Reliance Industries share price erased early losses and moved higher, in an otherwise bearish session on Friday, ahead of its partly paid-up rights shares listing on bourses on June 12.
Witnessing an overwhelming response, the partly paid-up rights shares of Reliance Industries' was the biggest ever Rs 53,124-crore rights issue and largest such offering by a non-financial company in the world in the past 10 years. It was subscribed 1.22 times and received bids worth Rs 84,000 crore on June 3.
The RIL stock earlier opened with a loss of 2.76% today and touched an intraday low of Rs 1495 on BSE. Later, the share gathered momentum and rose 3.61% to an intraday high of Rs 1593 against the last closing value of Rs 1,537 on BSE. The stock currently trades a mere 3.24% away from 52 week high of Rs 1,624.
Reliance Industries stock stands higher than 5, 20, 50, 100 and 200-day moving averages. RIL share price has risen 6.15% in one month and 3.77% since the beginning of the year. The market cap of the oil conglomerate stood at Rs 10,62,484.01 crore as of today's session.
RIL Rights Entitlement (RIL RE) closed on May 29 with a 7% premium over its intrinsic value, which is the difference between RIL share price and Rights issue price of Rs 1,257. RIL has offered existing shareholders equity shares in the ratio of 1:15, that is, one new share for 15 held at a discounted price of Rs 1,257.
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 in the regulatory filing to the stock exchanges. The oil-to-telecom conglomerate said that the allotment of equity shares will happen on or about June 10, 2020.
Commenting on the success of the rights issue, Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, said, "I express my sincere thanks to our dear and esteemed shareholders for participating in this Rights Issue and making it a new and proud landmark in the history of India's capital market."
Angel broking in its note has given 'Accumulate' action to the stock with a target price of Rs 1,748, a 13.7% upside from the current market price of Rs 1,538. It added, "Reliance Industries. (RIL) is India's largest company with a dominant presence in Refining, Petrochemicals, Telecom and Retail businesses. Telecom business to witness robust growth over next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players."
The initiatives taken by the company are aimed to make it net-debt free by the end of March 2021.