Indiabulls Housing Finance Announces Rights Issue to Raise Funds

Indiabulls Housing Finance, a financial institution, is planning a rights issue to raise funds. Let’s explore the details of this rights issue.

Details of the Rights Issue

• Number of Rights Shares: 24.62 crore
• Face Value of Shares: ₹2 each
• Issue Price: ₹150 per rights equity share
• Record Date: February 1, 20XX
  • Only shareholders before this date are eligible for participation.
• Discount: The rights shares are offered at a discount to the current market price.
  • The rights issue price represents a discount of 19.3% based on Tuesday’s closing price.
• Entitlement: Existing shareholders will receive one rights equity share for every two paid-up equity shares they own.

On-Market Renunciation Period

• Dates: February 7 to February 8, 20XX
• Purpose: Existing shareholders can renounce their rights on the market floor.

Rights Issue Timeline

• Closing Date: February 14, 20XX

Approval for Fundraising

• Approval: The board of Indiabulls Housing Finance approved raising up to ₹5,000 crore or an equivalent sum in US Dollars via various methods.
• Share Performance: Shares of Indiabulls Housing Finance ended 2.2% higher on Tuesday at ₹186.8.

Multiple Choice Questions (MCQs):

1. When is the record date for Indiabulls Housing Finance’s rights issue?
   • A) February 7, 20XX
   • B) February 1, 20XX
   • C) February 14, 20XX
   • D) February 8, 20XX
   • Answer: B) February 1, 20XX
2. What is the issue price of the rights equity share in Indiabulls Housing Finance’s rights issue?
   • A) ₹100
   • B) ₹150
   • C) ₹200
   • D) ₹250
   • Answer: B) ₹150
3. What is the entitlement for existing shareholders in Indiabulls Housing Finance’s rights issue?
   • A) One rights equity share for every three paid-up equity shares they own.
   • B) One rights equity share for every four paid-up equity shares they own.
   • C) One rights equity share for every two paid-up equity shares they own.
   • D) One rights equity share for every five paid-up equity shares they own.
   • Answer: C) One rights equity share for every two paid-up equity shares they own.
4. When does the on-market renunciation period for Indiabulls Housing Finance’s rights issue take place?
   • A) February 1 to February 7, 20XX
   • B) February 7 to February 8, 20XX
   • C) February 14 to February 21, 20XX
   • D) February 1 to February 14, 20XX
   • Answer: B) February 7 to February 8, 20XX