Rights issue

    Rights Issue

    Basics of Stock Market

    An offer to existing shareholders to buy new shares, usually below the market price, in proportion to their holding. It raises fresh capital for the company.

    Why it matters

    Unlike a bonus, a rights issue brings in cash and dilutes those who do not subscribe. Why the company needs the money matters more than the discount offered.

    Indian example

    Related terms

    Bonus issueDilution

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