Rights Issue Allotment and Listing Process
Understanding the rights issue allotment process and timeline helps investors track their application status and avoid confusion if shares are not fully allotted.
Understanding the rights issue allotment process and timeline helps investors track their application status and avoid confusion if shares are not fully allotted.
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Once a rights issue application period closes, the next important stages for investors are allotment, credit of shares, and listing. This phase determines how many shares you finally receive, when they are credited to your demat account, and when they become tradable on the stock exchange.
Rights issue allotment refers to the process through which the company decides and allocates the number of rights shares to eligible applicants based on:
After the issue closes, the Registrar to the Issue prepares the basis of allotment, which is approved by the Company’s Board of Directors in consultation with the Designated Stock Exchange. Upon approval, shares are credited, and funds are debited through ASBA.
The right issue allotment process is designed to be fair, transparent, and non-preferential, and is carried out by the Registrar, approved by the Board of Directors, and validated in consultation with the Designated Stock Exchange.
The Basis of Allotment is a formal document that explains how a company decides who gets how many shares after a rights issue closes. It comes into play especially when shareholders apply for different quantities, including additional (excess) shares, and the issue is not fully subscribed uniformly.
The right issue allotment procedure starts with those who have the strongest claim and then moves step by step.
The highest priority is given to:
If some shares remain after honouring RE-based applications, allotment for at least one additional share is considered to the below, provided they applied for it:
If shares are still available, shareholders who fully applied for their entitlement and also requested additional (excess) shares may receive some of those extra shares.
If surplus shares still remain, the renouncees who applied for their full renounced entitlement and also applied for additional shares may receive allotment on a proportionate basis.
In rare cases, if the company has disclosed a specific investor or any other person approved by the Board, they may be allotted shares only if shares remain after all the above categories.
Note: Such allotment is not treated as preferential, and the Board’s decision is final.
If shares remain even after all these steps, they are treated as unsubscribed rights shares. The company may let them lapse or deal with them as disclosed in the offer document.
The rights issue allotment timeline generally follows this sequence:
The entire rights issue allotment period generally takes up to a week from issue closure, depending on regulatory approvals.
Investors can perform a rights issue allotment status check through multiple methods:
This also helps investors identify cases where a rights issue is not allotted or only partially allotted.
Once allotment is finalized:
At this stage, the shares are not yet tradable until listing.
Once the rights issue shares are allotted and listed, investors may need to take one additional step—only if the issue is partly paid. In such cases, companies raise the remaining amount through call money, which shareholders must pay within specified timelines to convert their partly paid shares into fully paid equity shares.
Let us now understand what call money is, how it works, and what investors should be careful about in a rights issue.
You can check your rights issue allotment status in any of these simple ways:
If shares are not allotted, the blocked amount is released back to your bank account automatically.
Rights issue shares are usually credited to your demat account after the allotment is finalised and before the listing date.
Typically, the credit happens 1–3 working days before the listing date, but the exact date is mentioned in the Issue Schedule section of the Letter of Offer as the “Credit Date”.
If shares are not credited by the expected date, investors should:
You can sell rights issue shares once they are allotted and listed on the stock exchange.
Once listed and credited to your demat account, they trade like normal equity shares and can be sold any time after listing during normal trading hours.
Yes, you can sell the rights issue shares like normal equity shares, once they are credited and listed.
Note: You can sell also sell the rights issue in the form of Rights Entitlements (REs) before allotment during the RE trading period (only if the issue is renounceable).