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.
A Rights Issue Offer Letter is a key document issued by a company to its existing shareholders when offering them the right to purchase additional shares, usually at a discounted price.
This is an invitation, not an obligation. The shareholders can choose to subscribe, renounce (transfer), or ignore the offer.
Learn how to apply for a Rights Issue through major banks using ASBA. Step-by-step guides for HDFC, SBI, ICICI, Axis, Kotak, PNB, and YES Bank with tips for a smooth application.
A rights Issue offers existing shareholders the opportunity to buy additional shares—usually at a discounted price.
Understanding the rights issue allotment process and timeline helps investors track their application status and avoid confusion if shares are not fully allotted.
Once rights issue shares are allotted and listed, investors may come across another important concept—call money. This applies only when shares are issued as partly paid shares under a rights issue.
