What is a Right Entitlement?
Rights Entitlements (REs) are temporary demat securities that represent your eligibility to apply for the rights issue. Exchanges have allowed trading in the REs, and you may also sell the REs like you sell stocks from your holdings .
These REs are not rights shares by themselves and need to be used to apply for the rights shares. If you do not sell the REs or use them to apply for rights , they will lapse worthless.
The REs credited to your demat account will not be visible in Kite holdings till the RE trading period has started.
You will not be able to transact the REs intraday as they are settled on a trade-to-trade basis. STT at 0.05% of the value of RE is levied on the seller of the RE.
Click here for FAQs on RE.
Note : Premium paid to acquire the rights entitlement will not be included in the calculation of the buy average of the partly-paid shares purchased using RE’s through the rights issue.