Rights issue: Arunjyoti Bio Ventures shares to trade ex-rights today

Shares of Arunjyoti Bio Ventures Ltd will be in focus when the stock market opens on March 12 (Tuesday).

The Board of Directors of Arunjyoti Bio Ventures has declared a rights issue of equity shares for its eligible shareholders.

The company has fixed March 12, 2024 as the record date for the purpose of determining the eligibility of equity shareholders to receive the rights entitlement in the rights issue.

In a stock exchange filing, Arunjyoti Bio Ventures Ltd said the Board of Directors declared the rights issue of “Fully paid-up Equity Shares of face value of Rs. 10/- each (“Rights Equity Shares”).”

According to the exchange filing, the total number of rights equity shares to be issued is 165,67,200 fully paid-up equity shares and the issue price has been fixed at face value of ₹10 each at ₹20 per share (including ₹10/- as premium per share).

The rights issue size is ₹3,313.44 lakh.

Shares of Arunjyoti Bio Ventures Ltd will trade ex-rights on Tuesday.

Arunjyoti Bio Ventures Ltd stock closed at ₹246.30, up 4.99 per cent, on Monday.

What is the rights issue of equity shares?

Companies declare rights issues to raise additional funds.

In the rights issue, companies grant existing shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. This type of issue gives existing shareholders securities called rights. 

The companies give shareholders a chance to increase their exposure to the stock at a discount price.

In a rights issue, because more shares are issued to the market, the price of the stock is diluted and will likely go down.

Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way that they would trade ordinary shares.