Question { 23620 }

why share issued over the par value? or why issue share by
share premium?

Answer

Shares are issued over the par by

a) Listed companies as per the SEBI guidelines. Some times
companies like Reliance power can misuse market dynamics to
issue shares at premium, while it makes no sense.
b) Unlisted private companies and there is no regulation.

Even a new company can issue shares over par value. e.g. a
company may bring in Rs.one crore against a paid up capital
of only Rs.one lac to save the fees payable to the
government which is dependent on the authorised capital of
the company.