Reliance Industries successfully closes mega Rs53,125 crore rights issue with 1.6 times subscription
The issue opened for subscription on 20 May, along with a simultaneous rights entitlement (RIL RE) platform, wherein for the first time in India shareholders could freely trade their rights entitlement on a stock exchange
PremiumThe ₹53,125-crore rights issue of Reliance Industries Ltd (RIL) was subscribed 1.6 times as it closed on Wednesday, in a major boost to the oil-to-telecom conglomerate’s efforts to erase its debt.
“The public portion of the rights issue was subscribed 1.22 times," RIL said in a statement on Wednesday. The shares will be allotted on or around 10 June and the rights shares are expected to be listed on BSE and NSE on or around 12 June, RIL added.
RIL’s rights issue, its first-ever in nearly three decades, is the largest such sale in India. The issue opened for subscription on 20 May, along with a simultaneous rights entitlement (RIL RE) platform, wherein for the first time in India shareholders could freely trade their rights entitlement on a stock exchange.
According to stock exchange data, the rights priced at ₹1,257 per share received bids for 551.30 million shares on BSE and 120.29 million shares on NSE.
Shares of RIL rose 0.41% to ₹1,542.45 on Wednesday. Since the rights issue opened, the stock has risen 9.42% while it has gained only 2.79% this calendar year so far.
The rights issue saw robust demand from both RIL promoters and public shareholders, said two people aware of the development, requesting anonymity.
“Most of the large public shareholders of the company, including LIC, subscribed to the shares. Index funds, who can’t hold partly paid-up shares, had sold their rights entitlement using the stock exchange platform available to sell these entitlements," said one of them.
“The success of RIL’s rights issue, seen in the context of the prolonged nationwide lockdown necessitated by the covid-19 pandemic, is also a vote of confidence, by both domestic investors, foreign investors and small retail shareholders, in the intrinsic strength of the Indian economy," said Mukesh Ambani, chairman of RIL.
The rights issue marks another milestone in the extensive fundraising efforts of Reliance Industries despite the turmoil in the capital markets from the coronavirus pandemic.
Ahead of the issue, Reliance Industries sold a 14% stake in Jio Platforms to multiple investors, including Facebook Inc., in deals worth a combined ₹67,194.75 crore.
The initiatives are aimed at helping RIL reach its ambitious goal of becoming a zero net-debt company by March 2021. RIL had a net debt of ₹1.53 trillion on 31 December.
Ashwin Ramarathinam contributed to this story.
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