Zerodha (Flat Rs 20 Per Trade)
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Rights Entitlement (RE) is a temporary tradable instrument issued to existing shareholders when a company announces a rights issue. It represents the right (but not the obligation) of shareholders to subscribe to additional shares at a discounted price offered by the company.
Shareholders receive these entitlements in proportion to their existing holdings.
For example: If a company announces a rights issue in the ratio of 2:5, it means shareholders can buy 2 new shares for every 5 shares they already hold.
Rights Entitlements are credited to shareholders’ demat accounts and can be traded on the stock exchange during the issue period, giving flexibility to those who may not wish to subscribe.
