# Public Offer vs. Private Placement — Quick Comparison
A frequent exam question compares the timelines, refund obligations, and penalties under a public offer (Sections 23–40) with those under a private placement (Section 42). The differences are deliberate — a public offer carries broader investor protection thresholds.
## Side-by-Side Comparison
| Parameter | Public Offer | Private Placement |
|---|---|---|
| Offered to | Public at large | Maximum 200 identified persons in a FY (per security class) |
| Allotment within | 30 days from issue of prospectus | 60 days from receipt of application money |
| Refund within (if allotment fails) | 15 days | 15 days (from expiry of 60 days) |
| Interest on delayed refund | 15% p.a. | 12% p.a. |
| Return of Allotment (with ROC) | Within 30 days of allotment | Within 15 days of allotment (Form PAS-3) |
| Use of money | After listing approval | Only after allotment and filing return of allotment |
| Public advertisement | Permitted | Prohibited |
| Mode of subscription | Cheque/DD/banking channel | Cheque/DD/banking channel (cash not allowed) |
## Memory Aid
- Public = 30 / 15 / 15% (faster process, broader audience, higher interest penalty).
- Private = 60 / 15 / 12% (more time to allot, narrower audience, lower interest).
## Why the Differences Exist
- A public offer addresses retail investors needing quick protection — hence shorter allotment and higher interest.
- Private placement involves sophisticated/identified investors — longer allotment is workable, but tighter restrictions on use of funds and on advertisement protect the private character of the offer.