What is a Rights issue?

 What is a Rights issue?

  • Right issue: -A rights issue is an offering of rights to the existing shareholders of a company that gives them an opportunity to buy additional shares directly from the company at a discounted price.
  • Right  Entitlement : -The right entitlements (REs) are transferred to eligible shareholders in their demat accounts, which can be used to apply for the rights issue or traded on the market. Whereas, if the REs are neither sold nor utilized for the rights issue, they will finally expire.