Rights issue
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How do i subscribe to the rights issue. I donât have net banking. It says that i can go to linkintime and their I can apply but there.
When i go to linkintime, it shows that certain quantity has been alloted but how do i buy those rights issue because there is no option of payment showing there.
The issue is open till 14 March 2024. You can activate net banking and then apply.
Will these rights issues show up in ICICI demat âDemat Holdingsâ page like it did for India Bulls Housing Finance Rights Issues? From there I was able to sell the Rights Issues like I usually sell shares.
Itâs showing on my Zerodha account. You can check your ICICI demat
The South Indian Bank RE will show up in your demat which you can sell. RE is rights entitlement. If you sell RE it means youâre selling your rights to buy shares at lower price to someone else.
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I would like to consider that option because in the case of India bulls the RE was selling for up to Rs 46 and with the RE I could buy for Rs 150. So, I could sell the RE for say 42 and buy the shares from the open market for Rs 180. However, we get taxed on Rs 42 one receives on selling the rights, if I am not mistaken.
In the case of South Indian Bank, I have the following options:
- Maintain my proportional ownership in South Indian Bank at a discount of Rs 8 from the CMP
- Decrease my proportional ownership in South Indian Bank, sell the RE at around Rs 7.50 or whatever the current traded price is for the rights buy any share which I think is undervalued
- Not do any of the above in which case my ownership in South Indian Bank gets diluted anyway without the income from selling the RE.
Since 3 is not a good option, I might as well go with option 2 if I donât want to do option 1.
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The stock price has corrected from almost a peak of 34 to CMP of 28ish. Is this the effect of rights issue? There is a fall in RE price as well. Can someone explain that the fall is because of the rightâs issue or there has been some news around the bank which is causing the price to fall?
I think the fall is mostly due to the rights issue. Many have dumped their shares at higher price to buy shares through rights issue at lower price. Let us look at the calculation as per yesterdayâs price
South Indian Bank was trading at around 28.8 yesterday
South Indian Bank RE (Rights Entitlement) was selling at 5 yesterday
Suppose you have 1000 shares. You sell those 1000 shares at 28.8. You get 28000
You buy 1000 RE shares at 5. Your outflow is 5000
These RE give you the rights to purchase shares at 22.
So you apply for 1000 shares in rights issue at 22. Your outflow is 22000
Your total outflow is 22000+5000 = 27000
Your inflow is 28800. You gain 1,800. Your final gain might be less after brokerages and transaction costs.
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Minus the tax on capital gains.
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South Indian Bank halt co-branded credit card activities following RBI guidance. South Indian Bank suspends on-boarding new customers until full compliance achieved.
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The main comfort is coming through valuations and further the major part of the provisioning has been done in first two quarters and in this quarter the provisioning will be minimum. The last quarter in general represents the highest growth which shall improve the existing NIM but will not be able to match the guided 3.5% for sure. Here the price of the rights issue keeps us comfortable.
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Any view on Q4FY24 results?
it was expected to not be great. NIMS were going to compress etc.