- The Rs 53,124 crore rights issue of Reliance Industries (RIL) which closed on Wednesday received a robust response from shareholders as the issue was subscribed 1.59 times.
The Rs 53,124 crore rights issue of Reliance Industries (RIL) which closed on Wednesday received a robust response from shareholders as the issue was subscribed 1.59 times.
The equity-share distribution will take place on June 10. The rights shares are expected to be listed under separate ISIN on the exchanges on 12 June. The public rights portion was 1.22 times subscribed.
Commenting on the success of the rights issue, Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said: “The success of the issue of RIL ‘s rights, seen in the context of the prolonged national lockdown required by the Covid-19 pandemic, is also a vote of confidence of both domestic investors, foreign investors and small-scale retail shareholders in the intrinsic strength of the Indian population.
“I do not doubt that in the time to come, the Indian economy will bounce back to follow a high-growth trajectory and make India a world-leading digital nation,” he added.
According to Dealogic, the issue that opened for subscription on May 20 is the world’s largest by a non-financial issuer in the last 10 years.
The firm of Billionaire Mukesh Ambani had announced on April 30 the fundraising of Rs 53,125 crore by way of a 1:15 rights issue — India’s largest and the company’s first such issue in almost three decades.
For every 15 shares held at Rs 1,257, one share will be offered, a 14 percent discount on April 30’s closing price.
The company will use three-fourths of the proceeds of its mega rights issue as per the issue offer document for repaying some of its borrowings. After accounting for legal and other expenses, the company expects net proceeds of Rs 53,036.13 crore from the issue.
Shareholders will only have to pay 25 percent for subscribing to the mega Rs 53,125-crore rights issue of the company, and the balance will have to be charged in two installments in May and November of next year, the company said earlier.
RIL had last tapped the public for funds in 1991 when it issued convertible debentures. The debentures were subsequently converted to Rs 55 percent equity shares.
Earlier in the day, the company’s shares closed at Rs 1,542 0.41 percent higher. The benchmark BSE Sensex, on the other hand, closed down 0.84 percent to 34.109.
RIL has pursued strategic alliances across its companies as part of this strategy, thus seeking to deleverage the balance sheet.
RIL had an outstanding debt of Rs 3,36,294 crore at the end of the March Quarter. It also had Rs 1,75,259 crore cash in hand which brought the net debt position to Rs 1,61,035 crore.
Reliance has sold a minority stake in its digital unit Jio Platforms to the likes of Facebook and private equity firms as part of its balance sheet deleveraging plans.
It is also talking to Saudi Aramco about selling a fifth of their oil-to-chemicals business for a USD 15 billion bid. It has sold half of its fuel retail venture to Brookfield for Rs 25,200 crore to BP Plc for Rs 7,000 crore and telecommunication tower business.
Proceeds from such transactions would result in a reduction of the net debt of RIL.