Who can apply for rights issue?

The existing shareholders and renouncees can apply for the rights issue.

The rights are offered to the existing shareholders who are on the records of the company as on a cut-off date known as a record date fixed by the company. The company credits the rights entitlements (RE) to their Demat account which needs to be applied to get the rights share.

In case, the existing shareholders are not willing to subscribe to the rights, he/she can transfer or sell their RE to outsiders on the exchange floor. The buyers of these RE are known as renouncees who are then eligible to apply for a rights issue in the proportion of the RE bought.