Rights Issue

  • Recently, Indian Oil Corporation (IOC) plans to raise capital through rights issue of equity shares as part of a government's plan to infuse capital into three state-owned fuel retailers to fund their net zero carbon emission projects.
  • A rights issue is an invitation to existing shareholders to purchase additional new shares in the company.
  • This type of issue gives existing shareholders securities called rights.
  • With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date.
  • The rights issued to a shareholder have value, thus compensating current shareholders for the future ....
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