A bought out deal is a method of offering securities to the public through a sponsor (a bank, financial institution, or

an individual). The securities are listed in one or more stock exchanges within a time frame mutually agreed upon by
the company and the sponsor. This option saves the issuing company the costs and time involved in a public issue.
The cost of holding the shares can be reimbursed by the company, or the sponsor can offer the shares to the public
at a premium to earn profits. Terms are agreed upon by the company and the sponsor.
The Securities and Exchange Board of India mandates that only private companies can choose this method of
issuing securities.[1]

Features

Parties There are three parties involved in a bought out deal; the promoters of the company, sponsors & cosponsors who are generally merchant bankers and investors

Outright sale There is an outright sale of a chunk of equity shares to a single sponsor or a lead sponsor

Syndicate The sponsor forms a syndicate for management of resources required & distribution of risk

Sale Price The sale price is finalized through negotiations between the issuing company & the purchaser
which is influenced by reputation of the promoters, project evaluation, prevailing market sentiment, prospects of
off-loading these shares at a future date, etc.

Fund base The bought out deals are fund based activities where funds of merchant bankers get locked in
for at least the prescribed minimum period.

Listing The listing generally takes place at a time when company is performing well in terms of profits &
liquidity.

Benefits

Speedy sale The bought out deals offer a mechanism for speedy sale of securities involving lower issuing
cost.

Freedom The bought out deals offer freedom for promoters to set a realistic price & negotiate the same with
the sponsor.

Investor protection The bought out deals facilitates better investor protection as the sponsors are
rigorously evaluated and appraised by the promoters before off-loading the issue

Quality offer The bought out deals help in improving the quality of capital floatation and primary market
offering.

Word Repatriation is derived from the latin word Repatriare which means go home. Repatriation is the process of
returning a person back to ones place of origin or citizenship. The term is also used to refer to the process of
converting a foreign currency back into the currency of the home country. Now let us see What is Repatriation NRI
Investment and Non-Repatriation Investment ?

Repatriable NRI Investment: It refers to the investment wherein NRI can take the invested money back to foreign
currency i.e., amount invested can be converted to an investors home country.
Non-Repatriable NRI Investment: It refers to the investment wherein NRI cannot convert invested money back to
his home country.