Rights Issue on WebNotes

How to apply in a rights issue on Zerodha

Tue, 12 May 2026 00:00:00 +0000

A rights issue is a corporate action in which a listed company offers additional shares to its existing shareholders at a discounted price, in proportion to their current holdings, before approaching the general public. Shareholders receive Rights Entitlements (REs), tradeable instruments credited to their demat accounts, representing the right to subscribe to a specified number of new shares at the issue price.

A 1:4 rights issue means one new share can be subscribed for every four existing shares held on the record date. Shareholders may:

How to handle a fractional share entitlement

Tue, 12 May 2026 00:00:00 +0000

A fractional share entitlement arises when a corporate action (such as a bonus issue, stock split, rights issue, merger, or demerger) produces a non-integer number of shares for a particular shareholder. Since shares in India are held in whole numbers in the demat account, the fractional portion cannot be credited as a partial share.

For example:

A 3:7 bonus issue on a holding of 100 shares produces an entitlement of 42.857 shares. The shareholder receives 42 whole shares; the 0.857 fractional entitlement cannot be credited.
A merger swap ratio of 11:16 on 100 shares produces 68.75 new shares. The shareholder receives 68 whole shares; the 0.75 fraction is handled separately.

Under Indian market practice, companies handle fractional entitlements by paying cash to shareholders in lieu of the fractional portion, at a reference price determined by the company (typically the market price on or around the record date). This guide covers how fractional entitlements are processed on Zerodha and their tax treatment.

Corporate action order charges at Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Corporate actions are events initiated by a listed company that affect its outstanding securities. When a corporate action requires or allows shareholders to submit orders (such as subscribing to a rights issue, tendering shares in a buyback, or applying for an Offer for Sale), the broker may place these orders on the client’s behalf. At Zerodha, corporate action orders placed through the broker’s platform carry a charge of Rs 20 per order plus 18 percent GST (total Rs 23.60 per order).