Shares of Inox Wind Ltd are in focus on Thursday morning after the wind energy solutions provider announced the approval of a rights issue, aggregating up to Rs 1,249.33 crore.
The move, the company said, is aimed at strengthening its capital structure and supporting future growth initiatives.
The Inox Wind board approved the issuance of 10,41,10,712 fully paid-up equity shares with a face value of Rs 10 each at an issue price of Rs 120 per share. This included a premium of Rs 110 per share.
Inox Wind shares settled at Rs 165.60 apiece on Wednesday and the issue price suggests a 27 per cent discount over this price. The rights entitlement ratio has been set at five equity shares for every 78 equity shares held by eligible shareholders as on the record date of Tuesday, July 29, 2025.
Rights issue
Section 62(1) of the Companies Act, 2013 deals with the further issue of share capital. It applies when a company proposes to increase its subscribed capital through the issuance of fresh shares. Under this section, such new shares must first be offered to the existing equity shareholders of the company, as on the date of the offer, in proportion to their existing shareholding, by way of a letter of offer, subject to a few conditions.
Rights entitlement
Here rights entitlement (RE) is the rights issued by the company to the existing shareholders to subscribe to the new shares. REs are offered to shareholders based on a ratio of existing equity shares held as on the record date. In Inox Wind’s case, it is five equity shares for every 78 equity shares held by eligible shareholders. The record date in this case is Tuesday, July 29, 2025. Rights entitlements are issued in dematerialised form under a separate ISIN created by the company.
Options with investors
As per the Securities and Exchange Board of India (SEBI) guidelines, eligible equity shareholders are provided with five options regarding their rights entitlements during a rights issue.
First, they may choose to apply for the rights equity shares to the full extent of their rights entitlements.
Second, shareholders have the option to apply for the full extent of their rights entitlements and also apply for additional rights equity shares over and above their entitlements, as per SEBI.
Third, they may apply for the rights equity shares only to the extent of a part of their rights entitlements, without renouncing the remaining portion.
Fourth, shareholders may apply for the rights equity shares to the extent of a part of their rights entitlements and renounce the balance-either in part or in full-in favor of any other person(s).
Lastly, they may renounce their entire rights entitlements in full.
Investors may renounce the rights entitlements, credited to their respective demat accounts by selling them on the secondary market platform of the stock exchanges through a registered stock broker in the same manner as selling equity shares of the company.
Rights entitlements (REs) which are neither subscribed nor renounced on or before the issue closing date lapse and are extinguished after the issue closing date, a SEBI FAQ read.