A Rights Issue of shares is a strategic move by a company to invite its current shareholders to buy more shares at a fixed price.vIt allows the company to secure additional funds, which can be channeled into growth, debt reduction, or other financial needs. It allows existing shareholders to preserve their proportional ownership and potentially capitalize on the company’s future success. Rights Issues represent a vital aspect of corporate finance and offer a win-win opportunity for both the company and its investors.
Types of Right Issues in India
1. Renounceable Rights Issue
2. Non-Renounceable Rights Issue
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