A rights issue is when a listed company offers its existing shareholders the right to buy more shares, usually at a discount, in proportion to what they already hold. It is the company asking its own owners for fresh capital before going to the wider market. From 2025, SEBI has made this far faster: under its circular dated 11 March 2025, the entire rights issue must now finish within 23 working days from the date the company board approves it, a sharp cut from the much longer earlier timeline.

This clock, often written as T+23, applies to every rights issue where board approval falls on or after 7 April 2025. For you as a retail shareholder, your money is locked up for a shorter time, and you get a tradable instrument called a Rights Entitlement that you can sell if you do not want to subscribe.

Here is the schedule SEBI has fixed. T is the date of board approval, and every number below is in working days, not calendar days.

Within roughly a month of calendar time the whole event is done, where earlier it could drag on much longer and leave your application money idle.

Three things matter to a retail investor under the SEBI circular of 11 March 2025.

• Faster money cycle. Because the issue closes at T+23, the gap between applying and receiving shares or your refund is much shorter. Less of your capital sits frozen.
• A tradable Rights Entitlement. If you do not want to put in fresh money, you are no longer stuck. Your REs can be sold on the exchange to someone who does.
• A predictable schedule. With the milestones fixed by SEBI, you can plan your cash and decision dates instead of waiting for vague company announcements.

A Rights Entitlement, or RE, is the right itself, separated from the share. SEBI requires REs to be credited to eligible shareholders' demat accounts by T+9. Each RE lets you apply for a fixed number of new shares at the offer price.

You then have three choices:

1. Subscribe. Pay the offer price and convert your REs into new shares.
2. Sell. From T+14, trade your REs on the exchange and pocket the proceeds, useful if you cannot or do not want to invest more.
3. Do nothing. If you let the REs lapse, they expire worthless and your shareholding is diluted. This is the outcome to avoid.

Because REs trade, an informed shareholder is never forced into a zero-value loss. This is also a good moment to confirm your account details are current. See our guide on how to add or change a demat nominee so the holding is protected.

The 11 March 2025 circular adds a new option for the company. The unsubscribed portion, meaning shares existing shareholders do not take up, can be allotted to specific, identified investors named in advance, at the same issue price as everyone else, subject to transparency and disclosure requirements set by SEBI. The upside is that a company can line up a known, committed investor, a disclosed whitelist, to mop up unsold shares, so the fund-raising does not fail for want of takers.

The concern for retail shareholders is fairness. If unsold shares routinely flow to a chosen few, the wider shareholder base could feel sidelined. SEBI has tied this flexibility to disclosure so the identity and terms are visible. Your protection is to read the letter of offer and check who the identified investors are and on what terms. The same-price safeguard means they cannot get a cheaper deal than you.

For related market reforms, see how SEBI has reshaped passive products under the SEBI MF Lite framework.

When a company you hold announces a rights issue, work through these steps:

1. Read the letter of offer. It is filed by T+1. Note the offer price, the ratio, and the record date.
2. Check your demat account around T+9. Confirm the Rights Entitlements have been credited. If not, raise it with your broker or depository.
3. Decide before the deadline. Compare the offer price with the market price. If the offer price is well below market, subscribing or selling the REs both have value; letting them lapse does not.
4. Use the RE trading window. From T+14, if you will not subscribe, sell your REs rather than letting them expire.
5. Keep records. Save the application, payment proof, and allotment advice for tax and any later dispute.

For a wider view of how to assert your rights as a citizen, the The RTI Playbook is a practical companion.

Example. Dr. Shrawan Kumar Pathak held 200 shares of a company that announced a 1-for-4 rights issue. REs for 50 shares reached his demat account by T+9. He did not want to invest more, so on T+15 he sold his REs on the exchange instead of letting them lapse, recovering value he would otherwise have lost.

If a company or registrar mishandles your rights issue, for example REs not credited, allotment errors, or refund delays, the grievance route is SEBI SCORES, SEBI's online complaint platform. Lodge the complaint with your client ID, the company name, and the dates. If you are unsure which body handles your issue, our guide on which regulator to complain to helps you pick, and to draft a formal information request to a public authority, the AI RTI Drafter can help.

Under SEBI's circular dated 11 March 2025, a rights issue must be completed within 23 working days, known as T+23, from the date of board approval. This applies to issues where the board approval falls on or after 7 April 2025.

A Rights Entitlement, or RE, is the right to apply for new shares at the offer price, credited to your demat account by T+9. From T+14 you can sell your REs on the exchange if you do not want to subscribe, instead of letting them lapse.

If you neither subscribe nor sell your Rights Entitlements, they lapse and expire worthless, and your shareholding is diluted. The RE trading window exists precisely so you are not forced into this loss.

Yes. The 11 March 2025 circular lets a company allot the unsubscribed portion to specific, identified investors at the same issue price, subject to SEBI's transparency and disclosure requirements. They cannot pay less than other shareholders.

Use SEBI SCORES, SEBI's online grievance platform, for problems like REs not credited, allotment errors, or refund delays. Quote your client ID, the company name, and the relevant dates.

The 23 working day timeline applies where board approval is on or after 7 April 2025, per SEBI's circular dated 11 March 2025. Issues approved before that date follow the earlier rules.

Sources

• SEBI, circular dated 11 March 2025, no. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/31, on streamlining the rights issue process.
• SEBI, applicability to rights issues with board approval on or after 7 April 2025.
• SEBI SCORES, the Securities and Exchange Board of India online grievance redress system.