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An open invitation to existing shareholders by a cash-strapped company to raise funds by allowing investors to buy new shares in the company is known as rights issue. This type of issue provides existing shareholders with securities known as rights.
The company issuing the rights issue will send across a common application form to all its shareholder on the record date. Plus, the company also sends details of the rights and entitlements of the shareholder separately. The registrar of the issue also uploads the application form on its website.
To be eligible for the rights issue, you must have purchased the shares before the ex-date.
- Q. What is a Rights Issue?
- Q. What is the procedure for applying for Rights Issue?
- Q. Will I be eligible for the rights issue if I buy shares on the ex-date?
- Q. How Do Rights Issues Operate?
- Q. What is a Right Entitlement (RE)?
- Q. Can I apply for additional shares in the rights issue apart from my entitlement?
- Q. Would I have to wait for these REs to be credited to my account to be able to apply for the rights issue?