Mumbai: Promoters of three Reliance Group companies—Reliance Communications Ltd (R-Com), Reliance Power Ltd (R-Power) and Reliance Capital Ltd (R-Cap)—have rejigged their shareholdings in these firms.
The promoter of R-Com has also bought additional shares in the telecom operator.
According to stock market filings issued on Thursday by the companies, there was an inter-se transfer of shares by way of gifts to some of the holding firms of the three entities by other firms in the group. All the share transfers happened on 14 February.
AAA Communications Pvt. Ltd, a promoter of R-Com, transferred 50 million shares in the company to ADA Enterprises and Ventures Pvt. Ltd, and 35 million shares to AAA Industries Pvt. Ltd, both promoters of the telecom firm. The total stake transferred amounts to 4.12% of R-Com’s paid-up share capital.
AAA Communications, in turn, received 15 million shares in R-Com from Solaris Information Technologies Pvt. Ltd, another R-Com promoter.
The total stake transferred among these companies was worth Rs974 crore on 14 February, when R-Com’s closing share price on the Bombay Stock Exchange (BSE) was Rs97.40.
The promoters of R-Com also bought about 7.4 million shares of the company in open market purchases between 21 December and 5 February, show the disclosures made on the bourses. This is net of 1.19 million shares sold by them in the same period.
Some 15 firms and individuals are named as acquirers, sellers and persons acting in concert, including Reliance Group chairman Anil Ambani, his wife Tina Ambani, mother Kokila D. Ambani, and sons Jaianmol A. Ambani and Jaianshul A. Ambani.
“The reasons for promoters increasing their holding (in R-Com) could vary from lending credence to the company’s operations by committing further capital, or supporting the stock price,” said V.K. Sharma, head of private broking and wealth management at HDFC Securities Ltd. “However, the stake increase is too small to be of any material impact.”
Anil Ambani met officials of the Central Bureau of Investigation on Wednesday with regard to an ongoing probe into a multi-crore spectrum allocation scam.
Reliance Group did not reply to an email sent after the filings.
AAA Power Systems (Global) Pvt. Ltd, a holding company of R-Power, the power generation arm of Reliance Group, transferred 100 million shares each to two other promoter firms— AAA International Capital Pvt. Ltd and Reliance Enterprise and Ventures Pvt. Ltd.
The total stake transfer represents 7.13% of the paid-up share capital of R-Power, valued at Rs2,354 crore on the date of transfer, when R-Power’s shares ended at Rs117.70.
“Transfer of shares under a gift is an exempt transfer as per the existing tax laws and, hence, not subject to capital gains taxation,” said Sunil Gidwani, executive director-tax and regulatory services, PricewaterhouseCoopers Pvt. Ltd. “Unlisted shares received as gift by a firm or private company is taxable as income from other sources and the fair value of the shares so received is considered as taxable income. However, gift of listed shares is specifically excluded from the tax net.”
AAA Enterprises Pvt. Ltd, a promoter of R-Cap, Reliance Group’s financial services company, gifted 8 million shares, or 3.26% of R-Cap’s paid-up share capital, to another promoter, AAA Infrastructure and Engineers Pvt. Ltd. The value of the total share transfer at a share price of Rs441.20 on 14 February is Rs352.96 crore.
A tax consultant said the share transfers could have been done to strengthen the balance sheets of the receiver companies. “There might be some plans to raise capital on the balance sheet of the company on back of the equity holding,” the consultant said on condition of anonymity.
On Thursday, R-Cap’s shares closed at Rs478.35 apiece on the BSE after rising 0.38%. R-Com’s shares ended up 0.25% at Rs99.95 and R-Power’s at Rs120.80, down 0.74%, while the Sensex gained 1.13% to close at 18,506.82.
R-Power has sued HT Media Ltd, publisher of Mint, in the Bombay high court over a 12 May front-page story in Mint that it disputed. HT Media is contesting the case.