How to apply for a rights issue?
A rights issue allows a company to offer additional shares to existing shareholders at a discounted price. If you're eligible, you’ll receive a Rights Entitlement (RE) in your Demat account. You can use this entitlement to subscribe to new shares or sell it in the secondary market.
What is Rights Entitlement (RE)?
- An RE is a temporary security representing your eligibility to apply for new shares
- It must be used or sold before it expires
- REs are credited to your Demat account based on your existing shareholding
Steps to Apply for a Rights Issue
Check Eligibility
- Ensure you hold shares on the record date
- Verify RE credits in your Demat account
Apply via ASBA (Online)
- Log in to your internet banking portal
- Go to the ASBA section
- Select the rights issue and enter RE quantity, PAN, and DP details
- Submit to block the amount until allotment
Apply via Composite Application Form (CAF) (Offline)
- If you can’t apply online, the company’s Registrar (RTA) may send a CAF to your registered address
- Fill in details like RE quantity, PAN, Demat account, and bank info
- Submit the form with payment (cheque/DD) at a Self-Certified Syndicate Bank (SCSB) branch
Example: IIFL Finance Rights Issue (2024)
- Issue Period: April 30 – May 14, 2024
- Entitlement: 1 RE for every 9 shares held
- Price: ₹300 per share (Face Value ₹2)
- Listing: BSE, NSE
Scenario: If you hold 100 shares of IIFL Finance, you’ll receive 11 REs (100 ÷ 9 = 11 approx.). You can either:
- Apply for 11 shares at ₹300 each using ASBA or CAF
- Sell the REs on the exchange if you don’t wish to subscribe
There are no charges to apply for a rights issue. Always ensure your bank supports ASBA before applying online. You can also explore BSE Rights Issues and NSE Rights Issues to stay updated on current and upcoming offerings. What if...
| Scenario | Outcome |
|---|
| I don’t apply before RE expiry | The entitlement lapses and becomes worthless. |
| I want to sell the REs | You can sell them on the exchange like a regular stock. |
| I don’t receive CAF | You can download it from the RTA website or use ASBA if available. |
Last updated: 24 Jun 2025
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