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How to Apply for Rights Issue Online? – Bank or Demat a/c or RTA Website

How to Apply for Right Issue Online

What does Rights Issue mean for Shareholders?

In this article, we are going to discuss “How to Apply for Rights Issue online?”. Before we go deeper, Let’s look at what is a Rights Issue (i.e. RI).

The rights issue (rights offering) of shares is fundamentally a way through which a listed company on the stock exchange raises extra funds. It is an invitation to the existing shareholders to buy extra new shares in the company.
A rights offering gives preferential treatment to existing shareholders.
They are given the right, NOT obligation, to purchase the shares before a particular date.
However, it does not mean that a shareholder can purchase unlimited shares.

Also Read Rights Issue Advantages and Disadvantages – Is Rights Issue Good or Bad in 2022?

Let’s say you own 100 shares in XYZ Company, each of which is worth INR 100/-.
XYZ company announces a rights issue to existing investors at a price of INR 90/- each. But this issue is a 2:10 rights issue. In other words, for every 10 shares you hold, the company is offering you another 2 at a deeply discounted price of INR 90/.

There are three approaches to applying for these rights – Two are online (ASBA Facility/Demat Account and RWAP facility) and one is an offline approach.

Also Read What is a Rights Issue of Shares? | Rights and Bonus Issue | Example | Eligibility | Types

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Offline

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  • Shareholders need to fill up the request form received from the company. As an alternative, investors can download the request form from the websites of the exchange/company/registrar.
  • Shareholders are usually needed to furnish their details which include depository details, PAN No., and, bank account number.
  • The duly filled up and signed request form is required to be submitted physically to the designated branch of SCSB i.e. Self-Certified Syndicate Banks.
  • Once the applications are processed, SCSB blocks the application amount in the applicant’s account.

Also Read How to Buy Capital Gain Bonds Online or Offline? | Allotment Status |

The process of applying for a rights issue is through a Bank account (i.e. ASBA Applications Supported by Blocked Amount). If your bank supports it, you can apply online just like an IPO.
Most large banks including HDFC Bank, ICICI Bank, SBI, Kotak Mahindra Bank, and Axis Bank have enabled applications via net banking platforms 
Let’s take an example to understand the process of buying the rights issue through the State Bank of India.

Also Read What Happens to Share Price after Rights Issue?

How to Apply for Rights Issue Online?

Time needed: 5 minutes.

To apply online, you need to follow the steps mentioned below.

  1. Login

    Enter www.onlinesbi.com URL in the web browser and Click on Personal Banking login.

  2. Go to the e-Services menu

    Go to Demat Services and ASBA Services Option

  3. IPO

    Select IPO in Demat & ASBA section

  4. Accept

    Click on accept after reading the details to apply in IPO

  5. Category

    Select your category from the dropdown menu

  6. Ongoing IPO

    Now select the ongoing IPO and click on Go button.

  7. Applicant

    Please review all the details and select an applicant

  8. Add New Applicant

    Please click on Add a new applicant in case an applicant has not been registered

  9. Profile Password

    To add a new applicant – Please provide your profile password and click on submit.

  10. Applicant Details

    Please fill applicant’s name, PAN card number & depository.
    For NSDL customers enter – DP ID, Client ID and Nick Name.

  11. Review

    After reviewing all the details please click on confirm button.

  12. OTP

    Please enter the OTP received on your registered mobile number and click ‘Confirm’

  13. Successfully

    Your request for adding an IPO applicant will be registered successfully.

  14. Select Registered Applicant

    Now go back to apply IPO screen and select the registered applicant

  15. Select Applicant

    The select nickname of the applicant which you have entered while registering your NSDL/CDSL account and click on GO.

  16. Quantity and Price

    Details will be auto-filled after selecting the applicant – just enter the quantity, and price & click on submit.

  17. OTP

    An OTP will be sent to your registered mobile number. Please enter the OTP and click confirm

  18. Review Details

    Please review all the details and click on confirm

  19. Status

    Your request for IPO will be registered and a lien will be market successfully on your account for the BID value.

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How to Apply for Rights Issue through ICICIdirect?

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  1. Login to ICICIdirect.com
  2. Go to ‘Trade & Invest’ >>  IPO/FPO/BUYBACK. This will show the list of Rights Issue’s available.
  3. Click ‘Go’ (in the last column) on the Right Issue you would like to apply for.
  4. Fill in the quantity and price and click ‘Submit’.
  5. Confirm the application by accepting the terms & conditions. Click ‘Confirm’.
  6. Allocate the required fund and click ‘Submit’.
  7. Check the order book for application no. and status.

Also Read Applying IPO Online using SBI YONO Lite | Eligibility | New User Registration | Cut-off price | IPO Allotment

RTA Website

  1. You may also submit an online application through the RWAP application that can be accessed at https://rights.kfintech.com/
  2. Here click on the tab and apply for the Rights issue through RWAP.
  3. It will then ask for shareholder details like PAN card number, DP ID, Folio no, etc. You will have to fill this online.
  4. And then you have to make payment through Net Banking/UPI.
    However, remember in UPI there is a limit of 2 lacs
  5. The amount will be debited from your bank immediately for every share applied.

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