What is Rights Entitlement?

Rights Entitlement (RE) is an offer issued to existing shareholders by a company, allowing them to subscribe to new shares or other securities under a rights offer. REs are offered based on a ratio of existing equity shares held as of the record date.

How Do I Get Rights Entitlement?

Rights Entitlement will be issued to eligible shareholders in demat mode under different ISINs.

Options for Eligible Equity Shareholders in a Rights Issue

As an eligible shareholder, you can:

1. Apply for the entire number of rights shares as per the Rights Entitlement.
2. Apply for the entire number of rights shares as per the Rights Entitlement and request additional rights shares.
3. Apply for rights shares for part of the Rights Entitlement and leave the remaining without renouncing.
4. Apply for rights shares for part of the Rights Entitlement and renounce the remaining.
5. Fully renounce the Rights Entitlement.

How to Renounce Rights Entitlements

Rights Entitlements can be partially or fully renounced either On Market or Off Market.

• On Market Renunciation: Selling your Rights Entitlement in the market, with settlement happening as in normal cases.
• Off Market Renunciation: Transferring Rights Entitlement via Off Market transfer, which must be done before the issue closing date.

What Happens If I Do Nothing with the Rights Entitlement?

If you do not apply for the Rights issue or renounce it before the issue closing date, the Rights Entitlement will lapse and be extinguished after the closing date.

I Did Not Have the Shares on Record Date. Can I Still Apply for the Rights?

Yes, if you purchased the Rights Entitlement in the market or acquired it through an off-market transfer, you can apply for Rights shares to the extent of the quantity of Rights Entitlement in your demat account.

I Bought the Rights Entitlement. Do I Still Need to Apply for the Rights Issue?

Yes, purchasing the Rights Entitlement alone is not sufficient. You must apply for the Rights Issue on or before the issue closing date, or the rights will lapse and the money paid for acquiring the Rights Entitlement will be lost.

I Hold Shares in Physical Mode. How Do I Apply for the Rights?

If you hold physical share certificates, you must provide your demat account details to the Registrar of the issue at least 2 working days prior to the issue closing date. The Registrar will credit the Rights Entitlement to your demat account at least 1 day before the closing date, ensuring your application for Rights shares is processed successfully.

Where Can I Find Information About Rights Entitlement?

Information about Rights Entitlement can be found in the Letter of Offer filed by the issuing company with Stock Exchanges. It is also available on SEBI’s website under "Home - Filings - Rights Issues." You are advised to read the Letter of Offer carefully.

How Can I Apply for the Rights Issue?

The Registrar of the issuing company will provide a link for online applications. You can also apply online through banks that support the issue.

Can I Pay for the Rights Issue from Any of My Bank Accounts?

Yes, you can pay from any of your bank accounts, provided the name on the account matches the records of the Registrar. Payments cannot be made from someone else’s account.

I Am a NRI. How Can I Pay for the Rights Issue?

NRIs can apply through the bank via ASBA mode, as this is the accepted method for payment to the Registrar.