Heritage Foods is right there among the top five gainers on the BSE, rising 19.5% to hit an intraday high at Rs.371.45, just a tad away from its 20% UC of the day at Rs.373.25.
The stock price rose after the company announced 1:1 Rights Issue through a regulatory filing.
The company in its filing said that ‘the record date is to be notified later’.
Heritage Foods is one of the well-known brand in South India, selling milk and dairy products like Curd, Paneer, Ghee, Butter, Cheese, Fresh Cream and Ice Cream.
A right issue gives shareholders a chance to increase their exposure to the stock at a discounted price. When a rights issue is offered, the stock price gets diluted and will likely go down as more shares are issued to the market. Also, these Rights by themselves are tradeable for a limited period of time, allowing existing shareholders to sell them on the exchange to other investors.