The Indian capital market is witnessing a potential record-breaking year for rights issues, significantly propelled by a monumental offering from the Adani Group. The flagship company, Adani Enterprises, opened a massive ₹24,930 crore rights issue on November 25, 2025, a move that could redefine fundraising trends for the current financial year.
A Potential Record-Breaking Year
If this rights issue is fully subscribed, it will have a transformative effect on the annual figures. The total collections from rights issues for the financial year 2025-26 are projected to soar to ₹39,439 crore. This impressive number would place the year on par with the previous highs witnessed in 2019-20 and 2020-21. This surge is not solely dependent on the Adani issue; the segment was already showing robust health. For the first six months of the fiscal year, ending September 2025, collections had already reached ₹14,509 crore, a strong performance compared to the ₹19,712 crore raised in the entire preceding financial year of 2024-25.
Understanding the Rights Issue Mechanism
A rights issue is a method for listed companies to raise additional capital by offering new shares exclusively to their existing shareholders. These shares are typically issued at a discount to the current market price, providing an incentive for shareholders to participate. For Adani Enterprises, the issue price was set at a 24% discount to the market price on the opening date. This strategy serves multiple purposes: it allows promoters to maintain their ownership stake without dilution, and it generates crucial cash for the business. The funds raised are often earmarked for expansion plans, debt repayment, or simply strengthening the company's cash reserves.
A More Broad-Based Market Emerges
An analysis of the rights issue landscape reveals a significant shift from the past. The record collections of 2019-20 (₹55,642 crore) and 2020-21 (₹64,059 crore) were heavily concentrated. In 2019-20, just three companies—Vodafone, Bharti Airtel, and Piramal Enterprises—accounted for a staggering 95% of the total. Similarly, in 2020-21, Reliance Industries alone contributed 83% of the funds raised.
In contrast, the current trend is far more broad-based. The past four financial years have seen a wider pool of listed companies opting for this fundraising route. A telling statistic is that in 2024-25, 142 companies closed a rights issue, which is 15 more than the total for the entire eight-year period from 2013-14 to 2020-21. The first half of the current fiscal year has already seen 69 companies conduct rights issues. This activity coincides with a vibrant period for Initial Public Offerings (IPOs), indicating strong overall market liquidity and investor appetite.
The success rate has been notably high. In the 18 months from April 2024 to September 2025, only 21 out of 211 companies did not see their rights issue fully subscribed. The top 10 issuers, which included companies from the Mahindra and Tata groups, each saw their issues oversubscribed.
Overcoming Logistical Hurdles and Future Outlook
Despite this surge, rights issues have traditionally been the least popular method for raising equity capital. In four of the past five years, their share of total equity fundraising did not even cross 10%. One major reason has been the time-consuming logistics involved, as the process requires participation from all shareholders.
However, the Securities and Exchange Board of India (Sebi) has implemented key reforms to address this. In March 2025, the regulator revised rules to drastically speed up the process from 4-6 months to just 23 working days. Key changes included eliminating the draft filing with Sebi, relaxing the minimum subscription requirement, and allowing unsubscribed shares to be allotted to other investors.
This streamlined process makes the rights issue route more attractive for promoters who wish to avoid dilution of their stake, which happens with Qualified Institutional Placements (QIPs), or to avoid bringing in the entire capital themselves, as required in a preferential issue.
Looking ahead, the broader market sentiment will be crucial. While the current environment is favourable, there are underlying murmurs about high valuations and a potential market correction, particularly in the red-hot artificial intelligence sector. Furthermore, the fact that more than half of IPO proceeds in the last five years have gone to promoters and investors selling shares, rather than into the companies, is often seen as a sign of stretched valuations. Nevertheless, the successful subscription of major rights issues like Adani's signals strong underlying confidence in the Indian corporate story.
