RIL, Max Group subscribe to EIH rights issue

RIL, Max Group subscribe to EIH rights issue

New Delhi: Mukesh Ambani-led Reliance Industries and Max Group chairman Analjit Singh have fully subscribed to the rights issue of hospitality firm EIH Ltd, which is raising Rs1,178.86 crore through the process.

While email sent to EIH Ltd to get details of its rights issue that closed on Tuesday remained unanswered, RIL and Singh confirmed about their subscription.

“We have subscribed to the issue," a RIL spokesperson said.

Similarly, Max India chairman Analjit Singh, who held 4% in EIH before the issue, said: “Yes I have subscribed to the rights issue. There is no change in the shareholding as the issue has been subscribed on a pro rata basis."

ITC, which is another significant shareholder in EIH Ltd that operates the Oberoi and Trident brand of hotels and resorts, however, did not answer the queries.

The EIH rights issue, which opened on 1 March has been closely followed by market watchers, as ITC and RIL are on the verge of exceeding the open offer threshold of a 15% stake in the hospitality major.

Before the issue, ITC held 14.98% stake and RIL 14.8% in EIH Ltd.

In February the company had announced that it would raise Rs1,178.86 crore through the issue of shares at a price of Rs66 apiece.

It had said five equity shares will be issued for every 11 equity shares held by shareholders as on the record date of 22 February.

A rights issue is an additional issue of shares by a company to existing shareholders with the objective of raising fresh funds for financing future growth.

According to experts, the rights issue will give the existing investors a good opportunity to invest in a strong company like EIH.

EIH’s scrips closed the day at Rs81.70 per share on the Bombay Stock

Exchange, up 7.01% from the previous close.