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1. |
Directions: The critical reasoning question is based on a short argument, a set of statements, or a plan of action. For each question, select the best answer of the choices given and explain why the chosen answer is the right fit.Statements: Kalyan Jewellers Pvt.Ltd has filed its draft red herring prospectus (DRHP) with market regulator SEBI for a Rs 1,750-crore initial public offer (IPO). The IPO will facilitate a partial exit for the private equity investor Warburg Pincus and also facilitate debt reduction. The fresh issue component will be Rs 1,000 crores and the promoters and Warburg Pincus will dilute stake worth Rs 250 crore and Rs 500 crore.Which of the following assumptions hold? |
A. | Warburg Pincus anticipates losses going ahead and want to exit the shareholding. |
B. | Gold rates are at historic lows so Jewellery need to raise money. |
C. | Board of Kalyan Jewellers has decided to reduce the Company's debt from the proceeds of the IPO. |
D. | Jewellery groups are not allowed to file for IPO if they don't have a private investor. |
E. | None of the above assumptions hold. |
Answer» F. | |