Companies issue additional shares for various reasons. One of the primary reasons they issue additional shares is to raise new capital to fund existing / new business operations. Companies opt to raise funds through different routes such as by way of Qualified Institutional Placement, Preferential Issue, Issue of American Depository Receipts/Global Depository Receipts/Foreign Currency Convertible Bonds, Scheme of Arrangement, etc.

A Company may also issue additional shares to the Employees of the Company by way of Employee Stock Option Plans/Schemes and to its shareholders by way of Bonus/Rights Issue.

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