Rights issues have become a popular way for companies in India to raise additional capital from existing shareholders. Among the notable registrars that facilitate this process is Link Intime India Pvt Ltd. Link Intime plays a vital role in ensuring that rights issues are processed smoothly and transparently. Understanding the role of Link Intime in a rights issue, how shareholders can apply, and what procedures to follow is essential for both new and experienced investors. A rights issue offers a unique opportunity to purchase additional shares at a discounted price, and the registrar is a key intermediary in making this possible.
Understanding Rights Issues
What is a Rights Issue?
A rights issue is a method used by companies to raise additional capital by offering existing shareholders the right to purchase additional shares at a discounted price. These rights are proportionate to the shareholder’s current holdings. For example, a 1:5 rights issue means you can buy 1 additional share for every 5 shares you already own.
Why Do Companies Opt for Rights Issues?
There are several reasons why companies opt for rights issues:
- To strengthen their capital base
- To finance new business projects
- To repay debt
- To improve liquidity or cash reserves
This method is often seen as shareholder-friendly since it gives current shareholders the first right to invest further in the company at favorable rates.
Role of Link Intime in Rights Issues
Registrar to the Issue
Link Intime serves as a registrar to the issue, meaning they are responsible for administrative processes involved in rights issues. Their duties include:
- Managing records of shareholders eligible for the rights issue
- Handling application processing
- Overseeing allotment of shares
- Managing refunds, if applicable
They act as the liaison between the company and the shareholders, ensuring all regulatory requirements are followed and shareholder queries are addressed efficiently.
Communication with Shareholders
Link Intime ensures that all eligible shareholders are informed about the rights issue through various modes such as emails, physical letters, and notifications through stock exchanges. The communication typically includes important details like:
- Record date
- Issue price
- Ratio of rights entitlement
- Start and end date of the issue
- Steps for applying
How to Apply for a Rights Issue via Link Intime
Check Eligibility and Rights Entitlement
First, investors must confirm whether they are eligible by checking the record date declared by the company. The number of rights shares one is entitled to is based on holdings as of the record date. This information can be found on the Link Intime portal using your PAN or DP/Client ID.
Access the Application Portal
Link Intime provides a dedicated online portal for applying to rights issues. Investors can log in and fill in the required details such as:
- Demat account number
- Rights entitlement (RE) details
- Bank account for payment
Link Intime also supports ASBA (Applications Supported by Blocked Amount) where funds are blocked in the applicant’s bank account and only debited upon allotment.
Apply Through R-WAP (Rights Issue Web-based Application Platform)
In recent rights issues, Link Intime has facilitated the use of R-WAP, a platform provided for resident investors to apply digitally without visiting banks or brokers. This platform allows payment through UPI and net banking and is especially useful during situations such as the COVID-19 pandemic when physical movement is restricted.
Steps to Apply via Link Intime
- Visit Link Intime’s official website
- Navigate to the Rights Issue’ section
- Enter your PAN or DP ID and Client ID to view entitlement
- Select Apply for Rights’ and fill the application form
- Choose payment method (ASBA or R-WAP)
- Submit the form and keep acknowledgment for reference
Tracking Application Status
Post Application Process
Once the application is submitted, shareholders can use Link Intime’s portal to track the status. By entering PAN or Application Number, applicants can:
- Check whether their application has been received
- Verify payment status
- Know about share allotment
- View refund details if applicable
Allotment and Credit of Shares
Share Allotment Process
After the closing of the rights issue, Link Intime facilitates the allotment process in consultation with the lead managers and the company. Shares are allotted based on entitlement and application amount. In the event of oversubscription, additional shares may be allotted based on proportionate allotment rules.
Credit to Demat Account
Once allotted, the rights shares are credited to the investor’s demat account. Link Intime coordinates this with depositories like NSDL and CDSL. Investors receive an email or SMS confirmation once the shares are credited.
Refunds and Reconciliation
Handling Excess Payment or Rejection
In cases where the application is rejected due to incorrect information or over-application, Link Intime ensures that refunds are processed promptly. Refunds are usually credited back to the original payment source, especially in ASBA applications.
Investor Grievance Redressal
Shareholders facing issues with their applications can approach Link Intime for resolution. Common queries include:
- Non-receipt of RE (Rights Entitlement)
- Application status not updated
- Delayed refund or allotment
Investors can reach out through email, helpline numbers, or the contact form on Link Intime’s website.
Benefits of Using Link Intime for Rights Issues
Efficient Processing
With years of experience as a registrar, Link Intime is known for quick and transparent handling of applications, allotments, and refunds.
User-Friendly Online Interface
The web-based interface, particularly the R-WAP platform, allows even novice investors to apply without needing deep technical knowledge or visiting physical branches.
Reliable Communication
Timely alerts and notifications ensure that investors are aware of each stage of the rights issue process, reducing confusion and enhancing participation.
Participating in a rights issue through Link Intime is a convenient and structured process that enables shareholders to increase their stake in a company at favorable terms. With detailed information about eligibility, application procedures, and real-time tracking, Link Intime simplifies the investor experience. Whether you are applying through ASBA, R-WAP, or any other method, staying informed and timely in your actions will ensure you don’t miss out on the opportunity to grow your investment. As a registrar, Link Intime continues to play a pivotal role in ensuring transparency and efficiency in India’s capital markets.