⚠ BETA — all market data shown (deals, filings, prices, indices) is demo / illustrative, not live trading data. For evaluation only; verify before acting.
June 14, 2026
The Dispatch

Definition

Rights Issue

A rights issue offers existing shareholders the right to buy additional shares, usually at a discount, in proportion to their current holding.

In a rights issue a listed company offers new shares to current shareholders in a fixed ratio (say 1 share for every 5 held) at a price below market. Shareholders can subscribe, let the right lapse, or sell their rights entitlement, which trades on the exchange during the offer period under SEBI's framework.

Rights issues are a relatively quick way to raise capital from existing owners while giving them first claim to avoid dilution. Those who do not subscribe see their stake diluted and may receive value only if they sell their rights entitlement.

Related terms

  • Rights EntitlementA rights entitlement (RE) is the tradable right credited to shareholders in a rights issue, allowing them to apply for new shares or sell the right.
  • DilutionDilution is the reduction in existing shareholders' percentage ownership when a company issues new shares.
  • Follow-on Public Offer (FPO)An FPO is a public issue of shares by a company that is already listed, used to raise additional capital or let existing holders sell their stake.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.