What's with L&T Finance? L&T Finance Holdings Limited: Rights Issue

[mapes21]

So I got an email from L&T Finance stating some rights issuance and some stock calculations.

I can understand basic investments but anything beyond the surface confuses me. I did try to read and understand but couldn't make sense out of it.

The email has few links to some kind of forms and stuff.

Can someone please explain and help me understand what is up with L&T Finance?

 

[resjudicata]

@mapes21 I remember reading some news stating that L&T Finance would be opening a ₹2998.61 cr. rights issue.

I suppose you’re an eligible equity shareholder and are entitled to the rights issue. This could mean additional shares, dividends, or additional rights with respect to your already existing shares

 

[mapes21]

@resjudicata Yes, but what action is needed from my side?

 

[farukb]

@mapes21 Existing shareholders are given the exclusive right to purchase further equity shares or renounce this right.

You will of course have to pay for them. Look for section on how to apply - its probably similar to applying for an IPO.

 

[mapes21]

@farukb Okay so if I want, I can purchase additional shares. Else, I can just ignore it, right?

 

[farukb]

@mapes21 Yes I believe so.

Do also check: I think also the right itself can be traded - or you can exercise the right and sell on open market. Maybe there is some price advantage to be gained there.

 

[mapes21]

@farukb Oh okay. I mean as long as I am not losing money by retaining current position, I am good

Thanks bud for the help.

 

[wilddaisy]

@farukb Yep. I sold my reliance rights issue when it was selling at a premium to the price difference. I just bought more reliance shares off the market instead.

 

[mjar89]

@mapes21 Even I had got it in my positions one day it was giving 2k profit so sold it

 

[mapes21]

@mjar89 How? Did you share count increase?

 

[mjar89]

@mapes21 No I sold the issue of rights like not the shares. I really don’t know how to explain it

 

[mapes21]

@mjar89 I too want to do it but don't know how to do it.

 

[mjar89]

@mapes21 Like I bought the share for a positional trade and then suddenly in Zerodha it shows up I even forgot the ticker it’s was something LTRFT or something saw a 2k profit and sold it immediately. The money even came into my account so yeah

 

[mapes21]

@mjar89 Strange. Won't think I'd be able to sell them since 15th is the expiry.

 

[mjar89]

Let’s see best of luck to you

 

[stricky]

@mapes21 L&T Finance shareholders are entitled for subscribing for additional shares in the ratio of 17 shares for every 74 shares held at Rs. 65 per share.
These Right Shares are offered at a discount to the existing shareholders.
You can either subscribe for the shares or sell the entitlement ( trading at Rs.20?). Otherwise these entitlements will automatically get renounced.

 

[mapes21]

@stricky So do I still have my original holdings or they are no longer with me?

 

[stricky]

@mapes21 There won't be any change in original holding. It's just that the company is raising additional capital.

 

[mapes21]

@stricky Aha!! Seems okay to me then. Thanks

 

[stricky]

@mapes21 If you don't have any plans for subscribing for these additional shares then you can just sell the Right Entitlements (not your actual holding) at market price.
They are currently trading at around Rs. 20, I guess.