Shangar Decor Rights Issue: An Ahmedabad-based microcap company has announced to raise funds through a rights issue. This is Shangar Decor. Shangar Decor offers a wide range of decor services and its share is currently cheaper than Rs 11. Its shares are listed on the BSE. In Friday's trading, its share closed at Rs 10.41 with a gain of Rs 0.36 or 3.58 percent. Know more about its rights issue.

What will be the size of the rights issue?

Shangar Decor has announced that it will issue 8,56,82,800 (8.56 crore) fully paid-up equity shares of face value of Rs 5 each for Rs 5.76 per share, aggregating to Rs 49.35 crore. The rights issue opened for subscription on November 8 and will close on December 6.

The last date for application in the rights issue is November 29. The funds raised through the rights issue will be used to meet working capital requirements, issue expenses, and general corporate purposes.

What is the rights entitlement ratio?

The rights entitlement ratio has been fixed at 7:1, which means that for every 1 share held by equity shareholders as on the record date - October 28, 7 rights equity shares of face value of Rs 5 each will be issued.

Investors who did not hold shares on the record date and wish to participate in the rights issue can do so by obtaining rights entitlement from the exchange.

What is a rights issue?

A rights issue is an offer by a company to its existing shareholders to buy additional shares at a lower price for a fixed period. Through rights issues, companies raise funds and repay debt or use the money for some other purpose. At the same time, shareholders get an opportunity to increase their stake in the company's stock.