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PRIVATE PLACEMENT "It involves sale of securities to a limited number of investors such as financial institutions, mutual funds, venture capital funds, etc. "The identity of investor is not know when the offer document is prepared. "Private Placement in India is mostly of two types: 1. Private Placement of equity 2. Private Placement of debt Private Placement of equity = It is basically used by the unlisted companies which requires infusion of equity and is not ready to bring IPO = It can freely choose quantity and price as it is not regulated by SEBI. " Typically mutual funds , venture capital funds and alliance partners participate in private placement of equity N Private Placement of debt It started in 1995. Information and disclosures were not defined, credit rating was not mandatory, listing was not compulsory and it was easy to subscribe these issues without any constraints. The regulatory framework changed in 2003 when SEBI and RBI tightened their regulations over these issues. Key features: Debt securities should be compulsorily listed It shall be issued and traded in demat form