← Glossary
Rights Issue
An offer letting existing shareholders buy additional new shares, usually at a discount to the market price and in proportion to what they already hold.
A rights issue is how a company raises fresh capital from its existing shareholder base rather than borrowing or issuing shares to new outside investors. It's announced with a ratio (e.g. one new share for every five held) and a subscription price, typically below the current market price as an incentive to subscribe.
Shareholders who don't subscribe still keep their existing shares, but their percentage ownership gets diluted as new shares enter circulation — and PSX-listed companies' rights entitlements can themselves be traded separately during the subscription window.