Everything you need to know about the M&M Financial rights issue

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21

what if i sell my shares on 22nd? i will still have the shares on 23rd so i should be eligible right?

23

If you sell your shares on the ex-date, i.e. July 22nd, the shares will be removed from your account the next day by your stockbroker. On the record date, the stockbroker will be marked as the shareholder in the records of the Registrar of the company and will receive the REs. However, since the shares belonged to you, the REs will then be transferred by the stockbroker to your account once they’re listed.

You will then be able to apply for the rights shares or you can sell the REs directly in the secondary markets.

24
  1. The REs will be listed after the rights issue officially closes (28th July - 11th August). So how will I apply for extra shares at Rs 50? The listing price can be more than 50 too. Just want to understand more how it works.
  2. What if sell my shares on 23rd? Will I be able to subscribe to rights at Rs 50?
25

RE’s will be listed on the day issue opens not after issue closes. Once issue opens you can use RE’s that have been alloted to you, or you can buy them in market to apply for rights shares of M&MFIN.

Yes, you don’t necessarily need to have shares of M&MFIN in your account to apply for rights shares.

26

I have few doubts to be clarified in this aspect.

  1. I had purchased 500 shares 2 months ago. My requirement is, I want to sell my existing shares and want to subscribe for rights of my 500 rights@50 each and for remaining amount I will purchase renouncable trading rights in market and subscribe them too.
    To make it possible, at what time is it better to exit. Here in this exit, my requirement is, to exit at best price before downtrend or rights adjustment starts. It will start reducing after record date. I.e. from 24.07.20. Can u suggest me in this regard please…
27

See, it’s hard to predict when M&MFIN’s price will start to correct, you have to make your own call on when to exit.

28

That’s fine but ex- date is 22.07.20 and record date is 23.07.20. In order to get rights till what time I need to hold these shares at a minimum point.Because I don’t want to hold these shares after 24.07.20 at any cost…Can u suggest me among ex rate or record date

29

Record date is 23 July, so you can sell on or after that and you will still be eligible to receive RE.

30

Am I eligible to rights in these 2 cases

  1. if I purchase shares on 22.07.20
  2. if I purchase shares on 23.07.20
31

Both not eligible. You have to buy it in 21

32

No you won’t be eligible since you won’t have shares in your Demat by record date, which is 23.

When you buy on 22, shares will be in your Demat on 24th, When you buy on 23, shares will be in your Demat on 27th.

1 Like
33

If i sell the shares on 22nd, will i get the rights ?

34

Already answered above

35

It means Yes !!
Thank you… :blush:
If you don’t mind, Can you please advise is it a good choice if i sell the shares on 22nd and buy equal no’s in the rights ?

36

Hi…

When will we get RE in our account ? At what price RE will appear and Can we sell them immediately ?

At what price RE will be calculated and appear in our Demat account ? post we get REs and planning to sell them off…, we do not have to pay any amount right like Rights issue is at 50 rs/share.

Please confirm…

Thanks
SiddRoy.

37

The RE will be credited in your account at Rs. 0.0/-. Then you can offer your RE’s at a premium you think people are will to pay. Ideally the price will adjust to match the gap between RE and M&M Fin actual share price as of that day. Also remember as they are issues rights 1:1 this will affect the share price as the number of outstanding shares will be diluted.
Br,
Andy

38

The issue opens on 28th July, so RE’s will be credited to your demat account by then. You can sell them once the trading window opens.

You don’t have to pay any amount if you plan to sell RE’s. The Rs. 50 per share amount is only applicable if you want to apply for Rights Shares.

39

Thanks Andy…
not understood clearly… But i have one example seen recently in ABFRL in my case…
ABFRL… rights announced when price @ 135… on record date, price was 125… and Rights Issue is fixed at 110/-…
I received the RE into my account with the difference of price… at 15. ( 125-110).
I waited for 2 days and sold them off at 29… later RE its price dropped to 5.

So I am not sure how this math calculates… I am trying to understand more on how it works for M&M Financials…

Thanks again… if u can elobarate as per above example… (if possible)…

40

ThanQ Shubh.

41

The math is simple, the listed price of the RE will be Rs. 50(rights issue amount) + Rs. 0 (premium to match market price). So if the M&M Fin price is Rs. 220 on that day, then the market adjusted Premium should be = 220 - 50 = Rs170. This will obviously fluctuate to match the diluted value M&M Fin shares as they are issuing 1:1 shares. basically doubling the number of shares. You can look at the details in this link.