Who are eligible shareholders to apply for the right issue?

Any person who owns the company’s shares in his Demat account on the record date will be the eligible shareholder to apply for the company’s right issues. Eligible Shareholders receive such right in the form of Right Entitlement (RE) which can be used to subscribe to the right shares.

However, if you don’t want to subscribe the right issue, then you also have an option to renounce RE to another party at a better price to earn profit. One must transfer right entitlement before the last date of renunciation.