What is meant by the Right Issue?
Jainam Broking Limited
Last Update 2 jaar geleden
The issue of new shares to the current shareholders is one option accessible to a corporation looking to raise capital. In such a case, current shareholders have the option to purchase a predetermined number of additional shares of the company at a predetermined price and within a predetermined window of time
Generally, this price is less than the market price. The goal is to reward current shareholders with a perceived attractive investment opportunity. A shareholder cannot, however, purchase an infinite number of shares. A 1:15 rights issue, for instance, allows investors to subscribe for one equity share for every 15 shares they already own as of the stated date (record date).