Section 62: Further issue of share capital
What this section makes a company do, step by step, with the eForms and the days each step allows. Then the section itself, quoted in full.
The procedures, step by step.
Every step in order, the days each one allows, and the eForm it files.
Rights Issue (S.62(1)(a))
7 steps · about 202 days · PAS-3, MGT-14| Step | Allows | Files |
|---|---|---|
| Pass Board Resolution | 7 days | — |
| Issue Letter of Offer | 15 days | — |
| Collect Applications & Payment | 15 days | — |
| Allot Shares | 60 days | — |
| File PAS-3 with ROC | 15 days | PAS-3 |
| File MGT-14 | 30 days | MGT-14 |
| Issue Share Certificates | 60 days | — |
ESOP (S.62(1)(b))
6 steps · about 125 days · MGT-14| Step | Allows | Files |
|---|---|---|
| Draft ESOP Scheme | 14 days | — |
| Board Approval | 7 days | — |
| Pass Separate SR for Each Scheme | 30 days | — |
| File MGT-14 | 30 days | MGT-14 |
| Grant Options to Employees | 14 days | — |
| SEBI Filings (if listed) | 30 days | — |
Section 62 in full.
(1) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered—
(a) to persons who, at the date of the offer, are holders of equity shares of the company in proportion, as nearly as circumstances admit, to the paid-up share capital on those shares by sending a letter of offer subject to the following conditions, namely:—
(i) the offer shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days [or such lesser number of days as may be prescribed] and not exceeding thirty days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined;
(ii) unless the articles of the company otherwise provide, the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person; and the notice referred to in clause (i) shall contain a statement of this right;
(iii) after the expiry of the time specified in the notice aforesaid, or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose of them in such manner which is not dis-advantageous to the share holders and the company;
(b) to employees under a scheme of employees’ stock option, subject to special resolution passed by company and subject to such conditions as may be prescribed; or
(c) to any persons, if it is authorised by a special resolution, whether or not those persons include the persons referred to in clause (a) or clause (b), either for cash or for a consideration other than cash, if the price of such shares is determined by the valuation report [of a registered valuer, subject to the compliance with the applicable provisions of Chapter III and any other conditions as may be prescribed].
[(2) The notice referred to in sub-clause (i) of clause (a) of sub-section (1) shall be dispatched through registered post or speed post or through electronic mode or courier or any other mode having proof of delivery to all the existing shareholders at least three days before the opening of the issue.]
(3) Nothing in this section shall apply to the increase of the subscribed capital of a company caused by the exercise of an option as a term attached to the debentures issued or loan raised by the company to convert such debentures or loans into shares in the company:
Provided that the terms of issue of such debentures or loan containing such an option have been approved before the issue of such debentures or the raising of loan by a special resolution passed by the company in general meeting.
(4) Notwithstanding anything contained in sub-section (3), where any debentures have been issued, or loan has been obtained from any Government by a company, and if that Government considers it necessary in the public interest so to do, it may, by order, direct that such debentures or loans or any part thereof shall be converted into shares in the company on such terms and conditions as appear to the Government to be reasonable in the circumstances of the case even if terms of the issue of such debentures or the raising of such loans do not include a term for providing for an option for such conversion:
Provided that where the terms and conditions of such conversion are not acceptable to the company, it may, within sixty days from the date of communication of such order, appeal to the Tribunal which shall after hearing the company and the Government pass such order as it deems fit.
(5) In determining the terms and conditions of conversion under sub-section (4), the Government shall have due regard to the financial position of the company, the terms of issue of debentures or loans, as the case may be, the rate of interest payable on such debentures or loans and such other matters as it may consider necessary.
(6) Where the Government has, by an order made under sub-section (4), directed that any debenture or loan or any part thereof shall be converted into shares in a company and where no appeal has been preferred to the Tribunal under sub-section (4) or where such appeal has been dismissed, the memorandum of such company shall, where such order has the effect of increasing the authorised share capital of the company, stand altered and the authorised share capital of such company shall stand increased by an amount equal to the amount of the value of shares which such debentures or loans or part thereof has been converted into.
Quoted from the Companies Act 2013 (Act 18 of 2013) as amended, and checked against the MCA text on 17 August 2026. Reproduction of an Act is permitted under section 52(1)(q) of the Copyright Act 1957.
More of the Act
Every deadline under the Act, on one screen.
Paste your client CINs and every filing due under the Companies Act is dated and priced before it costs anything.