iTechGuides is reader-supported. When you buy through links on our site, we may earn an affiliate commission. As an Amazon Associate I earn from qualifying purchases. Learn more
In India, a rights issue gives eligible existing shareholders a proportional opportunity to buy additional shares, while a public issue invites investors generally. A rights offer is tied to a record date, entitlement ratio and letter of offer. A public issue is made through a prospectus or red herring prospectus and may be an IPO by an unlisted company or an FPO by a listed company. If you already own shares, a rights issue creates a choice—subscribe, renounce the entitlement where the terms allow, or do nothing and potentially accept dilution. Neither eligibility nor a discounted issue price makes an investment suitable automatically.
Rights issue and public issue: the short answer
The audience is the fundamental difference. A rights issue is directed to shareholders who meet the issuer’s record-date conditions. The number of shares they may apply for is calculated from their existing holding using the stated entitlement ratio. A public issue is open to public investors under the conditions in the offer document; an applicant does not receive a pro-rata right merely because they already own shares.
This article uses Indian terminology and rules. The governing framework is primarily the Securities and Exchange Board of India (SEBI) regulations, stock-exchange procedures and the Companies Act, 2013. A different country may use the same words for materially different processes, taxes or shareholder rights.
Free tools Windows power users keep installed
One-click scans. No signup required.
Rights issue explained
Who receives the offer
The issuer fixes a record date. A person who is a shareholder on the relevant terms can receive a rights entitlement. The offer document states the eligibility conditions, the ratio and the dates that control the entitlement. Being a shareholder before an announcement is not enough if the person is not eligible on the record date or if the shares are held in a way covered by different operational instructions.
#1 Best Overall
- Read Before You Buy — No Video Output: These adapters support charging and USB 2.0 data transfer, but cannot transmit video signals. Except for standard USB webcams (which use USB data only), they are not compatible with HDMI/DisplayPort cables, video-capable USB-C hubs, or docking stations with video output.
- Convert USB-A Ports to USB-C: Designed to connect USB-C earphones, cables, flash drives, card readers, and other USB-C accessories to standard USB-A ports. Plug-and-play with no drivers or software required.
- Aluminum Alloy Housing: Built with a sturdy aluminum alloy shell that aids in heat dissipation and protects against daily wear and scratches. Designed to maintain a stable and secure connection.
- Compact & Travel-Friendly: The ultra-compact design allows the adapter to stay plugged into your device without blocking adjacent ports or adding bulk, reducing wear and tear on your original USB ports.
- 12-Month Warranty: Backed by a 12-month manufacturer warranty for peace of mind. Designed to meet strict quality control standards for reliable everyday performance.
How the entitlement is sized
The ratio is expressed against the qualifying holding. For an illustrative, not predictive, example, a 1-for-5 offer would give one right for every five eligible shares, subject to the issuer’s rounding and other terms. A shareholder with 500 eligible shares might therefore receive an entitlement calculated at 100 shares. The actual ratio, treatment of odd lots and maximum application are determined only by that issue’s letter of offer.
The entitlement is an opportunity, not a free share. Applying for all or part of it requires payment at the issue price and compliance with the application deadline. The final number of shares allotted can also depend on the issue terms and whether the issue is fully subscribed.
What a shareholder can do
SEBI’s investor guidance identifies three broad choices:
The Tool Desk
Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →- Subscribe: apply for all or part of the entitlement and pay the required amount.
- Renounce or sell the entitlement: transfer it where the particular issue permits renunciation or a trading facility. The dates, platform and transfer restrictions are issue-specific.
- Take no action: allow the entitlement to lapse or be handled as the offer document specifies. The holder may then own a smaller percentage of the company after new shares are issued.
A rights issue can therefore preserve a shareholder’s percentage only if the shareholder takes up the proportionate entitlement, subject to the allotment and issue terms. Participation requires additional capital and does not guarantee a profit.
Public issue explained
IPO and FPO
SEBI’s May 2025 issues FAQ classifies public issues as an initial public offering (IPO) or a further public offering (FPO). An IPO is a public offer by an issuer that is not already listed. An FPO is a further public offer by an issuer that is already listed. Both invite applications from public investors under the offer’s allocation rules.
A public issue may contain a fresh issue of securities, an offer for sale by existing holders, or both. A fresh issue raises money for the company. In an offer for sale, the selling shareholders receive the sale proceeds; the company does not necessarily receive new capital. Read the structure in the prospectus rather than assuming that every public offer funds the issuer.
Rank #2
- 5-in-1 USB-C Hub: Experience comprehensive connectivity featuring a Power Delivery input, two USB-A 2.0 ports, a USB-A 3.0 port, and an HDMI port. (Note: The USB-C power delivery input port is only for connecting an external wall charger to power your laptop and cannot power peripheral devices.)
