Fund raising through rights gains currency following RIL mega issue

Regulatory tweaks aid momentum, with half a dozen firms launching or are in the process of issuing fresh equity shares through this route over the past month

Rights offering as a fundraising tool has gained currency following regulatory tweaks and success of Reliance Industries’ (RIL’s) record-breaking transaction. Over the past month, about half-a-dozen firms have launched or are in the process of issuing fresh equity shares through this route.

The Securities and Exchange Board of India’s (Sebi’s) move to make crucial changes to the rights issue framework has given an impetus to dealmaking through this route, say experts. 

Shortening the time period taken to complete the transaction, electronic application, and more importantly, allowing eligible shareholders to trade their rights entitlement (REs) are some of the tweaks that have given