Rights Entitlements (REs) Issued in March 2026 – What Investors Should Know

Whenever a company announces a rights issue, it offers its existing shareholders an opportunity to purchase additional shares usually at a price lower than the current market price. The number of shares you can buy depends on how many shares you already hold.

If you are eligible on the record date, you receive Rights Entitlements (REs) directly in your demat account. These REs are temporary securities that give you the right to apply for additional shares, but not the obligation. Importantly, they can also be sold in the market during the trading window.

What are Rights Entitlements (REs)?

A Rights Entitlement (RE) is a short-term instrument issued to existing shareholders when a company launches a rights issue.

Here’s what this means for investors:

• Credited to your demat account: If you are eligible, REs will automatically appear in your demat account.

• Represents eligibility: They indicate how many additional shares you are entitled to apply for at the issue price.

• Tradable: REs can be bought or sold on the stock exchange during a limited trading window.

• Temporary: If you do not use or sell them before the deadline, they automatically expire.

In simple terms, REs provide flexibility - you can participate in the rights issue, sell the entitlement, or ignore it.

What can you do with your REs?

If REs are credited to your demat account, you have three options:

1. Apply for the rights shares

You can use your REs to subscribe to additional shares at the rights issue price announced by the company.

2. Sell the REs on the exchange

If you do not wish to invest more in the company, you can sell your REs in the market during the trading period.

3. Take no action

If you neither apply for shares nor sell the REs within the specified timeline, the REs will lapse and become worthless after the issue closes.

Quick example

Suppose a company announces the following:

• Issue ratio: 1 share for every 5 shares held

• Issue price: ₹64 per share

• Current market price: ₹118 per share

If you hold 50 shares, you may receive 10 REs based on your eligibility.

You can then choose to:

• Apply for 10 shares at ₹64 each,

• Sell the 10 REs in the market, or

• Let them expire if you take no action before the deadline.

Final takeaway

Rights entitlements are designed to give existing shareholders a fair opportunity to maintain or increase their ownership in a company at a preferential price. At the same time, they offer flexibility, allowing investors to participate in the issue or monetize their entitlement by selling it in the market.