/are correctly matched?

  1. Authorised capital — the maximum share capital a company is permitted by its memorandum to issue.
  2. Issued capital — the portion of authorised capital offered to investors for subscription.
  3. Paid-up capital — the total face value of shares the company is legally permitted to issue.
  4. Subscribed capital — that part of the issued capital which investors have agreed to take up.
  • A. 1, 2 and 4
  • B. 1 and 3
  • C. 2, 3 and 4
  • D. 3 and 4

Q5. The issue of convertible equity share warrants on a preferential basis by a listed company is regulated primarily under regulations framed by which one of the following?

  • A. Reserve Bank of India
  • B. Securities and Exchange Board of India
  • C. Ministry of Corporate Affairs
  • D. Insurance Regulatory and Development Authority of India

Q6. With reference to the features of securities issued by companies, consider the following statements: Which of the statements given above is/are correct?

  1. A warrant does not carry voting rights at the time of its issuance.
  2. A debenture represents a debt of the company, its holder being a creditor rather than an owner.
  3. An equity share carries voting rights and represents ownership in the company.
  4. A convertible warrant requires the full exercise price to be paid upfront at the time of allotment.
  • A. 1, 2 and 3
  • B. 1 and 4
  • C. 2, 3 and 4
  • D. 3 only

Q7. Under the Companies Act, 2013, a general meeting of a company may generally be called by giving a notice of not less than how many clear days?

  • A. 7 days
  • B. 14 days
  • C. 21 days
  • D. 30 days

Q8. The provisions governing the calling of an Extraordinary General Meeting are contained in a statute administered by which one of the following?

  • A. Ministry of Finance
  • B. Ministry of Corporate Affairs
  • C. Securities and Exchange Board of India
  • D. Reserve Bank of India

Q9. In its May 2026 board decision, PVV Infra Ltd approved a preferential issue of up to how many convertible equity share warrants?

  • A. 6.65 crore
  • B. 8.40 lakh
  • C. 2.00 crore
  • D. 6.65 lakh

Q10. PVV Infra Ltd's May 2026 proposal to raise its authorised capital and issue convertible warrants on a preferential basis is stated to be subject to approval through which one of the following?

  • A. A board resolution alone
  • B. Shareholders' approval via an Extraordinary General Meeting
  • C. Prior approval of the Reserve Bank of India
  • D. Clearance of SEBI alone

Q11. With reference to the Securities and Exchange Board of India (SEBI), consider the following statements: Which of the statements given above is NOT correct?

  1. SEBI was established as a statutory body under the SEBI Act, 1992.
  2. SEBI's mandate includes protecting the interests of investors and regulating the securities market.
  3. The Chairman of SEBI is appointed by the Central Government.
  4. SEBI is a constitutional body established under Article 324 of the Constitution of India.
  • A. 4 only
  • B. 1 and 2
  • C. 3 only
  • D. 2 and 4

Q12. In the context of capital-raising by listed companies, a 'Qualified Institutional Placement (QIP)' refers to which one of the following?

  • A. Issue of shares to existing shareholders in a fixed ratio on a record date
  • B. Issue of specified securities by a listed issuer only to Qualified Institutional Buyers
  • C. Fresh issue or offer for sale of securities to the general public by an already listed company
  • D. Allotment of securities to select identified persons such as promoters