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Right Issue

About of Service

Our services for a Rights Issue typically include:

  1. Structuring and Advisory:

    • Advising on the optimal structure of the Rights Issue, including determining the number of shares to be issued, pricing, and timing considerations.

  2. Regulatory Compliance:

    • Ensuring compliance with regulatory requirements, including drafting necessary documents and obtaining approvals from regulatory authorities such as SEBI (Securities and Exchange Board of India) or equivalent bodies.

  3. Documentation Preparation:

    • Drafting the Letter of Offer, prospectus (if required), board resolutions, shareholder notices, and other legal documents required for the Rights Issue.

  4. Offer Management:

    • Managing the offer process, including coordinating with printing and dispatching agencies for distribution of offer documents to shareholders.

  5. Investor Relations:

    • Facilitating communication with existing shareholders regarding the Rights Issue, providing clarification on terms, entitlements, and procedural aspects.

  6. Valuation and Pricing:

    • Assisting in the valuation of shares to be issued under the Rights Issue, determining the offer price, and ensuring fairness to existing shareholders.

  7. Subscription Management:

    • Managing the subscription process, including receiving and processing applications, handling refunds (if any), and ensuring compliance with timelines and regulatory requirements.

  8. Legal and Compliance Review:

    • Conducting legal due diligence, ensuring all disclosures are accurate and complete, and managing regulatory filings and approvals.

  9. Post-Issuance Compliance:

    • Advising on post-issuance obligations, including disclosures to stock exchanges, maintaining compliance with ongoing regulatory requirements, and managing shareholder communications.

  10. Conflict Resolution and Support:

    • Providing support in resolving any disputes or issues related to the Rights Issue, ensuring resolutions align with regulatory frameworks and shareholder interests.

Uses and Benefits
  • Structuring and Planning: Advising on the optimal structure of the Rights Issue, including determining the number of shares to be issued, pricing strategies, and timing considerations aligned with market conditions and regulatory requirements.
  • Regulatory Compliance: Ensuring full compliance with regulatory frameworks and guidelines set forth by authorities such as SEBI (Securities and Exchange Board of India) or equivalent regulatory bodies. This includes preparing and filing necessary documents and obtaining regulatory approvals
  • Documentation Preparation: Drafting comprehensive documents essential for the Rights Issue, such as the Letter of Offer, board resolutions, shareholder notices, application forms, prospectus (if required), and any legal opinions or due diligence reports necessary to support the issuance.
  • Offer Management: Managing the logistics of the Rights Issue process, including coordination with printing and distribution agencies for timely dissemination of offer documents to shareholders.
  • Investor Relations: Facilitating effective communication with existing shareholders regarding the Rights Issue. This includes providing clear explanations of entitlements, subscription procedures, and addressing shareholder queries to ensure transparency and confidence.
  • Valuation and Pricing: Assisting in the valuation of shares to be issued under the Rights Issue and determining the offer price in accordance with regulatory requirements and market conditions
  • Subscription Management: Overseeing the subscription process, including receiving and processing shareholder applications, managing refunds (if applicable), and ensuring adherence to timelines and regulatory obligations.

Select your own Associate

Charges Structure & Our Scope of Work

Additional Disclosure

  1. Purpose of the Rights Issue: Explain the reasons and objectives behind the Rights Issue. This could include raising funds for specific projects, reducing debt, funding acquisitions, etc.

  2. Details of the Rights Issue: Provide comprehensive details about the Rights Issue, including:

    • Number of shares being offered.
    • Issue price (if discounted, explain the basis of pricing).
    • Ratio of rights entitlement (e.g., 1 share for every 5 shares held).
    • Record date and ex-rights date.

  3. Rights Entitlement: Clarify how the rights entitlement has been determined, especially if it differs from a simple pro-rata basis.

  4. Use of Proceeds: Specify how the funds raised through the Rights Issue will be utilized. This information helps shareholders understand the intended application of their investment.

  5. Impact on Shareholders: Describe the impact of the Rights Issue on existing shareholders, particularly regarding dilution of their shareholding and voting rights.

  6. Regulatory Approvals: Disclose any regulatory approvals obtained or pending for the Rights Issue.

  7. Underwriting or Standby Arrangements: If applicable, provide details of any underwriting or standby arrangements in place for the Rights Issue.

Terms & Conditions

Documents & Detail Required

The documents required for a Rights Issue typically include:

  1. Board Resolutions:

    • Resolution passed by the board of directors approving the Rights Issue, specifying the number of shares to be issued, pricing, record date, and other pertinent details.

  2. Letter of Offer:

    • A formal document addressed to existing shareholders, detailing the terms and conditions of the Rights Issue, including the entitlement ratio, subscription price, and instructions for exercising rights.

  3. Prospectus (if required):

    • In some jurisdictions or for certain types of securities, a prospectus may be required to be filed with regulatory authorities and provided to shareholders. It includes detailed information about the company, its operations, financials, and the Rights Issue.

  4. Shareholder Notice:

    • Notice to shareholders informing them about the Rights Issue, including the entitlement ratio, subscription price, record date, and other relevant details. This is typically sent along with the Letter of Offer.

  5. Application Form:

    • Form provided to shareholders for subscribing to additional shares under the Rights Issue. It includes fields for specifying the number of shares to be subscribed and details of payment.

  6. Board and Shareholder Resolutions:

    • Resolutions passed by both the board of directors and shareholders approving the Rights Issue, especially if it involves changes to the company's capital structure or articles of association.

  7. Legal Opinions and Due Diligence Reports:

    • Legal opinions confirming compliance of the Rights Issue with applicable laws and regulations. Due diligence reports may also be included to verify the accuracy of disclosures made in the Letter of Offer and other documents.

  8. Regulatory Filings and Approvals:

    • Filings with regulatory authorities such as SEBI (in India) or equivalent bodies, along with obtaining necessary approvals as per regulatory guidelines.

  9. Financial Statements and Valuation Reports:

    • Financial statements of the company, including audit reports, balance sheets, and profit and loss statements. Valuation reports may be required if new shares are issued to determine the offer price.

  10. Other Legal and Compliance Documents:

    • Any other documents specific to the jurisdiction or regulatory requirements governing Rights Issues, including certificates, declarations, and compliance statements.

Please Note Down Your Querie

OUR REVIEW

FAQ'S

What is a Rights Issue?

A Rights Issue is a method by which a company raises additional capital by offering existing shareholders the right to purchase new shares at a predetermined price, usually at a discount to the market price.

Why do companies conduct Rights Issues?

Companies conduct Rights Issues to raise capital for various purposes such as funding expansion plans, reducing debt, financing acquisitions, or strengthening their balance sheet.

How does a Rights Issue work?

Existing shareholders receive rights entitlements based on their current shareholding. They have the option to exercise these rights by subscribing to new shares at the offer price during a specified subscription period.

Who is eligible to participate in a Rights Issue?

Shareholders who are on the company's record date are typically eligible to participate in the Rights Issue. The number of rights entitlements they receive is proportional to their existing shareholding.

What is the offer price in a Rights Issue?

The offer price is the price at which new shares are offered to existing shareholders during the Rights Issue. It is usually determined based on market conditions, regulatory requirements, and the company's financial position.