Renunciation in Private Placement

 Section 62 deals with the renouncement of rights by a shareholder and how it applies to certain scenarios like a company's right issue or private placement.

Right Issue: When a company decides to issue additional shares to its existing shareholders at a price usually lower than the prevailing market price, it's termed a "right issue." This gives existing shareholders the right (but not the obligation) to buy more shares in proportion to their existing holdings.

Renouncement of Rights: Sometimes, a shareholder might not have the financial capability to subscribe to these additional shares, even though they have the right to do so. In such cases, Section 62 allows a shareholder to renounce their right to buy these shares by selling this right to someone else who is willing to subscribe to these shares. This action of selling the right to subscribe is termed "renouncing the right."

Private Placement: Private placement is a process where a company offers shares or securities to a select group of investors without making a public offering. Section 62 (3) specifies the rules regarding private placement offers. It states that a company conducting private placement must issue an offer and application in a specific format to identified individuals or entities whose details are recorded by the company.

Renunciation in Private Placement: The proviso (the part starting with "Provided that...") clarifies that in the case of private placement, the offer and application documents issued by the company cannot be transferred or renounced to another person. This means that the right to subscribe to shares or securities through private placement cannot be sold or transferred to someone else.

So, while shareholders in a right issue can sell their right to subscribe to additional shares if they can't afford them, shareholders participating in a private placement cannot transfer this right to another person. This is to maintain control over who participates in the private placement and prevent the transfer of these rights to unidentified parties.