I agree that this dilution could have happened later but seems raising funds from banks/market would have been challenging for IBH and hence to provide more confidence to market there is fund dilution. Also, opportunity for exisiting investors.
Last time QIP was also done below BV by erstwhile old promoters/Sameer and seems management are best people to take this call between equity dilution/growth capital.
Would there be equity dilution for a shareholder only if an existing doesnât participate fully? Or does it favour majority shareholders over minority shareholders?
I donât see rights entitlements in my demat account yet. I use ICICIDirect. Please confirm if you are seeing right entitlements in your Demat account.
There would be no dilution if a shareholder subscribes to right issue. Alternatively rights entitlement can be sold at fair price if shareholder is not interested to subscribe. Rights issue will be dilutive only if a shareholder does nothing i.e neither subscribes nor sells rights entitlement.
Just a small doubt. I know that the right entitlement gets traded in the market. So, the RE share will be credited to our Demat account during the time of application, like Skipper RE gets traded??
Am I right?
At the time of rights issued by VI, I had the right, but I didnât get anything credited to my Demat account. I only got an envelope at my address.
Rights entitlement started trading today
Yes itâs open from yesterday(7 Feb)
I got the RE but unable to sell it
You need to place a limit order. Market orders are not being accepted.
On what basis does the prices of these REs fluctuate? The stock closed at 189.20 and the RE closed at 46.50. So someone buying the RE will end up paying 46.50 + 150 = 196.50 for the stock.
Why would anyone buy and pay more for the stock this way? Can someone explain?
Maybe it has to do with the fact that only 50rs is due now and the rest callable at a future date so investors might be taking a gamble and betting on good growth coming. I could be totally wrong.
Overtly optimistic. The truth is that most of their loans are stuck. They are not able to raise money easily!! They issued ncds many times. At the interest rate of 10.75 percent and yet they barely get subscribed to the minimum. They try to raise for 1k cr and it barely gets subscribed 110-120 cr!! The issue cost takes the effective interest rate for money raise to 12.5-13 percent!!
