You can apply for a rights issue online through ASBA if your bank supports it, or by submitting a physical form to an SCSB branch. There are no charges to apply for a rights issue.
A company can offer additional shares to you as an existing shareholder through a rights issue based on the number of shares you already hold. The purpose of the issue could be to fund a new project, reduce debt, or restructure its equity capital base. The shares offered in a rights issue are generally available at a discounted price compared to the market price.
You will receive a rights entitlement (RE) in your demat account prior to the opening of the rights issue. The RE is not a rights share by itself but needs to be used to apply for the rights shares. The RE will be in the form of temporary demat securities that will expire if not used for the application or sold. To learn more about REs, see Rights Entitlements (RE) - FAQs
How to apply
Online application (ASBA)
You can use the Applications Supported by Blocked Amount (ASBA) process if your bank supports it.
Physical application form
The company's Registrar and Transfer Agent (RTA) will send you a Composite Application Form (CAF) via courier if you cannot apply online. You can submit the filled form at a Self-Certified Syndicate Bank (SCSB) branch. You can also download forms from the BSE and NSE websites by visiting bseindia.com/publicissue.html and nseindia.com/market-data/all-upcoming-issues-ipo.
Application form details
The rights issue details, such as the rights issue ratio and the book closure date, will be mentioned in the application form. You need to fill in the following details:
- Cheque/DD details (non-ASBA).
- Select NSDL if your DP starts with IN. Select CDSL if your DP ID is completely numeric.
- Your PAN number. If your account is a joint account, fill in the PAN of the second holder as well.
- Your DP details. (You can find your DP ID and beneficiary number under the profile section of Console).
- Your signature. (Both account holders must sign if it is a joint account).
Once you fill the form, submit it to any SCSB branch. You can find the list of banks on the application form. For a step-by-step guide on how to apply for a rights issue, visit tradingqna.com/t/how-do-i-apply-for-the-rights-issue-of-piramal-enterprises/33380/3.