Reliance Industries much-awaited Rs 53,125-crore rights issue will commence on May 20 and close on June 3. Ex-rights means the shares will be available for purchase without the benefit of rights issue (shares at discount price) from today. Reliance Industries stock went ex rights on May 14 and it closed 4.07% or Rs 65 lower at Rs 1,435.
Share price of Reliance Industries fell up to 4.43% to Rs 1,430 on May 14. Here's a look at five things to know before RIL's right issue opens on May 20.
This is RIL's first rights issue in three decades. Before this, RIL had carried rights issue in 1991 when it issued convertible debentures. A company releases a rights issue to its existing shareholders to buy additional new shares of a company, thereby giving them right but not obligation to buy the company's shares.
- On April 30, RIL announced its rights issue. The rights issue has been priced at Rs 1,257, a discount of Rs 210 or 14 per cent from the previous close.
- One equity share could be subscribed for every 15 equity shares held by eligible shareholders as on the record date.
- The promoters of the company will subscribe to their full entitlement to the rights issue and also to all unsubscribed portions.
- RIL could raise nearly Rs 40,000 crore on the basis of April 27 closing price if it goes for 5 per cent equity dilution. It may also help RIL meet its target to become a 'zero-net debt' company before March 2021, according to analysts.