- 90W Pass-Through Charging: Achieve optimal charging with 90W pass-through power to your laptop, supported by a total input of 100W, with the hub reserving 10W for operational efficiency. (Note: Wall charger not included.)
- Quick Data Transfers: Accelerate your productivity with rapid data transfers using a high-speed 5Gbps USB 3.0 port and two 480Mbps USB 2.0 ports.
- 4K HDMI Display: Enhance your visual experience with a hub capable of delivering 4K resolution at 30Hz in both mirror and extend modes. Please note that this hub is compatible with MacBook (macOS 12 and newer), Windows 10 and 11, ChromeOS, and laptops equipped with DP Alt Mode and Power Delivery. Note: This device is not compatible with Linux.
- What You Get: Anker USB-C Hub (5-in-1, 4K HDMI), welcome guide, 18-month warranty, and our friendly customer service.
How allocation differs from rights entitlement
Public-issue allocation follows the categories, reservation rules, price mechanism and demand described in the prospectus or red herring prospectus. It is not calculated as a personal entitlement based on how many shares an applicant already owns. An existing shareholder may have access to a reserved category or other special treatment only if the particular offer and applicable rules provide it.
Because demand can exceed the shares available in a category, an application for a public issue does not ensure allotment. The offer document explains the relevant categories, bidding or application process, minimum lot and finalisation procedure.
Rights issue vs. public issue: comparison
| Comparison point | Rights issue | Public issue |
|---|---|---|
| Eligible applicants | Existing shareholders meeting the record-date conditions. | Public investors, including people who do not already own shares. |
| Basis for quantity | Ratio applied to the eligible holding. | Offer size, category rules and allocation process; no automatic pro-rata right. |
| Common classifications | Separate rights issue; not called an IPO or FPO. | IPO for an unlisted issuer or FPO for an already listed issuer. |
| Main offer document | Letter of offer, with an abridged letter and application materials where applicable. | Prospectus; a red herring prospectus may be used for a book-built issue. |
| What an existing holder can do | Subscribe, renounce where permitted, or not act. | Apply as a public investor if eligible; ownership alone does not create a pro-rata subscription. |
| Effect of doing nothing | Percentage ownership may decline after the new shares are issued. | No rights entitlement is lost merely because the holder does not apply; they simply do not receive an allocation. |
| Pricing indication | SEBI says rights shares are usually offered below the prevailing market price, but the discount is not a suitability test. | Price and valuation method are set out in the prospectus or red herring prospectus and may involve a price band or fixed price. |
What an existing shareholder should check first
Record date and entitlement ratio
Confirm the record date, the number of shares held on that date, the entitlement ratio, any fractional-share treatment and the last date for action. Broker and depository records may show an entitlement separately from the company’s ordinary share balance. Do not infer your entitlement from a news headline or an old corporate-action calendar.
Price and total cash requirement
Multiply the number of shares you intend to request by the issue price, then check whether payment is required in one instalment or in stages. Include any funds that may be blocked or debited under the application method. A lower issue price than the exchange price can reduce the entry cost, but it does not remove business, market or execution risk.
Use of proceeds and financial condition
Read why the issuer says it is raising money: for example, debt repayment, capital expenditure, working capital, an acquisition or general corporate purposes. Compare that explanation with the company’s financial statements, liabilities, cash generation, risks and stated milestones. A rights issue can strengthen a balance sheet, fund growth or postpone a financing problem; the offer document’s disclosures are the basis for judging which description fits.
Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsRenunciation and trading terms
Find out whether the entitlement can be renounced, the period during which it can be transferred or traded, and what happens if a buyer does not exercise it. Some offers use a separate entitlement identifier and a defined trading window. Missing that window can leave the holder unable to realise any value from the entitlement. Follow the issuer, exchange, broker and depository instructions for the specific issue.
Rank #3
- Sleek 7-in-1 USB-C Hub: Features an HDMI port, two USB-A 3.0 ports, and a USB-C data port, each providing 5Gbps transfer speeds. It also includes a USB-C PD input port for charging up to 100W and dual SD and TF card slots, all in a compact design.
- Flawless 4K@60Hz Video with HDMI: Delivers exceptional clarity and smoothness with its 4K@60Hz HDMI port, making it ideal for high-definition presentations and entertainment. (Note: Only the HDMI port supports video projection; the USB-C port is for data transfer only.)
- Double Up on Efficiency: The two USB-A 3.0 ports and a USB-C port support a fast 5Gbps data rate, significantly boosting your transfer speeds and improving productivity.
- Fast and Reliable 85W Charging: Offers high-capacity, speedy charging for laptops up to 85W, so you spend less time tethered to an outlet and more time being productive.
