Mumbai: Anil Ambani and his promoter firms on Thursday raised their shareholding in Reliance Infrastructure Ltd, or R-Infra, to 42.73% by infusing Rs1,821 crore and converting a portion of their share warrants into equity.
The promoters had held 37.74% in R-Infra until now, and hold another tranche of 23.3 million warrants—instruments that can be converted to equity shares at a specified price within a specified time frame. The warrants were issued at Rs929 a share last May and a full conversion would take promoter shareholding in R-Infra to 48% while injecting Rs2,164.57 crore into the firm.
Following the announcement, R-Infra’s shares closed 1.73% higher at Rs1,015.65 on the Bombay Stock Exchange, rising more than the bellwether index Sensex, which closed 0.94% higher at 17,692.62 points.
The company said in a statement the infusion has increased its net worth to Rs16,000 crore and raised its borrowing capacity from Rs24,000 crore to Rs32,000 crore at a debt-equity ratio of 2:1, “thereby enabling greater participation in mega growth opportunities in high growth infrastructure areas”.
The effective purchase price, however, was much higher at about Rs1,112 per share “after taking into consideration the upfront payment of Rs783 crore already received on warrants issued earlier, which were cancelled”, R-Infra said.
The converted warrants were issued shortly after a previous lot of higher-priced warrants were cancelled by the firm. The promoters held 43 million warrants then, convertible at a price of Rs1,822 a share, and with a convert-by date of 19 July 2009.
At the time, however, the conversion was unlikely as the market price was nearly half of the pegged price. After forfeiting the initial sum paid by the promoters to secure the older warrants and cancelling them, R-Infra issued a fresh lot of warrants to Anil Ambani and associates at Rs929 a share.