Definition of Firm Allotment

A part of the total money the company raises in the market is fixed for the promoters to avoid dilution of their stakes. This is termed as Firm Allotment.

Points to remember:

• According to DIP guidelines, only a certain percentage of shares can be kept under ‘Firm Allotment.’
• These shares are offered at a different price than the net price offered to the public, normally higher than the latter one!