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What does 1:2 RIghts Issue Mean?

As a trader, one will come across number of terminologies and one such terminology is related to announcement of proportion based Rights Issue/ Rights Shares

The issue of new securities to existing shareholders at a ratio to those already held, at a price. For e.g. a 1:2 rights issue at Rs. 100, would entitle a shareholder to receive 1 shares for every 2 shares held at a price of Rs. 100 per share. Similar concept can be applied for 2:3 or any kind of proportion.

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