Rights issue: Mercury Trade Links shares to trade ex-rights today

The Board of Directors of Mercury Trade Links has declared a rights issue of equity shares for its eligible shareholders.

To ascertain the eligibility of shareholders for the rights issue the company has fixed the record date on March 01.

In a stock exchange filing, Mercury Trade Links Ltd said: “This is further to our intimation on the outcome of the meeting of the Board of Directors of the Company (“Board”) dated 10th November 2023, where the issue of fully paid-up equity shares of the Company of face value of ₹10 each (“Equity Shares”) was approved by way of a rights issue to the eligible shareholders of the Company for an amount not exceeding ₹9,90,00,000 (Rupees Nine Crore Ninety Lakhs) (“Rights Issue”) and constituting a rights issue committee in this regard (“Rights Issue Committee”), in accordance with the Companies Act, 2013 and the rules made thereunder, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, each as amended and other applicable laws.”

Shares of Mercury Trade Links Ltd will trade ex-rights on Friday.

What is the rights issue of equity shares?

Companies declare rights issues to raise additional funds.

In the rights issue, companies grant existing shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. This type of issue gives existing shareholders securities called rights. 

The companies give shareholders a chance to increase their exposure to the stock at a discount price.

In a rights issue, because more shares are issued to the market, the price of the stock is diluted and will likely go down.

Until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way that they would trade ordinary shares. 

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Published: 01 Mar 2024, 06:11 AM IST