Can a Rights Issue Be Cancelled?

A rights issue can be withdrawn or cancelled only under limited circumstances.

According to Regulation 60(4) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, a company cannot withdraw its rights issue after announcing the record date, except in case of a force majeure event — such as a natural disaster, war, or sudden regulatory restriction.

In simple terms:

• Before the announcement of the record date: The company may decide not to proceed with the issue if it chooses to defer or reconsider fundraising.
• After the record date: Cancellation is allowed only in exceptional (force majeure) cases and must be disclosed to the stock exchanges with valid reasons.
• After allotment: The rights issue cannot be cancelled under any circumstances.