Reliance Industries' Rs 53,125 crore rights issue; all you need to know

Mukesh Ambani-led Reliance Industries Limited (RIL) on April 30 announced its fundraising plan of Rs 53,125 crore through a rights issue. The issue has been priced at Rs 1,257 per share with a share ratio of 1:15, implying one rights equity share for every 15 fully paid-up equity shares held by the eligible equity shareholders of the company on the record date. The company fixed May 14 as the record date for the proposed issuance of 42,26,26,894 equity shares of face value of Rs 10 each. While announcing the record date, RIL had said in the same regulatory filing that the opening and closing dates of the rights issue will be informed separately.

Payment breakup

Shareholders interested to subscribe to the issue will have to pay 25 per cent on application and the rest in one or more tranches. The total amount payable per rights equity share on application is Rs 314.25 -- face value (Rs 2.50) and premium (Rs 311.75). For one or more subsequent calls as determined by the company board or committee of the board from time to time, the total amount payable per rights equity share is Rs 942.75 -- face value (Rs 7.50) and (Rs 935.25), RIL said in an exchange filing on Tuesday.

Fractional entitlement

"If the shareholding of any Eligible Equity Shareholder is less than 15 equity shares or is not in the  multiple  of  15 equity shares,  the  fractional  entitlement  of  such Eligible Equity Shareholder shall  be  ignored  for  the  computation  of  the rights entitlement," RIL also said.

"However,  the Eligible Equity Shareholders whose  fractional entitlements  are  being  ignored,  will  be  given  preferential consideration for  the allotment  of 1 (one)additional  Rights  Equity  Share each  if  they  apply  for additional  Rights  Equity  Shares  over  and  above  their rights entitlement,  if  any,  subject  to availability of additional Rights Equity Shares in this Rights Issue," RIL said.

RIL has reportedly appointed nine investment banks to manage its rights issue including Citigroup, Morgan Stanley, Kotak Mahindra Capital, JM Financial, Axis Capital and ICICI Securities. The rights issue is expected to be part of RIL's plans to become a zero-debt company by the year-end. The net debt of the company stood at Rs 1.53 lakh crore as of December 31, 2019. The rights issue is credit positive for RIL as earnings are expected to fall on account of coronavirus lockdown, Moody's recently said. RIL's Jio Platforms recently raised Rs 60,596 crore from leading technology investors -- Facebook, Silver Lake and Vista Equity Partners.

Shares of RIL were trading at Rs 1,518.30, down 58.45 points, or 3.71 per cent on NSE at the time of reporting.

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