As per the Section 79 of the Company Act of 1956, following are the conditions under which a company can issue shares at a discount.

• A company can issue shares at discount provided it has previously issued such type of shares. 

• The issue of shares at a discount is authorised by a resolution passed by the company in the General Meeting and sanction obtained from the Company Law Tribunal. 

• The resolution specifies that the maximum rate of discount is 10% of the face value of the shares, unless higher percentage of discount allowed by the Company Law Tribunal. 

• A company can issue shares at discount at least after one year from the date of commencing business. 

• If a company wants to issue shares at discount, then it must issue them within two months of obtaining sanction from the Company Law Tribunal. 

• Every prospectus related to the issue of the shares should explicitly and clearly contain particulars of the discount allowed on the issue of shares.