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What if i buy 10 RE but doesnt have enough shares of RIL in by zerodha account and if i apply through RTA. Would i be eligible for shares allotment??
If you buy 10 REs, you can apply for upto 10 shares as part of the Rights allotment.
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Thnx a lot for explaining. I had the same problem. Please update this post if there are any corrections.
Dear All,
I have a general question out of curiosity on this topic. Hereās the screenshot of the terminal, captured today sometime back.
As you can see Reliance share was traded at 1432 and its RE at 193. So how is buying RE a profitable proposition for an investor rather than buying directly from the existing Reliance thatās traded at 1432.
193 + 1257 = 1450 which is more than the current market price of Reliance share. Ignore the minor fluctuations but it seems both will run close to each other for sometime.
Thanks and regards,
Rohit
The RIL-RE is like a call option for the partly paid right shares of reliance. The partly paid shares should theoretically trade at 25% of the CMP of ordinary Reliance shares (since the paid-up value is 25%).
However, there can be a significant premium/discount as well. Accordingly, the value of the REs will depend upon the value the market feels is appropriate for the partly paid shares of Reliance.
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Thatās a great reply. Unfortunately I am a layman and found it hard to interpret it. From another perspective if I have 100 REs and I sell them at say current price of 190 then I suppose I should be gaining at least 100*190 = 19000 right? (Exclude the exchange/transaction/DP cost)
Thanks and regards
Mohit talked about premium or discount market will give but the question was abt rational of any such premium/discount, isnāt it?
I seek a clarification with respect to the price point of RIL-RE-BE. It is showing 190.5 right now. But, by definition of CMP - Fixed price of 1257, shouldāt it be 1424.6 - 1257 = 167.7? Why is there a difference of ~Rs 23 for the pricing of RIL-RE-BE?
I will tell my own thinking. @mohitmehra has hinted about this right issue is like call option. I have 500 shares of reliance and i want to hold it for long term say beyond 2 years. I will sell my existing shares and buy right entitlement. Result will be holding 500 shares with less amount blocked. Ofcourse in the future i have to pay the full amount but not before one year. It is like holding future lot/call option without worrying of rolling over each month and will also save on impact cost/premium cost of rolling over. Little premium over calculated value i will pay for this strategy. this is what i have done already. If some fault in my thinking please correct me.
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Today, i have purchased 100 quantity of RIL-RE-BE at strike price 195.
Currently, i am not holding any reliance share.
What should be the next steps.
How to get RIL shares against this rights.
Can i sell 50 shares rights after T+2 like regular share in zerodha.
How much amount i would need to buy reliance shares against these 100 rights.
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Letās say I am purchasing the Reliance REs from the market today. I can apply directly via ASBA or through the RTA on the web?
Additionally, would I have to wait for these REs to be credited to my account to be able to apply for the Rights issue?
Yes, you will be able to either apply via ASBA or directly through the RTA.
The RTA will check the demat account for REs during allotment. However, it is asking the investors to declare whether they already have the REs or have purchased it. There isnāt a third option which say you will purchase the REs within the RE trading period.
Do all the RE, will get a share or itāll be like subscribing to IPO (lottery system)?
If you have 10 REs, and you apply for 15 shares. You will get 10 right shares since youāre eligible. For the remaining 5, there will be a lottery.
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I applied throug RTA for RE already alloted to me by defaultā¦ Today I again purchased new 20 RE. But i am now not able to apply through RTA it shows payment already done. What should i do? @mohitmehra
@Quicko kindly guide
The taxation of right shares sold is would be same as in case of sale of equity shares:
If STT is paid:
STCG - 15% under Sec 111A
LTCG - 10% in excess of Rs. 1 lac under Sec 112A
If STT is not paid:
STCG - slab rate
LTCG - 10% Without Indexation
For any further questions, write to us on [email protected]
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@Bhuvan I didnāt apply for reliance rights, still, I got 3 shares in my DMATE. How come?
Can I sell these or after a time it will disappear?
I bought some RIL-RE-BE units today in 3 transactions (5 units each time). Should I have to place as many order on RTA website or just one consolidated order for RIL-RE-BE units is enough. I understand that we have to place different orders for share holder REs & purchased REs.