Posting this for 2nd Time as myquery remains unanswered

sivaram (Asst Mgr-Taxation) (6918 Points)

25 February 2011  

May I request Practising Company Secretaries to answer so that a layman like me can understand if possible with numerical examples

 

Suppose I hold shares in Public Ltd Co say 100 shares.I have been offered 20 Rights Share what and all options are possible from my side

 

1.I can subscribe for it as the company sends Form which would be less than Market Price

 

2. I need not Subscribe-Then what happens to my Quota  say to that 20 Rights Share-Is it called Renounciation then what the issuing company will do will it reverse the original share issue entries

 

3.Selling Rights How it is done -First should I subscribe and then only can i sell  or I can sell without subscribing for it ?pl clarify

 

In short I want to know what are the options available to existing shareholder

 

4.What happens in the Market when Rights shares are announced to existing shareholders will market price go up or down

 

5.What is meant by Ex Rights and Cum Rights .How will I come to Know whether Rights are ex or cum please explain with numerical examples in a practical scenario in simple wordings so that i can understand this concept

 

Thanks in advance