Teller wrote:This is from insider information. No source available to prove it . So decision is yours. I am also holding this share but sold most above 70/-
why company go for the Right issue
increase share holder capital or maybe increase liquidity and expand.
COCR can used debenture to expand the business and attract new deposits from new investor.
Example
CSF - before right issue they had minus assets. then they went for Right Issue
OSEA - Right issue. expand the business. they cannot go for debenture. they cannot pay 14-16% year interest and build new building ..... no point debenture for them.
for finance company debenture is good idea bcz they can replace it loans for customer and get another 8-10% easily. at the same time the can borrow more money and expand the business....