Under-subscription is a situation where fewer shares have to be sold than offered. In this scenario, the demand for shares is lower than the supply. It typically occurs when the initial public offering (IPO) or a new issue of shares fails to attract enough investors to purchase the available shares.

Under-subscription can happen for various reasons, including market conditions, investor sentiment, lack of confidence in the company, or overpricing of the shares. When there is under-subscription, it indicates a lack of interest or confidence from investors in the company's shares.

Explanation:

1. Under-subscription in an IPO:
- When a company decides to go public and offer its shares to the public for the first time through an IPO, it sets a certain number of shares to be sold.
- The company determines the price at which the shares will be offered and invites investors to subscribe to the IPO.
- If the demand for shares is lower than the number of shares offered, it results in under-subscription.
- For example, if a company plans to sell 1 million shares but receives subscriptions for only 800,000 shares, it means there is under-subscription.

2. Consequences of under-subscription:
- Under-subscription can have negative implications for the company and its shareholders.
- It may lead to a lower amount of capital raised than anticipated, affecting the company's ability to fund its operations or expansion plans.
- Under-subscription can also be a sign of weak investor confidence in the company, which may impact its stock price and future fundraising prospects.

3. Remedial measures:
- In case of under-subscription, the issuing company has a few options to address the situation.
- It can try to attract more investors by lowering the price of the shares or extending the subscription period.
- The company may also approach institutional investors or underwriters to purchase the unsold shares to ensure the completion of the issue.
- In extreme cases, if the under-subscription is significant, the IPO may be canceled or postponed.

In conclusion, under-subscription occurs when there is a lack of demand for shares in an IPO or new issue. It signifies a lower number of shares being sold than offered, reflecting weak investor interest or confidence in the company's shares. The company may need to take remedial measures to address under-subscription and ensure the successful completion of the issue.