Eligibility for Mahindra Financial Rights Issue: A Comprehensive Guide

Investors often find themselves in a situation where they need to know whether they are eligible for a company's rights issue. In this article, we will explore the eligibility criteria for subscribing to the Mahindra Financial rights issue that took place on 21st July 2020. We will also provide a step-by-step guide on how to check your eligibility and subscribe to the issue.

Understanding Mahindra Financial Rights Issue

Mahindra Financial Services Ltd (MFS) is a leading player in the finance sector in India. On 23rd July 2020, it announced a rights issue to its existing shareholders. This article aims to provide clarity on whether an investor who bought their shares on 21st July 2020 (T2 day) is eligible to participate in the rights issue.

Eligibility Criteria and T2 Trading Rule

According to the T2 trading rule in India, the settlement of a stock takes two trading days. This means that if you bought MFS shares on 21st July 2020, you would receive them in your demat account by the record date of 23rd July 2020. However, if you sold your shares on the ex-date (22nd July), you would still be eligible for rights but the rights entitlements (REs) would be credited to your stockbroker's account first, before being transferred to your demat account. Here’s how it works:

T2 Trading Rule: The settlement period for buying shares in India is T2, meaning the shares are available in your demat account on the second trading day post-purchase. Ex-Date: The ex-date, 22nd July, is the date on which the shares start trading without rights entitlements. Record Date: The record date, 23rd July, is the official cut-off date to determine shareholder eligibility for rights issue allotment.

Check Your Eligibility

To check your eligibility for the Mahindra Financial rights issue, you should first see if you are allotted any RE shares. Here are the steps to check your eligibility:

Log in to your demat account. Check the shareholding and rights entitlement details. Ensure that the shares you hold on the record date (23rd July 2020) are still yours. If you hold the shares on the record date, you are eligible for the rights issue.

How to Subscribe to the Rights Issue

Here’s how you can subscribe to the rights issue if you are eligible:

Login to Your Broking Account: Access your online trading or demat account. Check Rights Entitlements: Review the details of your rights entitlements and the number of shares you are eligible to subscribe for. Place an Order: Use the trading interface to place a subscribe order for the rights shares. The process is similar to placing a regular buy order. Review and Confirm: Ensure that the details of the order are correct and confirm the transaction.

What If I Missed the Deadline?

If you missed the deadline for the rights issue (23rd July), you can still subscribe to the rights shares from the open market. Here’s how you can do it:

Check the Current Market Price: Look up the current market price of the rights shares on the stock exchange. Bid at the Market Price: Place a bid for the rights shares at the current market price. Monitor Market Activity: Keep an eye on market activity and adjust your bid if needed.

Disclaimer

It is important to note that the information provided in this article is for educational purposes only. Always perform your own due diligence before taking any steps related to investing or subscribing to a rights issue.

For more detailed information, please refer to the official announcements by Mahindra Financial Services and your broker.