Right Issue of Shares

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India

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date.

Shareholders may request for splitting of their REs. This means that they want to renounce only a part of their entitlement and want to apply for the balance. Renouncees can apply for the rights issue. The rights are offered to the existing shareholders who are on the records of the company as on a cut-off date known as a record date fixed by the company.

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