Rights Issue - buy and using of RE shares

Stocks
1

  1. When someone get right issue shares - he will go to the companies website and apply for the shares - What about the authentication of the shares that he got and what about the price adjustments?

  2. If someone buy the Right Issue shares (RE) in secondary Market, in his/her case how the above authentication & price adjustment ( same as Point number 1 ) is going to apply.

2

During the process of allotment, the RTA does a Demat check of applicants and will allocate the rights shares accordingly.

The price of the stock is adjusted according to the the ratio of Rights Issue.

Recently M&M Financial did a rights issue at ratio of 1:1 (they gave 1 RE for every 1 share held), the price of rights shares was Rs. 50.

On ex-date the price of the stock was adjusted from 227 to around 138.

This is how the calculation was done,
Price of share before ex-date: 227
Price of one rights share: 50
Ratio: 1:1
Calculation: 227 + 50 / 2 = 138.5

3

i have received the REs . i don’t want to buy the right issue shares on the REs . can i sell off the REs without DDPI/POA ?

4

You can. The process for selling REs in the market is same as selling stocks. If you have not submitted DDPI/POA, then you will have to use CDSL TPIN to authorise the sell transaction.