With the 10000 mark breached for the Sensex, the markets seem soft and direction driven. Right now does not seem to be the right time to come out with a rights issue. A rights issue would result in devaluation of the stock and they are offered at a discount to the market price and this makes the premium existing on the capital appreciation less attractive for the current investors. With stocks right now trading at lifetime lows, its bad timing for companies like Tata Motors and Chettinad Cement to come out with a rights issue. They demand is expected to be frozen....Certainly not the right time for a rights issue.Sunday, October 19, 2008
Not The Right Time for Rights Issue
With the 10000 mark breached for the Sensex, the markets seem soft and direction driven. Right now does not seem to be the right time to come out with a rights issue. A rights issue would result in devaluation of the stock and they are offered at a discount to the market price and this makes the premium existing on the capital appreciation less attractive for the current investors. With stocks right now trading at lifetime lows, its bad timing for companies like Tata Motors and Chettinad Cement to come out with a rights issue. They demand is expected to be frozen....Certainly not the right time for a rights issue.
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