Primary
Market
-
Rights Issue
Rights Issue – Overview
Offer of securities by a listed Company to those who are
shareholders of the Company as on the record date fixed for
the said Rights Issue.
REs are offered to shareholders based on a ratio of existing equity
shares held as on the record date.
Decision to have a Rights issue Taken by the Board of Directors
of the Company.
Existing shareholders as on a particular date (Record Date) are
offered a right to subscribe to the Rights Issue using their Rights
Entitlement
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What are the options available to an Eligible
Equity Shareholder in rights Issue?
Eligible Equity Shareholders can:
Apply for their Rights Equity Shares to the full extent of their Rights
Entitlements; or
Apply for their Rights Equity Shares to the full extent of their Rights
Entitlements and apply for additional Rights Equity Shares; or
Apply for their Rights Equity Shares to the extent of a part of their
Rights Entitlements (without renouncing the other part); or
Apply for Rights Equity Shares to the extent of a part of their Rights
Entitlements and renounce a part / rest of their Rights Entitlements; or
Renounce their Rights Entitlements in full.
Types of Right Issue
Right issue based on payment terms
Issue of fully-paid right shares: the shareholders must
pay the whole of the issue amount upfront at the time of
allotment.
Issue of partly-paid right shares: where the entire
issue amount is not demanded upfront. Instead, only a
part of it is asked upfront, and the rest is paid in
subsequent calls.
Right issue based on the transferability of rights
Issue of renounceable right share: the shareholders
can sell their rights in the open market to other investors
if they don’t wish to exercise their rights.
Issue of non-renounceable right shares: the option of
transferability is not at the disposal of shareholders. Either
they can subscribe to the shares, or the right will lapse
post the record date.
Rights Issue – Key Terms
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Rights Issue – Key Terms
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Rights Issue – Key Documents
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Rights Issue – Key Documents
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Sample Rights Issue Application Form(1/4)
Amount to be paid at time of Amount to be paid
application later
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Sample Rights Issue Application Form(2/4)
To be filled by Applicant
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Sample Rights Issue Application Form(3/4)
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Sample Rights Issue Application Form(4/4)
Declarations on Source of funds and Future payments
Signature must match with specimen signatures
provided
To be filled by Bank (SCSB)
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Sample Abridged Letter of Offer (ALOF)
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Sample Rights Entitlement Letter
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Electronic Rights Entitlements (REs)
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What to do with Rights Entitlements? – Options available
Apply to full extent Apply for a part of Apply for a part of
of Rights the Rights the Rights
Entitlement Entitlement Entitlement and
(without renounce the other
renouncing the part of the Rights
other part) Entitlement
Apply for the full Renounce the
extent of the Rights Entitlement
Rights Entitlement in full
and apply for
additional Rights
securities *
*Shares will be allotted if the Rights Issue is under-subscribed
FAQs on Rights Entitlements
Price paid to purchase REs on market is not
SEBI FAQs
BSE FAQs connected to amount paid in Rights issue
NSE FAQs subscription! They are independent of each
other.
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Trading in Electronic Rights Entitlements
How to trade in Rights
Entitlements?
On-Market Off-Market
Buy/ sell on the floor of the Stock Buy/ sell using Delivery Instruction Slips
Exchanges through a Stock Broker (DIS)
T + 2 settlement (T refers to the date of Trade to be effected off-market between
trading) buyer and seller
Trade for trade (No short selling allowed) Off-market transfer to be completed in such
Trading commences along with the opening a manner that the REs are credited to the
of the Issue demat account of the Renouncees on or
prior to the Issue Closing Date
Closes 4 working days prior to the closure
of the Issue
Trading in normal market hours
REs which are neither renounced nor subscribed, on or before the Issue Closing Date will
lapse and shall be extinguished after the Issue Closing Date.
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Overview of Rights IssueApplication Process
How to Apply in a Rights
Issue?
Apply Through ASBA Apply Through Registrar’s Web based
Portal (R-WAP)*
Application money remains in Applicant’s bank account till Application money gets debited from Applicant’s
allotment bank account
Please note that the R-WAP procedure may vary;
List of SCSBs available at:
Investors are requested to check the LOF and
https://www.sebi.gov.in/sebiweb/other Application Form of the relevant Rights Issue
/OtherAction.do?doRecognisedFpi=y
es&intmId=34
Physical ASBA Online ASBA Special online application facility created by the
Registrar to the Issue
Application Form to be Online/ electronic Applicants to Log into Registrar’s web based portal
printed, filled-in and application through using (details will be available in LOF and Application
submitted to the the website of the SCSBs Form)
Designated Branches of (if made available by Submit online form using R-WAP and make
the SCSBs such SCSB) payment through net banking or UPI (as
Applicants can also Check with your SCSB if it applicable)
submit a Plain Paper offers an online facility for Online acknowledgment upon successful
Application to the making application in a completion
Designated Branches of Rights Issue May only be available for Resident Investors
the SCSB (check LOF/ Application Form doe further details)
Investors can make payment only using bank account held in their own name - Third-party payments would not
be accepted
An application cannot be made by cash/ cheque
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Participation in Rights Issueby
Shareholders holding Physical Shares
Credit of REs for Credited to a separate Escrow Demat Account before
Physical the opening of the issue
Shareholders
Option 1 Option 2*
Physical Shareholder can open a demat account Additional facility for Physical Shareholders who
before 2 Working Days prior to issue closing date cannot open a demat account before to 2 Working
Days prior to Issue Closing Date
Furnish the relevant details* to the Company or Application can be made through R-WAP specifying
Registrar no later than 2 Working Days prior to issue the folio no. and other details during the issue period
closing date (Physical Shareholders will be ineligible to renounce
REs)
REs transferred to the demat account latest by 1 Allotted securities will be kept in a suspense demat
Working Day prior to issue closing date account maintained by the Company
Application can be made on or prior to the issue Post Allotment
closing date – Application will be considered only if
REs are in the demat account furnished Audit
Physical SubmitAudit Get
Sharehol relevant credit of
der to details* to Rights
Open Company or securitie
demat Registrar in s in the
account specified demat
timeframe account
* Name(s), Indian address, email address, contact details and details of demat account along with copy of self attested PAN and self-
attested client master sheet
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Plain Paper Application
Option to make an application on Plain Paper.
