What are Rights Issue?

What are Rights Issue?

When a company wants to raise capital, issue of fresh shares to the existing shareholders is one option available to the company. In such an issue, existing shareholders have the right to buy a specified number of new shares of the company at a specified price within a specified time. Usually this price is below the market price. The idea is to reward existing shareholders with an investment opportunity, which is perceived to be attractive.

    • Related Articles

    • How do I apply for a Rights Issue at IIFL?

      The process of applying for a rights issue is through ASBA (Applications Supported by Blocked Amount). If your bank supports it, you can apply online just like an IPO. If not then you would have received a courier of the Composite Application Form ...

    • What happen to Right Entitlements which are neither subscribe nor renounced on or before the issue closing date ?

      Rights Entitlements (REs) which are neither subscribed nor renounced on or before the Issue Closing Date are lapsed post closure of the issue and the ISINs linked to these REs shall stand suspended.

    • What are the types of corporate actions?

      The different types of corporate actions announced by a company are: Rights issue Dividend Stock Split Conversion of debentures into shares Amalgamation Merger Demerger Capital reduction / Consolidation of shares Buy Back Bonus Open Offer

    • What is Bonus issue?

      A bonus share is a free share of stock given to current shareholders in a company, based upon the number of shares that the shareholder already owns. While the issue of bonus shares increases the total number of shares issued and owned, it does not ...

    • What is Right Entitlement ?

      A right is issued by a company to its shareholders on a pre-determined date called the record date. Rights entitlements are offered to shareholders as a ratio to the number of securities held on this record date. A shareholder may refuse to subscribe ...