Aditya Birla Fashion - Rights Issue

Update: Aditya Birla Fashions has fixed January 8, 2021 as the record date for the purpose of ascertaining the holders of partly paid-up equity shares to whom the first call notice would be sent. You can check announcement from the company here.

As a result, the Partly Paid shares of Aditya Birla Fashions under ISIN INE647O01019 will be suspended from trading on exchanges with effect from January 7, 2021.

Event Schedule
Issuance of First Call Notice January 11, 2021
Call Payment Period January 15, 2021 to January 29, 2021
Allotment of Partly-Paid shares under new ISIN In 2 to 3 weeks from January 29, 2021

For more information, you can refer to this notice from the company.

Aditya Birla Fashions will issue Right Entitlements (REs) to anyone who held its shares on July 1st, 2020. These REs will be temporarily traded on the stock exchanges and will then be extinguished. You can either use the REs to apply for the rights shares of Aditya Birla Fashions or you can sell them directly.

You can check the announcement from the company here .

Issue details
Ratio 9:77
Issue Price ₹ 110
Issue Period July 8th to 22nd
RE trading Period July 8th to 17th
Tentative credit of rights shares August 4th
Tentative listing of rights August 7th
Schedule Face Value Premium Total
On Application 5.0 50.0 55.0
1st Call [January 2021] 2.5 25.0 27.5
2nd Call [July 2021] 2.5 25.0 27.5
Total 10.0 100.0 110.0

How to apply for the Aditya Birla Fashions rights issue?

Once you either receive the REs from the company or purchase it from the market, you will need to apply for the rights shares using Netbanking ASBA. You can check the process in this post .

You can verify your entitlement on the website of the Registrar & Transfer Agent . You will need to enter your demat account’s Beneficiary Owner ID which is a 16-digit number. You can read this FAQ on the RTA’s website for details.

You can also apply for right on the RTAs website - https://linkintime.co.in/RightIssues/index.html.

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When can we sell right credited

RE trading period is mentioned above.

Anyone suggest me how can I sell the shares, because by mistakenly I have bought REs shares but I don’t have ABFRL shares.

You should be able to see ABFRL-RE-BE in your holdings, you can sell these shares from there or add ABFRL-RE-BE to your watchlist and sell it from there.

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Today I have Purchased ABFRL- RE -BE (Rights Entitlement). But I do not have the main ABFRL one. So, if I don’t sell the RE before 17th then what will happen to the shares I purchased today. Do I have to pay some call money or will my shares be forfeited.
Kindly explain this issue. I am very confused

After 17th July, when RE’s trading period ends you can use the RE’s purchased to apply for the rights shares. If you sell RE’s bought before 17th July there will be no obligation for you to pay any call money.

Read more here Aditya Birla Fashion - Rights Issue

@ShubhS9 so I have to give Rs. 50 if I am unable to sell then before 17th July otherwise my shares will be forfeited. Right?

Yes, you will have to pay Rs. 50 when you apply for rights shares. If you don’t RE’s will cease to exist after 22nd July and you will lose all the money you paid for buying RE’s.

thank you very much for the information @ShubhS9. Just one more question. Suppose my buying price is Rs. 20, or closing price on 17th is Rs. 20, then I have to pay whole Rs. 50 or Rs. 30 only (50-20) and my buying price will be Rs. 70 or 50. Thanks

You will have to pay Rs. 50 when you apply.

Rs. 20 is the premium you have paid to acquire RE’s to apply for rights issue this won’t be counted towards premium you have to pay while applying for rights shares.

Your buying price will be 70.

We don’t need to own ABFRL shares to apply for rights. We can buy the rights entitlement from the market and apply for the rights issue. Am I correct?

Yes, you are correct.

I have purchased these REs on Thursday but I am not able to sell it and share are not showing in my demat account what to do I m confused is this because of T-2 policy

Yes. RE’s are settled Trade-to-Trade, so you can’t sell them until they are in your Demat account.

RE’s will be delivered to you on Monday EOD, you will be able to sell on Tuesday.

I have two questions,could you please clarify

  1. If i have purchased 100 RE shares and will i be getting 100 shares once alloted. Do i have to apply for 100 shares by paying at the rate of Rs.55 each.
  2. What happens to the RE shares i have in my demat account post July 17th. They will be automatically converted to the actual stock after allotment of shares and what happens to the amount paid for buying RE’s… Please explain the process of this RE shares getting converted and how they show up in our Demat Account
    Thanks

You have 100 RE’s, you have right to apply for 100 shares and you will have to pay Rs. 50 premium per share on application.

RE’s will cease to exist after July 17 and will vanish from your Demat account.

The amount you paid to purchase was premium you paid to get rights to apply for the issue. The amount you paid for RE’s goes to shareholder(s) who renounced their rights (gave away their rights by selling the RE’s).

PS: You have bought the RE’s so make sure you apply for the rights shares, if you don’t and once RE’s vanish from your Demat account there is no way to get back money you paid to buy RE’s.

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Excellent Response… Thanks much!!!

Hi,

Thanks for providing all this information. I have couple of similar queries.

  1. I have applied for ABFRL RE. What happens if delivery of RE shares happen on 18th July? If I cannot sell it, then what’s the process of applying for Abfrl shares.

  2. What if I want to opt for Abfrl rights issue after 17th July? Will I able to or not.

  3. Does RE share prices fall or rise towards the close date of 17th?

Thanks

Trading of RE’s stopped yesterday, if you bought yesterday RE’s will be delivered to you on Wednesday.

This has already been explained above

How to apply for the Aditya Birla Fashions rights issue?

Once you either receive the REs from the company or purchase it from the market, you will need to apply for the rights shares using Netbanking ASBA. You can check the process in this post .

You can verify your entitlement on the website of the Registrar & Transfer Agent . You will need to enter your demat account’s Beneficiary Owner ID which is a 16-digit number. You can read this FAQ on the RTA’s website for details.

You won’t be able to apply after 17th. If you don’t apply for rights shares on or before 17 July you will lose the entire premium paid to buy RE, there will be no refund.

RE’s have stopped trading now, and will vanish from your Demat account once issue ends on 17th July.