Buying Right shares - help

Vishwanarth · 1 Buying Right shares - help Fri Dec 11, 2020 5:06 pm

Vishwanarth

Senior Manager - Equity Analytics

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Join date : 2020-11-01

I have never subscribed to right issues. If someone can tell what the procedure to buy right shares in this Covid19 situation it is very helpful to persons who new to it.
For example :Renuka Holding right issue is under going. Their Xright date was 26 November.
Trade commencement date of Right is 8 December
Date of renouncing to CSE 15 th December
Last date of acceptance and payment 16th.

Since Covid19 all documents are exchanged over online platforms. Directfn provides Rights buy sell at 20 cents, 30cent, 40cent etc.

What is the meaning of above dates?
If you buy RHL. R0000 stocks 1000 nos at 30 cents what is next?
You can pay for 1000 right shares with Buying power?
Though you bought 1000 rights at 30 cents if you missed to pay what will happen?
Thanks in advance

xhora · 2 Re: Buying Right shares - help Fri Dec 11, 2020 5:44 pm

xhora

Senior Manager - Equity Analytics

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Age : 36
Location : Colombo

There are two types of rights for RHL

RHL.R0000 --> Convert to Voting share RHL.N
RHL.R0001 --> Convert to Voting share RHL.X

if you buy 1000 RHL.R0000 from the market at 0.3 you have 3 options

1. Keep them until 16th December and send a mail to your broker saying you need to subscribe to RHL.R0000 and tell him to dedcut the rights price of 14 from your account and convert these to RHL.N shares in tis case your cose per share will be [0.3*1.0112 + 14 = 14.3] since RHL.N trade at 15 in this way you would make a gain of 4.8%

2. You can try to sell RHL.R0000 at higher price than you buy and make a capital gain if you can sell at 0.4 gain will be 30%

3. If you just buy and do nothing of the above on 16th the rights will expire and you will loose everything you invested in this

Vishwanarth · 3 Re: Buying Right shares - help Fri Dec 11, 2020 5:55 pm

Vishwanarth

Senior Manager - Equity Analytics

Posts : 427
Equity Stars : 1948
Reputation : 4
Join date : 2020-11-01

@xhora
Thanks alot for your kind detailed clarification..

As per option 1 if I am going to buy, I don't have to send mandatory separate payment by bank deposit or fund transfer to or I can ask broker to do it with my Buying power in Directfn?

Thanks you...
Good luck