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Issue of right shares


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ppt on issue of right shares in general study

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Issue of right shares

  1. 1. Issue of Right Shares<br />Manju Dhameja 28<br />
  2. 2. INTRODUCTION<br /><ul><li> MEANING
  4. 4. WHEN IT IS ISSUED</li></li></ul><li>THINGS TO CONSIDER BEFORE ISSUING<br /><ul><li>Engaging a Dealer-Manager or Broker Dealer to manage the Offering processes
  5. 5. Selling Group and broker dealer participation
  6. 6. Subscription price per new share
  7. 7. Number of new shares to be sold
  8. 8. The value of rights vs. trading price of the subscription rights
  9. 9. The effect of rights on the value of the current share
  10. 10. The effect of rights to shareholders of record and new shareholders and right holders</li></li></ul><li>THREE WAYS TO GO PUBLIC<br /><ul><li>IPO
  11. 11. NEW ISSUE
  12. 12. RIGHT ISSUE</li></li></ul><li>Procedure for issue of shares on rights basis in case of an unlisted company<br />Authorized share capital<br />Letter of Offer<br />Board's Approval<br />General meeting<br />Filing of resolution<br />Record Date/Book Closure<br />Drawing up list of members<br />Dispatching Letter of Offer<br />Collection and scrutiny of application forms<br />Allotment<br />Allotment Letter/Share Certificates<br />Regret Letters/Refund Orders<br />Entry in the Register of Members<br />
  13. 13. ADVANTAGES<br />Shares at a discounted Rate<br />Trading the rights on the market<br />Useful for Troubled companies<br />Companies with clean balance sheets use them <br />
  14. 14. BENEFITS OF ISSUING RIGHT SHARES<br />More control on existing shareholders<br />No loss to existing shareholder<br />No cost for issuing shares to public<br />Helpful to increase the goodwill of company<br />Capital formation<br />More scientific <br />
  15. 15. STEPS FOR ISSUING RIGHT SHARES<br />Right shares must be in ratio of equity shares <br /> of existing shareholders<br />2. Right Issue by 15 days notice<br />3. Right shares issue must not be opened more <br />than 60 days under SEBI guidelines.<br />
  16. 16. OTHER FACTORS TO CONSIDER IN RIGHTS ISSUES<br />Issue Costs<br />Shareholder reactions<br />Control<br />Unlisted companies<br />
  17. 17. CURRENT EXAMPLES<br />Religare Enterprises <br />Bampsl Securities <br />EIH<br />Central Bank of India <br />Zodiac Ventures Ltd <br />Brand Realty Services <br />Karnataka Bank <br />Lee & Nee Softwares (Exports) <br />Borax Morarji<br />Indo Asian Finan<br />Gayatri Projects<br />Ramsarup Industries <br />Muthoot Capital Services Rights Issue<br />
  18. 18. Thank You<br />