Can anyone explain the "Right Issues " concept and how it benefits shareholders? I had a stock that recently got the right issue notification, and it was added to my Zerodha account, I thought that is going to be added to my account after some time, but it was removed and my holding value was also reduced for actual buying prices Thanks!
Hi @Bhuvanesh
Welcome to TradingQ&A 
A rights issue is a type of corporate action that enables a company’s current shareholders to purchase extra shares in proportion to their existing holdings, generally at a reduced price.
Eligible shareholders receive right entitlements (REs) in their demat accounts, which can be used to apply for the rights issue or traded on the market. However, if the REs are neither sold nor utilized for the rights issue, they will eventually expire and become worthless.
Please check out the below article and the links within or a detailed explanation of the Rights issue.
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Essentially if one is not planning to apply for shares in the rights issue, they should sell the RE shares immediately before they lose value. Right?
I think this point must be highlighted in the article @Meher_Smaran as many long term investors, who don’t open their accounts for a long time, are losing out on the money they could have gotten by selling RE shares which currently expire worthless for them.
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@Meher_Smaran , as @paekut said we need to sell it in the portfolio and then buy using the Netbanking ASBA facility. is my understanding correct ??
IF one is sure that he does not want to invest more by applying for rights issue he must EITHER sell shares cum rights OR sell RE within a very short period of listing.
IF one wants to apply for rights offer he can apply( buy rights shares) during rights offer schedule only and using ASBA be it online or physical .
@Meher_Smaran I was waiting for RE shares of SOBHA to show up in the interface but today I got an email saying -
" The trading window for Sobha Limited REs you hold closed on 01-Jul-24. Following the closure of the rights issue, these REs will expire and be removed from your holdings. To utilize these REs, you can apply for the rights shares before 04-Jul-24."
Are RE shares not showing up in Kite interface?
The RE will be visible in the holdings section of Kite during the trading period and you can also add RE shares just like other stocks in your watchlist just like other stocks.
Please check the FAQs related to rights issue here: Rights Issues and Rights Entitlements (RE) - FAQs
Obviously I know that.
I am saying that they just DID NOT show up!
Stop replying like your support guys Meher!
If you’re eligible (as you got the mail, I would assume you are) It would definitely show up in Kite during the listing period. Can you please create a ticket and share the ticket number with me? Will get it checked with the team and get back to you.
Come on @paekut ~ This is not fair - We’re all here trying our best to assist There is always scope for improvement and We’re all striving continuously on that front.
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Ok so I recieved another email from CDSL:
Here’s the email from Zerodha:
So if you see the difference, CDSL says that trading window of RE shares will close on 4th July; while Zerodha’s email says that trading window had already closed on 1st July.
And the fact is that I can’t see any RE shares in my Kite as on today.
So is this a communication issue - as info in both emails is a mismatch [and I am yet to receive the RE shares in my demat]? Or is that a tech issue wherein the trading window has already closed without allocating RE shares to me?
Hi @paekut, the CDSL email is informing you about the issue closing date for rights issue of SOBHA, which is 4th July.
The trading window for REs closed on 1st July. As the REs aren’t trading on exchanges anymore, these will not show in your holdings on Kite. However, you can still apply for rights issue until 4th July.
If you held the shares on record date, you should have received the REs, the ISIN for this is INE671H20015, you can check it on Console or logging in to CDSL website.
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