Rights Issue Record Date

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The record date for the rights issue is the date announced by the company to determine the shareholders who are eligible to receive rights entitlements.

The record date for rights issue is the cut-off date as on which a company takes out a list of existing shareholders holding the stock of the company to determine the eligible shareholders for the rights issue.

The right issue record date is announced well in advance by the company through the Letter of Offer. Only the shareholders who are on record of the company as on the record date will be eligible for the rights entitlements of the company to apply the rights share.

Example: A company announces to issue 2 rights shares for every 15 shares held to eligible shareholders with record date fixed as 17th August.

In the above scenario, to qualify as an eligible shareholder, one must have the shares of the company in their Demat account as on 17th August.

Answered on

Frequently Asked Questions

  1. 1. What is the rights issue record date?

    A rights issue record date is the cut-off date on which the company takes out the list of all its existing shareholders to determine the eligible shareholders qualifying to receive the rights entitlements to apply for rights share.

     

  2. 2. Can I buy shares on record date to be eligible for rights issue?

    No, you will not be eligible for the rights issue if you buy the shares on the record date.

    A person needs to be on the record of the company as on record date to qualify as an eligible shareholder. If you buy the shares on the record date, the shares will get credited to your Demat account on T+2 and thus you will not own shares of the company as on record date. Thus you should buy the shares two days before the record date to be eligible for the rights issue.

    For example, if a company fixes 28th August as the record date, you should buy the shares latest by or before and not later than 26th August so that you receive the credit of shares in your Demat account by 28th August to qualify for the rights issue.

     

  3. 3. Can I get the rights issue if I sell the shares on record date?

    Yes, you will be eligible for the rights issue even if you sell the shares on the record date.

    If you sell the shares on the record date, you would still own the shares of the company in your Demat account as on record date as these will be debited from your account post the record date.

     

  4. 4. Who is an eligible shareholder for the rights issue?

    An eligible shareholder is the one who owns the shares of the company as on record date to qualify for the right issue. The rights shares are offered to such eligible shareholders by way of rights entitlements.

     


1 Comments

Nel
1. Nel  Dec 22, 2020 00:37 I Like It. | Report Abuse Reply
What if Ex date is Jan 8 and record date is jan 13?Can i sell all my shares on or after ex date?still can i avail the SRO?or Need to hold until record date Jan 13?TIA








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