It seems like the promoters want to subscribe to the rights issue and increase their shareholding. Given that the CMP is lower than the rights price no one will subscribe and promoters will take the entire qty. We will come to know more about this when they file a Draft Letter of Offer for the rights issue with SEBI.
The second hint on the above rationale could be that the Board of Directors that approved the rights issue wouldn’t have passed the resolution unless they were confident that the rights issue would succeed.
What confuses me is that there are other ways to increase shareholding like Pref or warrants. Why didn’t the promoters opt for that unless there are some tax implication i am missing.
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