When a company comes out with right issue ? it is actually issuing new shares. Doesn’t it dilute the existing shareholder(especially if he is not subscribing to the right issue).
Company issues Rights Entitlement, which shareholders can either use to apply for rights shares or sell them in the market.
So if they are not applying for rights shares, they can sell the Rights Entitlement in the market which will make up for any change in their investment value due to rights issue.
1.how to sell rights entitlement and what can be the expected price ?
2.can it be sold like regular stocks or is there any other procedure?
3.If he does not sell the right entitlement is he getting diluted ?
Price will be according to demand & supply and other factors. Currently there is Urja Global Rights Issue going on, you can add URJA-RE to your watchlist and check the price to get an idea.
You can sell the Rights Entitlement just like you sell stocks, though you can sell them only in specific time period.
You can check out this post for more information: Everything You Need to Know About Urja Global Rights Issue
If one doesn’t sell Rights Entitlement, and doesn’t apply for rights shares then likely yes.
Thank you.