corporate actions · intermediate
Rights issue
A rights issue offers existing shareholders the chance to buy new shares in proportion to their holdings.
Rights entitlements in India are credited to demat accounts and may trade for a limited period.
Shareholders can subscribe, renounce, or let entitlements lapse depending on the offer terms.
The issue price is usually at a discount to the market price at announcement.
Successful rights issues increase share capital and bring fresh equity into the company.
Part of the Market Pulse Term of the Day series — factual market vocabulary, not investment advice.