There are two processes; On Market and Off Market Renunciation, through which, you can renounce or transfer right entitlement to another person. Here are the details;
- On Market Renunciation: Under this process, a person can renounce the rights entitlement by selling it on the secondary platform of the stock exchange through a registered broker. The right entitlement is credited to shareholder’s Demat account in a separate ISIN, different from the company’s share ISIN. If an existing shareholder don’t want to subscribe right shares, then he can simply place sell order for the right entitlement at a better price just like the shares sell order and once the order is executed, the right entitlement will be credited to Renouncee’s Demat Account within T+2 days. The last date of on-market renunciation is atleast 3 working days before the issue closure date.
- Off Market Renunciation: This is an off-the exchange process to transfer the right issue entitlement to the renouncee’s Demat Account through depository participant. To renounce RE, existing shareholders have to issue a delivery instruction slip (DIS) quoting the RE ISIN, renouncee’s details and the details of right entitlement that are intended to sell. However, the buyer or renouncee has to issue a receipt instruction slip to the DP. The off-market renunciation must be done in such a manner so that right entitlement gets credited to renouncee’s Demat account on or prior to the issue closing date, so that, renounce can apply for the right shares.
