Rights Renunciation Value Calculator

If you don't want to subscribe to a rights issue, you can renounce (sell) your rights entitlement (RE) on the exchange instead of letting it lapse. This calculator estimates the theoretical value of that entitlement.

Estimated Value per Rights Entitlement

₹16.67

A theoretical estimate — actual REs trade on the exchange at whatever price buyers and sellers agree, which can differ from this value based on demand.

Your Rights Entitlements

Total Renunciation Value

₹333

Theoretical Ex-Rights Price (TERP)

₹96.67

Value per right ≈ TERP − issue price. Rights entitlements (REs) trade separately on the exchange between the rights opening date and a few days before closing — the actual market price for your RE can differ from this theoretical estimate.

How the Rights Renunciation Value Calculator works

A rights entitlement (RE) is valuable because it lets the holder buy a new share below the stock's theoretical ex-rights price (TERP). The theoretical value of one RE is approximately TERP − issue price— the discount you'd be forgoing by not subscribing. Since 2020, SEBI allows REs to trade separately on the exchange during a defined window (from the rights issue opening date until a few days before closing), giving shareholders who don't want to subscribe a way to realise this value in cash rather than letting it lapse worthless.

The actual market price of an RE can differ from this theoretical estimate based on real buyer/seller demand, remaining time to the renunciation window's close, and the underlying stock's price movement after the ratio and issue price are announced.

Disclaimer: This calculator is for educational purposes only and does not constitute investment advice. Always read the Red Herring Prospectus and verify current rates before applying for any IPO.

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Frequently Asked Questions

What is a rights entitlement (RE)?

An RE is the tradeable right to subscribe to new shares in a rights issue, credited to your demat account based on your existing shareholding as on the record date. It exists as a separate, exchange-tradeable instrument during the rights issue window.

How is the value of a rights entitlement calculated?

Theoretically, value per RE ≈ Theoretical Ex-Rights Price (TERP) − the rights issue price. In practice, REs trade on the exchange at whatever price buyers and sellers agree, which can deviate from this theoretical value.

What's the difference between renouncing and letting my rights lapse?

Renouncing means selling your RE to another investor on the exchange and receiving cash for it. Letting it lapse means doing nothing — the entitlement simply expires worthless, and you get no compensation for the dilution.

Can I renounce only part of my rights entitlement?

Yes — you can subscribe to part of your entitlement and renounce (sell) the rest, or renounce all of it, or subscribe to all of it. It's fully divisible.

Is the money from selling my RE taxable?

Yes — proceeds from selling a rights entitlement are typically treated as a capital gain (with the entitlement's cost of acquisition generally treated as nil under Indian tax rules, though specifics can vary). Consult a tax advisor for your specific situation; this calculator only computes the theoretical market value, not tax.