What is Rights Entitlement (RE)? How to Trade RE on NSE
Rights Entitlement is the tradeable right to subscribe to a rights issue.
Rights Entitlement (RE) is a tradeable instrument credited to your demat account when a company announces a rights issue. It gives you the option to subscribe to new shares at the rights price. If you do not want to subscribe, you can sell the RE on NSE or BSE during the trading window.
If a company offers rights at Rs.100 when market price is Rs.150, each RE has an intrinsic value of approximately Rs.50. You can sell the RE at around Rs.45 to 50, recovering value without investing additional capital.
How to trade RE?
RE appears in your demat account with a separate ISIN. It is listed and traded on NSE/BSE during the rights issue period. You can sell at market price. If RE trading price is below intrinsic value, subscribing and selling shares later may be more profitable.
What happens if RE expires?
If you neither subscribe nor sell RE before the deadline, it expires worthless. You lose the value completely. Always act before the RE trading deadline.
Track RE trading on Stockk Equity with real-time pricing during the rights window. Manage your rights through your Stockk demat account.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice. INDIRA SECURITIES PRIVATE LIMITED : SEBI REG. NO.: INZ000188930, NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG.NO.: IN-DP-90-2015, CIN:U67120MP1996PTC085111, RA SEBI REG. No.: INH000023269, IA SEBI REG No.: INA000021410. For any complaints pertaining to securities broking please write to [email protected], for DP related to [email protected].
Frequently Asked Questions
Is selling RE taxable?
Yes. Profit from selling RE is treated as capital gains. Short-term because RE has a very short holding period. Use StockkAsk at stockk.trade/stockkask for tax implications.
Can I buy additional RE from the market?
Yes. If you want more rights shares than your entitlement, buy additional RE from the market and apply.
How is RE priced?
RE price = Market price - Rights price, approximately. Actual trading price may differ based on demand and supply.
What is the RE trading period?
Typically 2 to 3 weeks. Check the company's rights issue documents for exact dates.
Can NRI investors participate?
Yes. NRIs can subscribe or sell RE through their NRI demat accounts.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice.
INDIRA SECURITIES PRIVATE LIMITED : SEBI REG. NO.: INZ000188930, NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG.NO.: IN-DP-90-2015, CIN:U67120MP1996PTC085111, RA SEBI REG. No.: INH000023269, IA SEBI REG No.: INA000021410
