Right issue

Right issue refers to the listed company or public limited company will raise the fund through issuing shares to the existing shareholders. In right issue existing shareholders can purchase the shares at discount or less than the market price of the share. The issue will be according to proportion of share held my share holder. The ratio will set by comapny, according to that shareholder will get additional share. In Right issue existing shareholder will be offered to purchase the share where it is his choice whether to purchase or not. The issue was done to raise additional fund for the operation of the company. In right issue the shares are issued at discount to shareholder.