In most mergers and amalgamations in India, you don’t get to choose. The consideration whether shares, cash, or a combination is predetermined by the deal structure and applies equally to all eligible shareholders. If the deal includes a cash component, it is fixed and disclosed upfront. In a pure amalgamation, […]
Will I Receive New Shares of the Merged Company?
In most mergers and amalgamations, yes your existing shares are replaced by shares of the merged or surviving entity based on the swap ratio announced. How the swap works The swap ratio defines how many shares of the new company you’ll receive for every share you hold in the original […]
How Does a Merger Affect My Shares?
When a merger or amalgamation is announced, your existing shares in the target or merging company will eventually be replaced, either by shares of the new or surviving entity, or by cash, depending on the deal structure. What changes Your original shares are cancelled once the merger is approved and […]
What Is a Merger or Acquisition?
A merger is when two companies combine to form a single entity. An acquisition is when one company purchases another and takes control of it. Both are corporate actions that directly affect shareholders of the companies involved. Merger In a merger, shareholders of both companies typically receive shares of the […]
Can Rights Shares Be Traded in the Market?
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 […]
How Do I Apply for Rights Shares Through My DEMAT Account?
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. […]