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Pro - rata allotment of shares is opted by the Company when there is an over-subscription. The excess application money is adjusted towards the sum due on allotment.

We calculate the amount of Pro - rata in the following way:

Suppose X Ltd invited applications for 1,00,000 shares and received applications for 1,50,000 shares. In this case the pro - rata is calculated as 1,50,000/1,00,000 = 3:2. Hence the Pro - rata is 3:2.

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What is pro rata allotment of shares?

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