Conclusion
Rights Issue offers both an opportunity and a challenge for the investors. This will allow existing shareholders to buy more shares at cheap prices, keeping a scope to increase investment value while maintaining ownership share of their company.
It also carries risks, such as dilution and the need to be really careful about the financial health of the company and its motive for raising capital. Investors must trade off the benefits accruing from discounted shares and long-term growth against the downsides associated with it before investment. A well-thought-of decision will enable investors to take advantage of a Rights Issue with minimal risks.