Application to be submitted to SCSB before issue closing, for blocking of
application money in Applicant’s bank account with the said SCSB.
REs cannot be renounced.
Details to be provided in Plain Paper Application:
- Name of Issuer Company
- Name and address of shareholder including joint holders (in same order &
as per specimen recorded with issuer/ depository)
- Registered Folio No./ DP and Client ID No
- No. of shares held as on Record Date and allotment option selected (only
demat form)
- No. of rights securities entitled to and applied for within entitlement;
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Plain Paper Application
- No. of additional rights securities applied for, if any;
- Total no. of rights securities applied
- Details of the ASBA Bank Account and authority to SCSB to block
equivalent amount
- In case of NRI shareholders making application with Indian address, details
of NRE/ FCNR/ NRO Account maintained with the SCSB
- PAN of shareholder (including each joint holder), except for applications on
behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts
- Signature of the shareholder (in case of joint holders, to appear in the
same sequence and order as they appear in the records of the SCSB)
- Copies of any approvals required to make application
One of the risks of making an application on Plain paper is that application
may get delayed / lost in transit.
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Application through ASBA Mechanism
Application through ASBA
(can be made through Online or Physical
process)
Physical ASBA Online ASBA
Print the Application Form/ use Plain Check with your SCSB if it offers an
Paper Application; online facility for making application in
Fill-in the necessary details including a Rights Issue
ASBA Bank Account details
Login to the banking website of the
Submit the Application Form at SCSB
designated branch of SCSB*
Open the application page and fill-in
Obtain acknowledgment slip from the the necessary details and submit the
SCSB bid;
Online Acknowledgement is generated
SCSB submits bid to Stock Exchange SCSB submits bid to Stock Exchange
and blocks ASBA Bank Account and blocks ASBA Bank Account
The list of banks and branch details for the ASBA process is provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherActi
on.do?doRecognisedFpi=yes&intmId=34/ 2
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Illustration of Online ASBA: Application
through Internet Banking (1/2)
Login, go to Investment
Tab and select Rights
Issue and Click on
Apply for Rights Issue in
the next screen
Select relevant
Issuer and
Initiate Payment
Illustration only. Please contact your SCSB for the details on online ASBA facility for Rights Issue, if any, provided by it.
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Illustration of Online ASBA: Application
through Internet Banking (2/2)
Read the
Instructions, fill in
necessary details
Click proceed to
submit the bid.
Thereafter,
confirm details
and complete the
application
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Rights Issue Application through R-WAP
Visit Registrar’s Web based portal and go to R-WAP -> Apply for Rights
Issue
Confirm details and complete necessary verification procedures (including
through OTPs)
Select payment option (Through Internet banking/ UPI) and proceed for
payment
Complete payment
Generate reference number for application
Please note that the R-WAP procedure may vary;
Investors are requested to check with LOF and Application Form
for their Rights Issue
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Applying through R-WAP: Confirm Details
and Verification
Enter DP ID-Client
ID, and PAN
Enter Email
address and
mobile number
and generate
OTP
Enter OTP and
complete
verification
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Applying through R-WAP: Application
Fill in the necessary details in the required fields
No of shares to apply
Bank Details – Net Banking or UPI
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Application through R-WAP Payment
Click on “Proceed to
payment”,
You will be taken on your
bank page/ UPI
Application to make
payment
Once payment is
completed, a reference
no for your application
will be generated
If you choose to pay
through UPI, necessary bank
account details need to be
entered
Click on “Proceed to payment”,
You will be taken on your bank
page/ UPI Application to make
payment
Once payment is completed, a
reference no for your
application will be generated
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Checking Allotment Status and Grievance
Mechanism
Status of allotment/ refund related to Rights Issue application
- informed to investors by SMS/email/ letter.
- May be checked by visiting “Investor Services” section on the
website of the Registrar for the Issue (RTA).
Issue with regard to Non-allotment of shares / Refund etc.
- Contact RTA immediately.
Non-Satisfactory Resolution by RTA -> File a complaint against RTA
with SEBI on:
- SEBI SCORES website/ Mobile App (on Android and iOS platform)
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Checking Allotment Status and Grievance
Mechanism
Contact Details of RTA:
- Provided in Letter of Offer of Rights Issue
- Available on SEBI Website at:
- https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&in
tmId=10
Non-Satisfactory Resolution by RTA -> File a complaint against RTA
with SEBI on:
- SEBI SCORES website/ Mobile App (on Android and iOS
platform)
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Illustration for Allotment Status (Email)
Promoter can subscribe to entire lot of shares.
No minimum subscription.
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Illustration for Allotment Status (RTA
Website)
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Illustration for Allotment Status (Bank/ Stock
Broker Website)
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Thank You
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