The issues ôf new shares tô existing shareholders în à fixed ratio tô those already held àt à price whîch îs generally below thé market price ôf old shares.These àré thé relatively rare occasions în à company's life whén ît will create new shares, thé proceeds ôf whîch will go directly into its bank account, instead ôf giving à profit [or à losss] tô àn existing shareholder. The issue ôf additional equity shares tô thé existing shareholders ôn à pre-emptive basis. Typically, thé subscription price ôf rights issue îs significantly below thé market price ôf old shares.
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