What is Reliance rights issue of shares?

Reliance had made a Rights Issue of 42.26 crore equity shares at Rs 1,257 each. The final call of 50 per cent of the amount – Rs 628.50 per share – has now become due. Reuters Reliance’s rights issue at a total size of Rs 53,125 crore was the largest ever rights issue in India.

How is issue of shares helpful to a company?

Young corporations issue shares to external investors to raise money for expansion. Unlike debt, equity does not require repayment and therefore does not stress a young or growing company’s cash flow. In addition, equity strengthens the balance sheet.

What does a rights issue mean for shareholders?

In a rights issue existing shareholders are given the opportunity to buy a set number of new shares in the company they own. These new shares are often available at a discount to the existing share price, to encourage investors to take part.

How do I apply for rights issue?

It is very similar to an IPO application.

1. Investors can visit their brokerage account online, go to the ASBA services option.
2. Select the IPO/FPO/BUYBACK option that will show all the Rights issues available.
3. Fill in the quantity you want to buy and submit the application.
4. Check the terms and conditions box.

Why are shares issued with different rights?

Different rights can be attached to different classes and types of shares for various purposes such as: to issue shares to raise funds with debt features; to cater to investors who only want to invest for a specific term by issuing shares which can be redeemed in the future, allowing the investor to exit.

How do you benefit from shares?

Benefits of investing in shares

1. Part-ownership of a company.
2. Real-time dealing throughout the trading day with limit orders available when markets are closed.
3. Receive dividends either as income or re-invest to buy more shares.
4. Ability to vote on important company decisions.

What happens to my shares in a rights issue?

A rights issue is one way for a cash-strapped company to raise capital often to pay down debt. Shareholders can buy new shares at a discount for a certain period. With a rights issue, because more shares are issued to the market, the stock price is diluted and will likely go down.

How can I get rights issue of Reliance Industries?

There are two ways to apply for RIL rights issue:

1. Through net banking. Login to your bank account online. In this example, we have used ICICI Bank. Go to the Investments section and click on ‘Invest Online’.
2. Through RTA website. Go to the website https://rights.kfintech.com. Click on ‘Apply for rights issue through RWAP’.