Everything you need to know about Tata Consumer Products rights issue

Corporate actions Rights issue
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Tata Consumer Products Limited (TATACONSUM) has announced a rights issue for 3,66,47,492 equity shares aggregating up to Rs. 2,997.77 crores. The rights issue opens for subscription on August 05, 2024, and closes on August 19, 2024.

Anyone who holds shares of Consumer Products Limited as of July 27, 2024 (record date) will be eligible for receiving Rights Entitlements (REs). 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 the company or you can sell them in the market.

You will be eligible to receive Rights Entitlements (REs) if you’ve bought the shares on or before July 25, 2024. The ex-date is July 26, 2024.

You can check the announcement from the company here.

Rights issue details

Issue Period August 05, 2024 - August 19, 2024
RE Trading Period August 05, 2024 - August 12, 2024
RE Symbol TATACON-RE
Issue Price Rs. 818 per share
Ratio 1:26
EX-date July 26, 2024
Record Date July 27, 2024
Tentative Date of Allotment for rights shares August 26, 2024
Tentative Date of Credit of rights shares August 28, 2024
Tentative Date of Listing for rights shares August 30, 2024

How to apply for Tata Consumer Products rights issue?

Once you either receive the REs from the company or purchase them from the market, you can apply for the rights shares using the below methods;

You can check the application process here.

You will need to enter your Demat account’s Beneficiary Owner ID which is a 16-digit number while applying for the rights issue.

The option to apply for rights shares through the RTAs portal is not available for this rights issue.

What will happen to my purchased holding of RE shares if I do not apply for the rights issue?

Your REs will lapse and you will lose the premium paid to acquire them. The RE will be in the form of temporary demat securities which will lapse if not renounced/exercised once the trading window is closed.

I don’t have the shares but bought REs, am I still eligible to apply for the rights issue?

In case you have bought REs but don’t have shares, you’re still eligible for the rights issue. You may apply for the rights shares either through the RTA’s portal or via net banking ASBA if your bank allows it. If you don’t take any action, and let the REs remain in your Zerodha account, they will lapse after the issue.

You can read more FAQs on Rights Issue and Rights Entitlements here .

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Is it compulsory to apply with the bank account linked with zerodha demat account or can be applied with other bank accounts.

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You can use any bank account that is in your name, need not be linked to your Zerodha account.

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I have less than 26 shares. How can I apply to atleast get 1 share on preferrential allotment

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you MUST apply for 1-2 shares . you might get .

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Buy Right from market and then apply for right share

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@ShubhS9 what happens if I have less than 26 shares like do I get anything or it’s absolutely nothing

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I have 500 shares bought 3 years back. Will I be automatically allotted the entitled shares ( 500/26 = 19 ) in my zerodha demat account ?
I am bit confused as I am new to this Rights issue. What are the steps I need to execute within which date period.
Do I need to purchase RE like regular shares from Market/Exchange ?

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Rights is OFFER not automatic credit . you must EITHER sell your rights during 05 to 12 August OR apply for shares by paying 818 per share during 05 to 19 August . IF you want to sell you can sell only 19 RE but if you want to apply you can apply more than 19 say 30 , chances are that few additional will be allotted.

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From company’s rights issue letter of offer.

The Eligible Equity Shareholders holding less than 26 (Twenty-six) Equity Shares as on Record Date shall have ‘zero’ entitlement in the Issue. Such Eligible Equity Shareholders are entitled to apply for additional Equity Shares and will be given preference in the allotment of one additional Equity Share if, such Eligible Equity Shareholders apply for the additional Equity Shares. However, they cannot renounce the same in favour of third parties and the application forms shall be non-negotiable.

So if you have less than 26 shares, you won’t get any REs. However, if you apply for additional shares in the rights issue, you will get a preferential allotment for 1 share.

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The REs will be credited to your demat account and will start trading on the exchanges from 5th August.

If you wish to apply for rights shares, you can do so until 19th August. If you don’t want to apply, you can sell the REs in the market until 12th August, after which they will stop trading on the exchanges.

Here’s how you can apply for rights issue:

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Hold 93 shares. Never did anything to apply but got an email from CDSL yesterday:

TATA CONSUMER PRODUCTS LIMITED#RIGHTS ENTITLEMENTS FOR EQUITY SHARES
3 shares have been credited.

  1. I did not apply, why did I get these?
  2. The shares are not visible in my Zerodha Portfolio yet. Will it take time?

Thanks!

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How to do the same?? Is this same as applying for right issue?

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Yes, the process remains the same. While making a rights issue application, you can apply for any number of shares, it need not be limited to the REs you hold.

However, allotment is guaranteed to the extent of REs held, for additional shares it is done on lottery basis.

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So as long as I apply before August 19 I’m guaranteed allotment of 1 share in case holding less than 26 shares and if I apply for more than one it’ll be done on lottery basis and the price will be 818?
Case: having 20 shares and applying for 5 Right Share? Is it possible? Will the entire application get rejected in case of non allotment or I’ll still get 1 share as preferential allotment And the line of balance shares will be released ?

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Help me understand this additional shares

Currently, Rights are issued in the ratio 1 right share for every 26 shares held.

So if I hold 26 shares I can apply and get 1 share which I am entitled to. If i apply for more, i may or may not get it, as it is based on lottery.

Now coming to this additional shares topic, i believe this applies to ppl holding less than 26 shares and their eligibility to apply for additional shares during the rights issue.

  1. How is applying for rights share allowed, if I don’t hold the rights entitlement, as I hold less than 26 shares.

  2. If I am given preferential allotment of 1 share, what is the difference between a person holding 26 shares and a person holding just 2 shares, if both are going to be allotted 1 share.

  3. This nullifies the above 2 question, if the additional shares can be applied only by person holding rights entitlement, meaning if I hold 26 shares i can apply for 2 shares, and 1 will be guaranteed allotted and another 1 will be considered for preferential allotment.

So if the above is true, any person holding less than 26 will not be eligible to apply and can’t get any additional shares.

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@ShubhS9 correct me if I’m wrong the sequence in which this shares work is first allotment is done to those who actually apply having right entitlements then the preferential allotment then the lottery.

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if your eligibility is zero rights shares you can apply as additional shares . 1 share is very likely to be allotted but not assured .
you can apply as many additional shares as possible max limit is size of issue per application.

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As i understand (as per application ) FIRST allotment to all eligible rights entitlement, SECOND to All renouncee THIRD to those with zero eligibility but have applied for additional shares (1 share allotment ) FOURTH to those who have applied for additional shares in shareholder category .
even after all above if something is left ( very rare unless issue is under subscribed ) it will be allotted to Renouncee who have applied for additional shares.

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Suppose you only held 1 share on record date thus your eligibility is zero for rights application .where 1:26 is ratio . you can very well APPLY as additional shares . one share may be allotted not assured.

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