Reliance Plans India’s Biggest Rights Issue; Aims To Raise Rs 53,215 Crore Via Rights Offer At Rs 1257 A Share
Mukesh Ambani’s Reliance Industries Limited is planning to raise a whopping Rs. 53,125 crore with the help of a rights offer. Moreover, this is the RIL’s first fundraise from the public in about thirty years and the largest rights that have been offered by an Indian company.
Just last year, Vodafone Idea and Airtel had also come up with a similar plan, and offered rights of about Rs. 25000 crore each.
Find out all the details about RIL’s newest development right here!
Ambani’s Reliance Industries Limited Plans India’s Largest Rights Offer
RIL’s plan to raise Rs. 53,215 crore through a rights issue is the biggest equity fundraise ever seen in Indian capital markets. They will be priced at Rs. 1257 a share. This is a 14% discount to Thursday’s close on BSE which was at Rs. 1467.
At 50% shareholding, Ambani will need to bring in at least Rs. 26,600 crore in order to fund his subscriptions fo the rights issue.
The existing shareholders of RIL will be able to buy one share for every 15 shares held, as stated by the company in a release. This will result in an equity dilution of about 7%.
Diversified Earnings And Conservative Balance Sheet To Place Reliance at an Advantage
In the statement issued by the company, it says, “The proposed Rights Issuance will be the first by RIL in three decades. The issue will be structured as partly paid shares and will enable shareholders to phase out the outlay on their investment over a period of time.”
The promoter and the promoter group of the company have confirmed that they will be subscribing to the full extent of their aggregate rights entitlement. Additionally, they will also be subscribing to all of the unsubscribed shares in the Issue.
RIL has stated that if any non-promoter does not participate in the RIL rights offering, their portion will be chosen by the promoters. This will lead to the stakes of the company going up even more.
It says, “Diversified earnings S&P and Moody’s have both reaffirmed Reliance’s investment grade ratings. Transformative strategic investments in Consumer facing business have firmly re-positioned Reliance as India’s pre-eminent Consumer/Technology company. Jio and Retail platforms underpin Reliance’s participation in the next leg of value creation in India.”
The statement also says that the diversified earnings streams and conservative Balance Sheet help to place Reliance at an advantage so as to face any ongoing macro challenges.