Everything you need to know about the Heritage Foods Limited Rights Issue

Heritage Foods Limited (HERITGFOOD) has announced a rights issue of 4.64 crore equity shares aggregating up to Rs. 23.2 crore. The rights issue opens for subscription on January 30, 2023, and will close on February 13, 2023.

Anyone who holds shares of Heritage Foods Limited as of January 20, 2023 (record date) will be eligible for receiving Rights Entitlements (REs). You can check the announcement from the company here.

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 Heritage Foods Limited or you can sell them in the market.

You will be eligible for Rights Entitlements (REs) if you have bought the shares on or before January 19, 2023. The ex-date is January 20, 2023.

Rights Issue Details

Issue Period January 30, 2023 - February 13, 2023
RE Trading Period January 30, 2023 - February 08, 2023
RE Symbol HERITGFOOD-RE
Issue Price Rs. 5
Ratio 1:1
Ex-date January 20, 2023
Record Date January 20, 2023
Tentative Date of Allotment for rights shares February 21, 2023
Tentative Date of Listing for rights shares February 27, 2023

How to apply for Heritage Foods Limited 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 IDwhich 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 FAQ’s on Rights Issue and Rights Entitlements here.

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you will have equal number of RE ( re is not a share ) in your demat by 30.01 the rights issue opening date . these RE must be used EITHER to apply for rights shares by 13.02 OR sell in market by 08.02.
you can sell RE only during 30.01 to 08.02 …these can be sold like normal securities with 3 things in mind…1 RE will have fixed circuit breaker of 40% 2…RE settled as T group 3…RE will trade only for a very very limited time. if you do not use it it will expire with zero .

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What would be the RE price on opening ? , if 27.1.23 closing price is Rs. 188 , ( just assuming as today ltp ) then the RE price would be 183 ? [ previous day closing price - issue price ] , Rs. 188 - 5 = 183 ) , is this is right calculation ?

Q. How is the base price calculated?
On the first day of the Right Entitlement, the base price would be calculated as (The closing price of the stock - Right Entitlement price). On every subsequent day, the closing price of the Right Entitlement trading would be the base price.

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Can i sell part in RE and part applying for shares ?

Buyer of RE on 30.01 will get time from til 08.02 to sell his RE wherein buyer of RE on of after 03.02 will not get much time …much trading time but he must apply only hence RE price will also depends on this theory .

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YES you can do so . moreover it is very likely that 10-15% additional allotment if applied , is possible on application in shareholders quota wherein very less chance that renouncee applying and getting additional shares allotted.

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This is right. However, the REs can trade at premium or discount to the base price depending on demand and supply.

Yes, you can sell part of alloted REs and apply for the remaining. You will get guaranteed allotment for number of REs you hold in your demat account.

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Thanks for your replies @aniln , @ShubhS9

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I bought HF shares @360, now price showing half. Appears a split share. Please clear my doubts. If I buy again right issues, do I need to pay @LTP? Then how many shares will be in my account? 2 ? While I would spend more! Or my dp will show double number of shares by default at some points, and RE should be on top if I buy?

Since the rights issue ratio was 1:1, the current market price reduced accordingly. The company will allot you REs at 0 price, you can use these REs either to apply for rights shares (you will have to pay Rs. 5 per share when making application) or if you don’t wish to apply for rights shares, you can sell the REs in the market and pocket the amount you will receive.

@aniln , @ShubhS9 , & other experienced members ,
While selling demat held shares + RE , if not meet my target price , then i have to either apply for shares online or sell RE at posible maximum price and then again buy in mkt without going through RE process
( which will take some time shares to be alloted to my demat ? ) . Which one is best , if RE traded in discount ? Any plus / minus in the above both methods , could please share your views , Thanks .
[ Earlier had an experience in GDL , which traded in premium , so no thought abouth this ! ]

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Thanks for explaining. I got my Demat with Zerodha. How should I buy shares through RE? Will there be any link sent to my account?

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ASBA from your bank be it online through net banking or physical by visiting bank is the only option to apply rights issue . if your bank is not asba compliance ( there are some banks mainly cooperative banks ) you can not apply rights issue .

I hold Heritage Foods shares and have received the REs in my demat account. I plan to apply for additional shares in the rights issue. Regarding this, I have two questions:
(1) Would you know how are the unallocated shares allocated to applicants who apply for additional shares? Is it in the ratio of (the additional shares applied for by an individual) divided by (total additional shares applied for)?
(2) Is there a maximum quantity of additional shares that I can apply for?

Many thanks.

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(1) allotment of additional shares will depend on shares available for apportionment and will also be in proportion to your holding, irrespective of additional shares applied by applicant . if even after all additional shares applied and allotted there is left over the same will be proportionately allotted to renounceeS who have applied for additional shares.
(2) the only ceiling for rights issue application is that an application for rights shares including additional shares can not be more than issue size.

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Hello All,
I tried the HDFC Bank Site for * Online via Netbanking ASBA* but there the Heritage Foods Rights issue is not listed , there are 7 or 8 other co.s rights issues listed but not Heritage foods …can anybody help how to get this done through HDFC bank …dont share any generic process as I am fully aware of the process …but my Q is specific to HDFC BANK A/C Holders Only who want to apply for Heritage foods

Looks like HDFC Bank is not providing option to apply for Heritage Foods rights issue.

If you have account with another bank and if they are providing the option, you can apply through it. The account need not be the same as the one linked to your trading account, just that the bank account needs to be in your name.

If not then you will have to submit offline application by visiting nearest branch of SCSB. Explained above:

Hi There,

Its looks like Heritage foods not appearing in HDFC as well SBI ASBA from the netbanking.

Spoke to HDFC securities, they said it takes time to appear sometimes, Am not sure as this is the first time for me.

Thanks, Sunil

I have applied RE from HDFC NetBanking, How will i know that it is successful and when these RE will credit to my Dmat account.
Thanks.

Hi

It is showing over there and I have also applied.