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Where can one find information related to REs
The investors can get information related to REs in the letter of offer filed by the issuer company with Stock Exchanges. The letter of offer is also available on RTA website under sections Home Investoer Rights Issues The investors are advised to read the letter of offer carefully.
What is the process to be followed by a shareholder holding shares in a physical form, for credit of Rights Entitlements and applying in the Rights Issue
Physical shareholders shall be required to provide their demat account details to Issuer / Registrar to the Issue for credit of REs not later than two working days prior to the issue closing date, such that credit of REs in their demat account takes place at least one day before the issue closing date. This is to ensure that applications made by the shareholders are not rejected due to non-availability of REs in their demat account, as on issue closing date.
Shareholder are required to make the application on or prior to the Issue closing date. Application will be considered only if REs are in the demat account furnished.
What is the procedure for making plain paper application and where can the plain paper application be submitted
An Eligible Equity Shareholder who is eligible to apply under the ASBA process may make an Application to subscribe to the Issue on plain paper. An Eligible Equity Shareholder shall submit the plain paper Application to the Designated Branch of the SCSB for authorising such SCSB to block Application Money in the said bank account maintained with the same SCSB. Applications on plain paper will not be accepted from any address outside India.
Please note that the Eligible Equity Shareholders who are making the Application on plain paper shall not be entitled to renounce their Rights Entitlements and should not utilize the Application Form for any purpose including renunciation even if it is received subsequently.
Can the broker collect the application form and submit the application
No
Can an application be made by visiting the Company, Registrar and Global Co-ordinators
No
Can an application be made by cash / cheque
No
Can an application in the rights Issue be made using third party bank account
Investors can make payment only using bank account held in their own name. Applications made with payment using third party bank accounts are liable to be rejected.
What will happen if Rights Entitlements REs are purchased through On market renunciation / Off market renunciation, and no application is made for subscribing the shares / other securities offered under Rights Issue
If no application is made by the purchaser of REs on or before Issue closing date then such REs will get lapsed and shall be extinguished after the Issue Closing Date. No shares / other securities for such lapsed REs will be credited, even if such REs were purchased from market and purchaser will lose the premium paid to acquire the REs.
Persons who have bought Rights Entitlements REs, shall require to make an application and apply for shares / other securities offered under Rights Issue, if they want to subscribe to the shares / other securities offered under Rights Issue.
Whether any persons who are not existing shareholders of the issuer company as on record date, can apply to the Rights Issue
Yes. Persons who have bought Rights Entitlements REs through On market renunciation / Off market renunciation, are eligible to apply for the shares / other securities offered under Rights Issue to the extent of the REs available in their demat account.
What happens to Rights Entitlements REs which are neither subscribed nor renounced on or before the Issue Closing Date
Rights Entitlements REs which are neither subscribed nor renounced on or before the Issue Closing Date shall lapse and shall be extinguished after the Issue Closing Date.
What is the process of on market and off market renunciation
a On Market Renunciation
The Investors may renounce the Rights Entitlements, credited to their respective demat accounts by trading/selling them on the secondary market platform of the Stock Exchanges through a registered stock broker in the same manner as trading / selling Equity Shares of the Company.
b Off Market Renunciation
The Investors may renounce the Rights Entitlements, credited to their respective demat accounts by way of an off-market transfer through a depository participant. The Rights Entitlements can be transferred in dematerialised form only.
Eligible Equity Shareholders are requested to ensure that renunciation through off- market transfer is completed in such a manner that the Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.
How are Rights Entitlements REs issued
Rights Entitlements REs are issued in dematerialised form under a separate ISIN created by the Company.
What are the options available to an Eligible Equity Shareholder in rights Issue
Eligible Equity Shareholder can
apply for their Rights Equity Shares to the full extent of their Rights Entitlements or
apply for their Rights Equity Shares to the full extent of their Rights Entitlements and apply for additional Rights Equity Shares or
apply for their Rights Equity Shares to the extent of a part of their Rights Entitlements without renouncing the other part or
apply for Rights Equity Shares to the extent of a part of their Rights Entitlements and renounce a part / rest of their Rights Entitlements or
renounce their Rights Entitlements in full.
