A rights issue is a type of corporate action in which a company offers new shares to its existing shareholders at a discounted price. This gives shareholders the opportunity to increase their ownership in the company at a favorable price. Rights issues are typically used by companies to raise capital for expansion, acquisitions, or other business purposes.
HSBC is a global banking and financial services company. In 2023, HSBC announced a rights issue to raise capital to support its growth plans. The rights issue was offered to existing HSBC shareholders on a pro rata basis, meaning that each shareholder was entitled to purchase a certain number of new shares based on their existing shareholding. The rights issue was priced at a discount to the prevailing market price of HSBC shares, making it an attractive investment opportunity for shareholders.
