|Issuer Company||Issue Dates||Issue Price||Issue Size|
|KDDL Limited||09 Apr 2021 - 23 Apr 2021||Rs.230||25.00|
|India Grid Trust||06 Apr 2021 - 13 Apr 2021||Rs.110||1283.65|
|WeP Solutions Limited||24 Mar 2021 - 19 Apr 2021||Rs.10||9.87|
|Emerald Leasing Finance and Investment Company Limited||22 Mar 2021 - 05 Apr 2021||Rs.10||20.00|
|Rajapalayam Mills Limited||15 Mar 2021 - 30 Mar 2021||Rs.569||69.95|
|Urja Global Limited||25 Dec 2020 - 10 Feb 2021||Rs.5||25.00|
|Pricol Limited||03 Dec 2020 - 17 Dec 2020||Rs.30||81.25|
Cash-strapped companies can turn to rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. We explain how rights issues work and what they mean for the company and its shareholders.
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.
Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way that they would trade ordinary shares. The rights issued to a shareholder have value, thus compensating current shareholders for the future dilution of their existing shares' value. Dilution occurs because a rights offering spreads a company’s net profit over a larger number of shares. Thus, the company’s earnings per share, or EPS, decreases as the allocated earnings result in share dilution.