When a rights issue opens, eligible shareholders can apply through the ASBA (Application Supported by Blocked Amount) process. Your application amount is blocked in your bank account and only debited if your application is accepted. How to apply Check your entitlement – Your rights entitlement (RE) will appear in your […]
How Is the Price of Rights Shares Determined?
The price of rights shares is fixed by the company’s board of directors before the issue opens. It is always set below the current market price this discount is what makes the offer attractive to existing shareholders. The board decides the offer price based on the current market price and […]
What Happens If I Do Not Subscribe to the Rights Issue?
If you choose not to subscribe, your existing shares remain untouched. However, your ownership percentage in the company dilutes slightly because new shares are issued to those who do subscribe, increasing the total share count while yours stays the same. If you don’t subscribe or renounce your entitlement before the […]
Can I Renounce My Rights Shares?
Yes. If you don’t want to subscribe to a rights issue, you have the option to renounce your entitlement either fully or partially in favour of someone else. Renouncing means transferring your rights entitlement to another person. That person can then apply for the shares in your place at the […]
How Do I Know If I Am Eligible to Apply for Rights Shares?
Eligibility is determined by the record date set by the company the same way it works for dividends and bonus issues. If you hold shares in your DEMAT account as of the record date, you are eligible to apply for rights shares in proportion to your holding on that date. […]
What Is a Rights Issue?
A rights issue is when a company offers its existing shareholders the option to buy additional shares at a price lower than the current market price. It is one of the ways a company raises fresh capital from its existing investor base — without going to outside investors first. The […]
How Do I Know If My Holdings Are Adjusted Correctly After a Split?
The adjustment happens automatically on the ex-date, you don’t need to do anything. But it’s worth knowing what to check to confirm everything has reflected correctly. What to look for After the ex-date, log in to your Samco account and check: Share count — Should have increased (split) or decreased […]
Why Do Companies Split or Consolidate Their Shares?
Both actions serve a specific purpose and they’re not cosmetic changes. The reason behind each is quite different. Why companies split When a stock price rises significantly over time, it can become too expensive for smaller investors to buy even a single share. A split brings the price down to […]
What Is a Reverse Stock Split (Consolidation)?
A reverse stock split is the opposite of a stock split. Instead of dividing shares, the company merges multiple shares into one increasing the face value and reducing the share count proportionally. The total value of your holding remains the same. How it works In a 1:2 reverse split, every […]
What Is a Stock Split?
A stock split is when a company reduces the face value of its shares, which increases the number of shares in circulation proportionally. The total value of your holding doesn’t change, only the face value, share count, and market price adjust. A split is expressed as a ratio. In a […]
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