What is renunciation of rights issue?

Renunciation of rights issue means transferring your Rights Entitlements (REs) to another person instead of using them to apply for shares yourself.

In simple terms, if you do not wish to invest more money in the company, you can sell or give away your REs to someone else during the renunciation period. The buyer (called the renouncee) then gets the right to apply for those shares at the issue price.

Renunciation can happen in two ways:

• On-Market Renunciation: Selling REs through the stock exchange like regular shares.
• Off-Market Renunciation: Transferring REs directly to another person through a Depository Participant (DP).

It is important to note that renunciation is allowed only in renounceable rights issues. Once the renunciation period ends, REs cannot be traded or transferred.