- What You Get: Anker USB-C Hub (7-in-1), welcome guide, 18-month warranty, and our friendly customer service.
How to decide whether to participate in a rights issue
- Obtain the current documents. Use the issuer’s letter of offer and the broker or depository notice, not an unauthorised summary. Check that the document relates to the same security and issue dates.
- Verify eligibility. Match the record date, your eligible holding and the entitlement shown in your account. Resolve discrepancies with the broker or registrar before the deadline.
- Calculate the commitment. Decide how many shares you would take and calculate the full cash requirement, including any instalment schedule and application conditions.
- Assess the reason for the fund-raise. Identify the stated use of proceeds and the risks if the company raises less than planned or spends the money differently.
- Compare value without assuming a bargain. Consider the company’s prospects, debt, cash flow, governance and the post-issue share count. A discount to the market quotation can disappear if the market price falls or the business underperforms.
- Choose among the permitted actions. Subscribe if the additional exposure fits your objectives and risk capacity; renounce if transfer is allowed and that better suits you; or allow the entitlement to lapse after understanding the dilution consequence.
- Submit through the stated route. Use the issuer’s application process, broker channel or an online ASBA facility only where the issue documents say that route is available. Retain the acknowledgement and application details.
- Monitor allotment and refunds or unblocking. Check the registrar, broker and bank records for the final number allotted, any amount unblocked or returned and the date the shares or entitlement-related securities are credited.
Application routes and timing in India
SEBI’s investor material says rights participation may be made online or through brokers using ASBA, but the available route must be confirmed for the actual offer. ASBA generally blocks the application amount in the investor’s bank account rather than transferring it immediately; the issue-specific instructions control how and when the block is released or adjusted. A broker’s interface may use different labels, so match each field to the application instructions.
The SEBI ICDR text consulted for rights issues specifies a subscription period of at least 15 days and at most 30 days. That is a regulatory framework detail, not permission to assume that every future issue will use the same dates or that no extension, exemption or special rule applies. The letter of offer and current SEBI and exchange notices govern the live timetable.
Do not wait for the final day. Bank blocks, technical failures, incorrect demat details or an uncompleted payment authorisation can prevent a valid application. Keep evidence of the submission and check whether the issuer requires a separate instruction for additional shares beyond the basic entitlement.
Documents: what each one tells you
Letter of offer
For a rights issue, the letter of offer sets out the record date, ratio, issue price, opening and closing dates, application and payment mechanics, renunciation provisions, use of proceeds, risk factors and the issuer’s financial and legal disclosures. An abridged letter and application materials may accompany it. Treat this document as the controlling explanation of the offer rather than relying on a generic rights-issue definition.
Prospectus or red herring prospectus
For a public issue, the prospectus describes the issuer, securities, risks, financial information, use of proceeds, offer structure, eligibility, pricing or price band and allocation. A red herring prospectus is used in a book-built public issue before the final price and certain final details are determined. The final prospectus and exchange announcements should be checked for updates.
Legal framework and terminology
Section 23 of the Companies Act, 2013 lists the principal routes through which a public company may issue securities: a public offer through a prospectus, private placement, or a rights or bonus issue under the Act and, for listed companies or companies intending to list, the applicable securities laws and regulations. This statutory structure is why a rights issue and a public offer are treated as different routes.
Rank #4
- Dual Converters, Infinite Potential：Includes 2× USB C male to USB A female adapters and 2× USB A male to USB C female adapters. Perfect for a wide range of uses—tablets with Bluetooth keyboards, expand USB ports on macbook, and more. Two different converters for all your daily needs
- Next-Level 10Gbps & 3A Charging: No more slow 480Mbps, this usb to usb c adapter has a transfer speed of up to 10Gbps, allowing you to do more transferring in less time. This usb adapter fits both USB A and USB C charger, supporting up to 3A fast charging
- Upgraded Exquisite Craftsmanship: With an aluminum alloy housing and metal connector, the usbc to usb adapter is extremely durable and sturdy. Rigorously tested to withstand more than 10,000 times of plugging and unplugging, ensuring long-lasting performance
- Broad Compatible: The usb c to usb adapter widely supports all USB C/ USB A devices like laptops, tablets, cellphones, car chargers, and phone chargers. Such as compatible with MacBook Pro/Air 2023/2022, Thunderbolt 4/3 Devices,Apple MagSafe Watch 9/8/7/SE/Ultra, iPad Pro 2022/2021, Samsung Galaxy S23/S20/S10, and iPhone 17/16/15 Pro. Plug and play
- Please Note: To reach 10Gbps speed, keep the cable under 3.3 ft. For USB A Male to USB C adapters, try flipping the USB C connector. USB C Male to USB A adapters support bidirectional 10Gbps transfer within 3.3 ft
The same section’s description of a public offer includes an IPO, an FPO and an offer for sale to the public through a prospectus. An offer for sale should not be confused with a fresh issue: the former can transfer securities from selling holders without raising new capital for the company.
