Upcoming Rights Issue
Frequently Asked Questions
Rights issues are an offer made by a company to its shareholders to purchase additional shares of their stock by a certain date at a specific price. These are typically offered at prices that are lower than the typical share price to pique interest.
You can buy shares in rights issue via ASBA/ Net banking process or via RTAs like Karvy and CAMS.
Advantages of Rights Issue:
- The company's reputation improves as it exhibits growth and demonstrates long-term commitment to serving customers by introducing a rights issue feature.
- Existing shareholders become major controllers.
- Quickest method of raising money
Current shareholders have the chance to increase their ownership in a company at a discounted price through a rights issue. By doing this, they increase their exposure to a company's stock, which may or may not be advantageous depending on the profit and loss statement of the company.
Rights issues can lower a stock's value and decrease trading volume, both of which have an impact on the share price. By adding more shares, stock prices become diluted and there may be a downward trend in share valuation.
Rights issues frequently result in increased interest in (and trading volumes on) those shares, which frequently has a significant impact on trading activity on the day they are announced.