What is rights offer?

A rights offer is a way for a company to raise capital by giving existing shareholders the opportunity to purchase additional shares at a discounted price, usually in proportion to their current holdings. This is typically done to raise funds for expansion, pay down debt, or improve liquidity. Shareholders are often given a specific time frame to exercise their rights, and any unexercised rights may be offered to other investors. This method allows companies to secure funding while giving existing shareholders the chance to maintain their ownership percentage.