Rights issue
Market basicsAn offer to existing shareholders to buy new shares, usually at a discount to market price.
In plain terms
The company asking you for money. Read why it needs it before deciding.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Corporate action adjustment
Fundamental analysisAlso called: Adjusted per-share series
Restating historical per-share figures for bonus issues, splits, rights issues and similar events so that a per-share series remains continuous.
In plain terms
Bonuses and splits divide by a simple factor. A rights issue priced below the market contains an element of bonus, so it needs a computed factor rather than a divisor.
Rights entitlement
Market basicsAlso called: RE
A tradeable right to subscribe to a rights issue, credited to your demat account.
In plain terms
It has real value. Letting it lapse dilutes you and pays you nothing.
Special situation
Fundamental analysisA corporate event — demerger, buyback tender, delisting offer, rights issue or index change — that creates a mechanical mispricing independent of business quality.
In plain terms
The terms are published, the timeline is fixed and the outcome is largely arithmetic. They persist because they are boring, small and time-limited, which keeps large funds away.