RIL's right shares to list on June 15

RIL's Rs 53,124 crore rights issue was India's largest-ever rights issue. It was also the world's largest rights issue by a non-financial institution in the last ten years.

Reliance Industries' shares offered in the just-concluded rights issue will be listed on stock exchanges on Monday, concluding the issue in just 42 days.

"Effective from Monday, June 15, 2020, the new securities of Reliance Industries Ltd (Scrip Code: 890147) shall be listed and permitted to trade on the Exchange in the list of 'A' Group of Securities," BSE said.

RIL completed the allotment of partly paid-up shares to the demat accounts of its shareholders on June 11 under the recently concluded rights issue, the company had informed the stock exchanges on Thursday.

The rights issue reached from announcement to allotment within just 42 days entirely on a digital platform, defying the constraints of the COVID-19 induced lockdown.

RIL's Rs 53,124 crore rights issue was India's largest-ever rights issue. It was also the world's largest rights issue by a non-financial institution in the last ten years.

It ended last week with a 1.6 times subscription - a commitment exceeding Rs 84,000 crore.

The issue generated interest globally with Foreign Portfolio Investors (FPIs) using the opportunity to invest in the company, notwithstanding the COVID-19 led economic slowdown.

The number of FPIs holding RIL shares increased to 1,395 on June 11, 2020, as against 1,318 on March 31, 2020, according to stock exchange data.

The FPIs' stake in RIL now stands at 24.15 per cent, up from 23.48 per cent at end-March 2020.

A rights issue is simpler to do as it reaches out to existing shareholders and offers them a fixed, discounted price.

It also enables existing shareholders to lock into more equity.

In line with their commitment to subscribe to every unsubscribed share in the rights issue, the RIL promoter group led by billionaire Mukesh Ambani applied for more than their entitlement under the rights issue and received an allotment of 22.5 crore partly paid shares.

On the expanded post issue equity of 676.2 crore equity shares, the promoter group's stake now stands increased to 49.14 per cent, from 48.87 per cent at end-March 2020, according to the company's filing.

The partly paid-up shares with a face value of Rs 2.50 will be separately listed on stock exchanges on Monday under the new ISIN code IN9002A01024.

The intrinsic value of a 25 per cent paid-up share will be one-fourth of the fully paid-up share price.

Thus, if the fully paid-up share is trading at Rs 1,600, the intrinsic value of a partly paid-up share will be Rs 400.

Any higher price it commands will be the premium a buyer is willing to pay to own the partly paid-up share.

The Rights Equity Shares were issued as partly paid-up and an amount of Rs 314.25 per share was payable on application (of which Rs 2.50 was towards face value of rights equity share and Rs 311.75 towards the premium amount of rights equity share).

The remaining 75 per cent is to be paid next fiscal.

Photograph: Reuters