Yes. SEBI has made rights entitlements (REs) tradeable on the stock exchange. This means if you don’t want to subscribe to a rights issue, you don’t have to let your entitlement lapse you can sell it on the exchange and receive value for it.
How does it work?
When a rights issue opens, your entitlement is credited to your DEMAT account as a temporary instrument – the Rights Entitlement (RE). This RE can be bought and sold on the exchange during the trading window, just like a regular share.
If you sell your RE, the buyer can use it to apply for the rights shares at the offer price.
What if you want to subscribe to more than your entitlement?
You can buy additional REs from the market and apply for more rights shares than your original entitlement allows — subject to the company’s terms.
What happens to unsold or unexercised REs?
If the RE is neither subscribed nor sold before the deadline, it lapses automatically. Once the trading and subscription window closes, the RE has no value.
Easy & quick
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