A Rights issue is an invitation to a company's existing shareholders to buy additional shares in proportion to their existing shareholding at a discount in lieu to the current market price of the equity.
Right issue gives existing shareholders opportunity to buying additional shares before others,it's a means used by company's to raise additional capital. Raising additional capital does not necessarily mean that their ''going concern principle'' is been threatened,it might be for acquisition &growth purpose or to fund a capital project which conforms with the company's vision statement.
A right issue can also be called right offering and when announced by a company ,the purchase on right issue will only be for a specified period as the price is been discounted to the benefit of existing shareholders.
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