Reliance Industries Ltd (RIL) announced ₹53,215 crore ($7 billion) rights issue, with an aim to bring down the company’s debt. As part of the proposed rights issue, shareholders of Reliance will be offered one new share for every 15 held at ₹1,257 apiece. It’s the first right issue by India’s most valuable firm in three decades.
- A rights issue is an invitation to existing shareholders to a company to buy additional new shares.
- When a company needs funds for expansion, acquiring assets, or clear debts, the follow various options. Right issue is one of the options.
- A company may come out with a fresh batch of shares, but exclusively for the existing shareholders. What it means is that only shareholders on a given date, known as “record date”, will have the right to buy these shares.