NSE explanatory material connects the proportionate first offer to existing shareholders with the rights provisions in Section 62 and discusses process changes introduced through a 2020 SEBI circular. That background is useful for understanding why entitlements are credited and handled separately, but operational instructions can change. Use the current exchange notice and the issue documents for a live transaction.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Risks and common mistakes
Assuming the discount guarantees a gain
A rights price below the current quotation may look attractive, but the market price can fall, the company can perform poorly and the entitlement can lose value. The discount is one input, not a forecast of return.
Ignoring dilution
If new shares are issued and you do not take up your proportionate entitlement, your percentage stake can decline. The economic effect depends on how many new shares are issued, who subscribes and what the company does with the proceeds. Calculate the post-issue ownership described in the offer documents rather than relying on a general rule of thumb.
Confusing entitlement with allocation
A rights entitlement gives the eligible holder a defined opportunity under the offer. A public-issue application is subject to the public allocation process and may receive fewer shares or none. These are different expectations and should not be described interchangeably.
Recommended Free Tools
Missing a deadline or using the wrong account
Rights entitlements, trading windows and applications can have separate cut-off times. A payment made from an unlinked account, an incorrect demat identifier or an incomplete authorisation can invalidate an otherwise eligible application. Verify the details before submitting and keep the acknowledgement.
Best Value
- 5-in-1 Connectivity: Equipped with a 4K HDMI port, a 5 Gbps USB-C data port, two 5 Gbps USB-A ports, and a USB C 100W PD-IN port. Note: The USB C 100W PD-IN port supports only charging and does not support data transfer devices such as headphones or speakers.
- Powerful Pass-Through Charging: Supports up to 85W pass-through charging so you can power up your laptop while you use the hub. Note: Pass-through charging requires a charger (not included). Note: To achieve full power for iPad, we recommend using a 45W wall charger.
- Transfer Files in Seconds: Move files to and from your laptop at speeds of up to 5 Gbps via the USB-C and USB-A data ports. Note: The USB C 5Gbps Data port does not support video output.
- HD Display: Connect to the HDMI port to stream or mirror content to an external monitor in resolutions of up to 4K@30Hz. Note: The USB-C ports do not support video output.
- What You Get: Anker 332 USB-C Hub (5-in-1), welcome guide, our worry-free 18-month warranty, and friendly customer service.
Assuming every public issue raises company funds
Check whether the prospectus describes a fresh issue, an offer for sale or a combination. Proceeds going to selling shareholders have different implications from money invested in the issuer.
Illustrative decisions for existing shareholders
Shareholder with sufficient cash and confidence in the plan
An investor who wants to maintain a percentage holding can compare the required payment with their risk budget, review the use of proceeds and apply for the entitlement before the stated deadline. The decision remains an investment in the company, not merely a way to preserve a percentage.
Shareholder who does not want more exposure
This investor can examine whether renunciation is permitted and economically worthwhile. If it is not transferred or exercised, the entitlement may lapse under the offer terms, and the investor should understand the resulting dilution before choosing inaction.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Shareholder considering a public issue instead
The existing holding does not automatically provide priority in an IPO or FPO. The investor must meet the public issue’s eligibility and application requirements and should evaluate the prospectus independently of any rights offer by the same company.
Practical checklist
- Record date and eligibility confirmed.
- Entitlement ratio and any rounding rule noted.
- Issue price and total cash requirement calculated.
- Opening and closing dates, including any renunciation or trading period, recorded.
- Letter of offer read, including risks and use of proceeds.
- Renunciation, additional-share and oversubscription rules understood.
- Application route confirmed with the issuer, broker, bank or depository.
- Bank account, demat account and contact details checked.
- Decision documented: subscribe, renounce where allowed, or do nothing after considering dilution.
- Allotment, credit and unblocking or refund checked after the issue closes.
How to interpret the outcome
If you subscribe, the number of shares credited and the amount finally used may differ from your initial request according to the issue’s allotment rules. If you renounce, the value and transferability depend on the market and the specified window. If you do nothing, the entitlement treatment and any ownership dilution follow the letter of offer. In every case, the issuer’s current disclosures and official account records take precedence over informal explanations.
When to seek clarification
Contact the issue registrar or your broker when the entitlement is missing, the ratio appears wrong, an application is rejected, funds remain blocked after the announced period, or credited shares do not match the allotment notice. Ask for the issue-specific procedure and retain written confirmation. For tax, legal or suitability questions, obtain advice appropriate to your residence and circumstances; the Indian framework described here is not a universal rule.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
