Right Issues

A rights issue is another way to raise capital by corporates from existing shareholders by offering them to buy additional shares in proportion to their current holdings, usually at a discounted rate. Shareholders who qualify will find right entitlements (REs) Shares allotted in their demat accounts. These RE's are also listed temporarily on the exchanges to assist shareholders who do not want to acquire new shares to sell these entitlements in the markets.  These REs can be used to apply for the rights issue or traded on the market. It's very important to note that if these REs are neither sold nor applied by ASBA route, will expire and lose their value.  So it's very important to ensure that you apply for the Rights within the Rights Issue closure date in case you have not sold the Rights Entitlement in the exchanges. 

Right Entitlements (RE)

Rights Entitlements (REs) are like short-term digital certificates that show a shareholder's right to apply for a rights issue and are credited to your demat account if your are eligible for the same and gets extinguished once the rights issue closes. Corporates credit Rights Entitlements to shareholders based on the number of securities they own as on the record date.

Learn more about Rights issue in our detailed article on Jiniversity.

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