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A rights issue allows existing shareholders to buy additional shares at a discounted price, helping companies raise capital while giving investors a chance to increase their ownership.
A Rights Issue of Shares is when a company offers its existing shareholders the right to buy additional shares, usually at a discounted price and in a fixed proportion to their current holdings.
Understanding a rights issue is not just about the discounted shares — it’s also about knowing the key terms that affect your investment. Terms like Rights Entitlement (RE), record date, renunciation period, and call money determine how much you can subscribe, when, and with what flexibility.
A rights issue enables existing shareholders to buy additional shares of a company at a discounted price, thereby maintaining or increasing their stake.
A rights issue is not just an investor event — it’s a coordinated process involving the company, stock exchanges, depositories, and regulators. While shareholders experience it mainly through rights entitlements (REs) and application windows, much happens behind the scenes to make it all possible.
