REs can be bought in the open market. Also, RE has been issued by the company as per holding on the record date.
You need to apply for the Right shares using ASBA. your bank account will be debited by the value of the allotted quantity. Remember to give the same DP ID in which you have the right entitlement or REs. You don’t have to convert RE into equity shares. They will expire automatically whether you apply or not. Basically, RE in your DP ensures you get a minimum allotment of shares (=to the number of REs held). You may apply for more right shares than REs you have, but the allotment will depend on availability / pro rata.
Regarding arbitrage, Rights is available at 81 + value of right which is around 15.50-15.75 at this time. so that makes the cost of buying the share through rights = (81+15.75) 96.75 which the share is trading at 98.55 about. So yes, there is a 2% arbitrage here. But I won’t trade this for arbitrage only.
Disc: Neglible Holdings / Not a registered investment advisor
| Subscribe To Our Free Newsletter |
