Rights Issue

A Rights Issue is a method by which a company raises additional capital by offering existing shareholders the right to buy new shares at a discounted price. It helps companies fund expansion or reduce debt while allowing shareholders to maintain their ownership percentage without dilution if they choose to subscribe.

Chapters

1. Basics of Rights Issue

A Rights Issue allows existing shareholders to purchase additional shares at a discounted price, giving them priority over new investors. It helps companies raise capital while enabling shareholders to maintain their ownership percentage and avoid dilution.

Read →

2. Key Terms in Rights Issue

Key terms include Rights Entitlement (RE), issue price, record date, ex-rights date, and call money. Understanding these terms helps shareholders navigate the process, calculate their entitlement, and participate effectively in the rights offering.

Read →

3. Rights Issue Process and Eligibility

The process involves board approval, regulatory filings, record date announcement, issue opening, application, allotment, and listing. Eligibility generally requires holding shares before the record date and being a registered shareholder at the company’s depository.

Read →

4. Understanding the Rights Issue Mechanism

The mechanism ensures existing shareholders have the first right to subscribe to new shares in proportion to their holdings. It maintains ownership balance, prevents dilution, and allows the company to raise funds efficiently.

Read →

5. Rights Issue Offer Letter

The Rights Issue Offer Letter is a formal document issued to shareholders. It details the issue price, number of shares offered, subscription procedure, key dates, and other regulatory information necessary to apply for the new shares.

Read →

6. Rights Issue Application Process

Shareholders apply for the rights issue by submitting forms through banks or online channels. Applications must specify the number of shares to subscribe, ensure timely submission, and follow the guidelines mentioned in the offer document.

Read →

7. Applying for a Rights Issue via ASBA (Bank Process Guide)

ASBA allows shareholders to block funds in their bank account while applying for a rights issue. The blocked amount is only debited if shares are allotted, providing a secure and convenient application process.

Read →

8. Rights Entitlement (RE) Trading and Strategy

Rights Entitlements (RE) can be traded on exchanges before the record date. Investors can sell their REs to monetize rights or purchase additional REs strategically to increase their shareholding.

Read →

9. Rights Issue Allotment and Listing Process

After the subscription period, shares are allotted based on entitlement or oversubscription rules. Allotted shares are then credited to demat accounts and listed on stock exchanges, making them tradable for shareholders.

Read →

10. Rights Issue Call Money

Call Money is the amount shareholders must pay when exercising their rights to subscribe to new shares. It may be collected in multiple installments as specified by the company, ensuring structured fund mobilization.

Read →

IPOBarta.AI

MAIN

LEGAL

ENGAGEMENT

Rights Issue

Chapters

1. Basics of Rights Issue

2. Key Terms in Rights Issue

3. Rights Issue Process and Eligibility

4. Understanding the Rights Issue Mechanism

5. Rights Issue Offer Letter

6. Rights Issue Application Process

7. Applying for a Rights Issue via ASBA (Bank Process Guide)

8. Rights Entitlement (RE) Trading and Strategy

9. Rights Issue Allotment and Listing Process

10. Rights Issue Call Money