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Right issue renunciation means transferring the right share entitlements by a shareholder to another person. When a company’s existing shareholder is not interested to buy company’s right shares then he has an opportunity to sell Right Entitlement (RE) in the favor of another person at a better price to earn profit which is called “renunciation of right shares. Renunciation can be done either fully or partly in favor to other person, who is not the existing shareholder of the company. The person who transfers RE is known as “renouncer”, and to whom RE is given is termed as “renounce”.
Whenever a company issue right shares then it clearly publishes the last date of renunciation of right issue entitlement, interest parties can transfer their rights before the specified date only. An existing shareholder can renounce the right shares to the full extent of his right entitlement available in the Demat account.
Right entitlements that are neither used to subscribe for right shares nor renounced on or before the issue closing date will be lapsed post the issue closure and RE ISIN will be suspended.
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