Gloria Tech Solutions Pvt. Ltd. is engaged in developing software products primarily for small and medium-sized enterprises. The company now plans…

Yes, Gloria Tech Solutions Pvt. Ltd. can raise funds through the private placement of shares. Section 23 (2) (b) of the Companies Act, 2013 provides that a private company may issue securities through private placement by complying with the provisions specified in section 42 of the Act along with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014. Meaning of Private Placement According to the Explanation I to section 42 (3) of the Act, "private placement" means any offer or invitation to subscribe or issue of securities to a select group of persons by a company (other than by way of public offer) through private placement offer- cum-application, which satisfies the conditions specified in this section. Offer to be made only to a select group of persons A private placement shall be made only to a select group of not more than two hundred (200) persons (referred to as “identified persons") in a financial year who have been identified by the Board after passing a special resolution. Limit on Fresh Offer As per section 42 (5) of the Act, no fresh offer or invitation under this section shall be made unless the allotments with respect to any offer or invitation made earlier have been completed or that offer or invitation has been withdrawn or abandoned by the company. Thus, Gloria Tech Solutions Pvt. Ltd. can raise further funds through private placement issue after the allotments with respect to right issue for 150lakh have been completed and subject to the maximum number of 200 persons (identified persons) under section 42 (2) and by complying with the procedures stated in Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.