What is rights issue of shares?

A rights issue is a way companies raise additional capital by offering new shares to existing shareholders. These shares are usually offered at a discounted price compared to the current market price and shareholders are given the "right" to buy them in proportion to their existing holdings.

Shareholders are offered the rights entitlement, to buy new shares at a discounted price, within a specified period. If an eligible shareholder wants to apply for shares in the rights issue, they can choose one of the following options:

1. Apply for all the shares based on their full Rights Entitlement.
2. Apply for some shares based on part of their Rights Entitlement, without giving up the remaining part.
3. Apply for some shares based on part of their Rights Entitlement and give up the remaining part (renounce it).
4. Apply for all the shares based on their full Rights Entitlement and also apply for additional shares beyond their entitlement.
5. Give up all their Rights Entitlement (renounce it completely).