What is Rights Entitlement RE
Rights Entitlement RE is the rights issued by the company to the existing shareholders to subscribe to the new shares / other securities that the shareholder of a company is eligible to apply for under the rights offer. REs are offered to shareholders based on a ratio of existing equity shares held as on the record date.
Can I apply for additional shares in the rights issue apart from my entitlement
Yes, applicants can apply for any number of additional shares but the allotment of the same will depend on shares available for apportionment and will also be in proportion to your holding, irrespective of additional shares applied by applicants.
What is a right Issue
Issue of Shares to existing shareholders as on record date is called a Rights Issue. The rights are offered in a ratio to the number of shares or convertible securities held by the shareholder as on the record date.
Who can I approach for further information or clarifications in the matter?
Your share broker can be of assistance to you. The Registrars and Transfer Agents (for SFS, it is Link Intime, Delhi) will also be happy to provide any clarifications. Their contact details are given below;
Do you have to keep any minimum balance of securities in your account?
A de-mat account can be opened and maintained even with Nil balance.
How long would it take my account to be credited when I submit my shares for dematerialisation?
Your account will be credited typically in 15-21 days.
What should an investor do to open a de-mat account?
The process of opening a de-mat account is similar to opening a bank account.
a. Investor has to first choose a DP based on his convenience and the DP’s charges.
b. Besides submitting an application in the prescribed form, the intending de-mat account holders, including joint holders, if any, should personally visit and submit the following to the DP, • A photocopy of the PAN card along with the original for verification by the DP. • Address proof such as passport, Voter ID Card, ration card, driving license, bank passbook. Verified copies of Telephone bills (not more than two months old), Electricity bills (not more than two months old) etc.
c. Before opening the de-mat account, the investor will have to execute an agreement on a stamp paper to be provided by the DP, which defines the rights and obligations of both, the investor and the DP.
d. On opening a de-mat account, a unique BO ID (Beneficial Owner Identification) Number is allotted, which should be quoted in all future transactions.
How do you de-mat your shares?
In order to de-mat your shares/certificates, you have to fill in a Dematerialisation Request Form in triplicate along with the relevant details and submit the same to your DP along with the certificates to be dematerialised. The combination of names in the shares must be same as that in the account.
What are the benefits of having a Demat account?
• The depository system reduces risks involved in holding physical certificated, e.g., loss, theft, mutilation, forgery, etc.
• It ensures transfer settlements and reduces delay in registration of shares.
• It ensures faster communication to investors.
• It helps avoid bad delivery problem due to signature differences, etc.
• It ensures faster payment on sale of shares.
• No stamp duty is paid on transfer of shares.
• It provides more acceptability and liquidity of securities.
• Facility to pledge and hypothecate your securities available.
How does the Depository System operate?
The Depository System functions very much like the banking system. Depository holds securities in accounts for its clients and transfers securities between accounts. The transfer of funds or securities happens without the actual handling of securities. Depositories are accountable for the safe keeping of securities.
What is Dematerialization?
Dematerialization is a process by which physical certificates of an investor are converted into electronic form and credited to the account which he/she opens with a Depository Participant (DP). An investor will have to first open an account with a Depository Participant and then request for the dematerialization of his share certificates through the Depository Participant so that the dematerialized holdings can be credited into that account. This is very similar to opening a Bank Account.
Who is a Depository Participant?
Depository Participant (DP) is described as an agent of the depository. They are the intermediaries between the depository and the investors. They hold securities of investors and intimate them the status of their holding from time to time.
What is a Depository?
A Depository (NSDL & CDSL) is an organization like a Central Bank where the securities of a shareholder are held in the electronic form at the request of the shareholder through the medium of a Depository Participant.
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How to withdraw an Application made through ASBA platform?
An Investor who has applied in this Issue may withdraw their Application at any time during Issue Period by approaching the SCSB where application is submitted. However, no Investor applying through ASBA facility may withdraw their Application post the Issue Closing Date.
