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Market Intelligence › Basic Terminologies
What an RE is, how it arrives in your demat, and its expiry
Published by The Retail Trader · AUG 05, 2026 · Market Basics
In a rights issue you get the right to buy new shares. That right has its own tradeable form — the rights entitlement, or RE — and many people are not even aware it exists.
On the record date, the RE is credited to the demat of eligible shareholders, with a separate ISIN. It trades on the exchange like normal for a few days.
You can either use the RE to apply for the new shares, or sell the RE in the market.
An RE has an expiry, and that is the biggest risk:
• If you neither apply nor sell, the RE expires and goes to zero.
• The trading window for the RE is short — only a few days.
• The liquidity of the RE is much lower than the underlying stock.
• Applying has a separate process and a separate deadline.
When a rights issue is announced, write two dates in your calendar — the last day of RE trading and the last day of the application. Doing nothing here is not a neutral choice; it means giving up the entire value.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no guaranteed-return claim, and is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.