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Home / Company Law & Secretarial Services / Rights Issue of Shares of Shares
Last updated: 2 October 2026
A rights issue raises money from existing shareholders in proportion to their holding — often the quickest way to bring in fresh capital without new investors. Our team drafts the offer, runs the timeline and files the return of allotment.
Under section 62(1)(a) of the Companies Act, 2013, when a company issues further shares, it first offers them to existing equity shareholders in proportion to their holding. Key rules:
Because shares go only to existing holders, no valuation report is generally needed for an unlisted company’s rights issue — but foreign shareholders are subject to FDI pricing and reporting.
Based on section 62(1)(a) of the Companies Act, 2013 and the Share Capital and Prospectus Rules. Last updated: 27 September 2026.
Provision for rights issues
Offer period for a rights issue
Lets a private company shorten the period
Shareholders can pass on their entitlement, unless the articles restrict it
Return of allotment filed with the ROC
Apply to non-resident shareholders
Most issues are about fairness and timelines.
Some shareholders do not receive the letter of offer.
Offer closed before 15 days without valid consent.
FDI pricing and FC-GPR ignored for non-resident shareholders.
Other ways to raise or restructure capital.
Private placement to new investors.
Issuing shares from reserves.
Headroom for new shares.
Issuing certificates.
Authorised capital and articles checked.
Board approves the issue and letter of offer.
Letter of offer sent to all shareholders.
Acceptances and renunciations collected.
Shares allotted by the board.
PAS-3 filed and certificates or demat credit completed.
Close the issue with complete records.
Return of allotment filed with the ROC.
Register of members updated.
Share certificates issued or shares credited in demat.
FC-GPR within 30 days of allotment.
Share your query and our team will reply during business hours.
An offer of new shares to existing equity shareholders in proportion to their current holding.
At least 15 days and not more than 30 days; a private company can shorten this with consent of 90% of members.
Yes, by renunciation, unless the articles provide otherwise.
Generally not for an unlisted company’s rights issue, but FDI pricing rules apply to foreign shareholders.
The board can allot them in a manner that is not unfair to shareholders.
ACS – Director, Expertvuw Management Pvt Ltd
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