Understanding the Difference Between UPL and UPL RE: A Simple Guide

UPL Limited, a leading agrochemical company, recently announced a rights issue to raise additional capital. If you’re wondering about the difference between UPL and UPL RE, here’s an easy-to-understand explanation:

Mon Dec 16, 2024

1. UPL (UPL Limited Shares):

- What Are They?
These are the regular, fully paid-up equity shares of UPL Limited that trade on stock exchanges under the ticker symbol “UPL.”

- Investor Action: Shareholders can freely buy or sell these shares at the prevailing market price during trading hours.

2. UPL RE (UPL Rights Entitlement):

- What Is It?
“RE” stands for Rights Entitlement. When UPL announces a rights issue, existing shareholders are granted rights entitlements. These allow them to purchase additional shares at a predetermined price, typically lower than the current market price.

- Trading Symbol:
These entitlements are traded separately on the stock exchange under the symbol “UPL-RE.”

- Investor Action:
- Subscribe: Use your REs to subscribe to the rights issue, purchasing additional shares at the specified price.
- Sell: If you choose not to subscribe, you can sell your REs in the market.
- Lapse: If you neither subscribe nor sell the REs, they expire worthless after the specified period.

Key Points to Consider

- Subscription Period:
The rights issue is open from December 5, 2024, to December 17, 2024.
- Entitlement Ratio:
Shareholders are entitled to 1 rights share for every 8 fully paid-up equity shares held as of the record date, November 26, 2024.
- Issue Price:
The rights shares are priced at ₹360 per share, which may be lower than the current market price of UPL shares.

- Payment Terms:
An initial payment of ₹90 per share is required on application, with the remaining amount payable in future calls as determined by the company.
Example Scenario:
- Suppose you own 80 shares of UPL as of November 26, 2024. You are entitled to purchase 10 additional shares (80 ÷ 8) at ₹360 each through the rights issue.
- You can choose to:
- Subscribe to these shares by paying ₹90 per share now and the rest later.
- Sell your REs in the market if you don’t wish to invest further.

Conclusion:
- UPL Shares: These are the regular equity shares that represent ownership in UPL Limited.
- UPL RE: Temporary rights entitlements that allow existing shareholders to buy additional shares at a discounted price during the rights issue period.

Final Thoughts:
It’s important to decide promptly whether to subscribe to the rights issue, sell your REs, or let them lapse. Your choice should align with your investment strategy and financial goals.

By understanding these distinctions, you can make well-informed decisions and potentially benefit from UPL’s growth opportunities.

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Understanding the Difference Between UPL and UPL RE: A Simple Guide

1. UPL (UPL Limited Shares):

2. UPL RE (UPL Rights Entitlement):

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