Rights Issue

A rights issue entitles existing shareholders to take up additional shares in the company, usually below market price without paying any brokerage. A rights issue enables the company to raise additional funds from shareholders. Shares are offered on a pre-determined pro-rata basis. A rights issue may be renounceable or non-renounceable. Renounceable means shareholders are entitled to sell their rights to other investors and non-renounceable means shareholders must either take up the shares or forfeit the rights.

Leave a Reply