Right shares worth Rs.80.68 Crore currently being offered in the market; earliest issue closes on November 17, 2019

Right Shares are the shares offered by the company to its existing shareholders at par value of Rs.100 per share, irrespective of the current market price of the share. This way, the issuing company is able to raise additional capital from the shareholders and the investors get an opportunity to increase the value of their investments at lower cost.

Right shares are offered as a ratio of the current capital of the company. For example, if the company is offering right shares at the ratio of 10:7, this means that 7 units are offered as right shares for every 10 units held by an investor. In the same way, the ratio can be represented in terms of percentage. In the example above 70% of the total paid up capital is offered as rights i.e. 70% of the investor’s holdings in that company are being offered as rights to him/her.

Although, rights seem to be an attractive offer from the company for the investors, not all investors subscribe for right issues resulting in under subscription of offered right shares. In this case, the unsold right shares are put up for auction by the issue managers of respective companies.

Currently in the market, the following companies have ongoing right issue:

Right issues of four companies are open for subscription by their existing shareholders. A total of 8,068,226 units of shares worth Rs.80.68 Crore are being offered as rights. Right issue of Samata Microfinance (SMATA) has the earliest closing date on November 17, 2019 followed by Srijana Finance (SFFIL) on November 22, 2019 and finally Lumbini General Insurance (LGIL) and NMB Laghubitta (NMBMF) on December 15, 2019.