Reliance Industries Ltd's name will go down in the history of Indian stock markets on Wednesday as the only company for which a special trading session was held to discover the price of its shares following its demerger necessitated by a settlement between the Ambani siblings.
Shares of RIL, fancied by the investor community and which carries the second highest weight on the key index, would command a new price after the company spun off four new entities as part of the ownership settlement in the Reliance group founded by late Dhirubhi Ambani.
As per the de-merger scheme, 100 shares of RIL would split into equal number of RIL shares along with five shares of Reliance Capital Ventures Ltd, 7.5 shares of Reliance
Energy Ventures Limited, 100 shares of Reliance Communications and 100 shares of Global Fuel Management Ventures.
In such a scenario, the market capitalisation of RIL could undergo a change depending on the price during the special session on January 18 being termed as "RIL Price Discovery Session".
All the four new entities, being created as Special Purpose Vehicles, to carry the holdings of RIL shareholders in the companies under the charge of younger brother Anil would be listed soon.
The change in market capitalisation of RIL would result in the indices requiring adjustment in base market capitalisation, as two of the four new separate corporate entities due to de-merger are not currently listed and traded and valuing the post de-merger price of RIL is not possible by the exchanges.
The special trading will start at 0800 and end at 0900 on January 18.
The volume weighted average price of RIL during this session would be used for adjustment to the base market capitalisation of the respective indices. No index would be calculated during the special trading session and the normal market would commence at 0955 for regular trading.
The trades done for RIL during the special trading session shall be settled along with the normal market trades of January 18.
The Bombay high court had cleared the company's petition for sanctioning the scheme of arrangement for the demerger on December 9, last year.
RIL is expected to continue to perform well even after the demerger as a fully-integrated petroleum-to-petrochemicals conglomerate. The company currently enjoys a healthy operating margin.
RIL can use its strong cash flows and low-debt exposure to finance further expansion, particularly into retail.
Presently, the company's market capitalisation is around Rs 1,21,667 crore (Rs 1216.67 billion) while the valuations of four new entities of the ADAE group's market cap is put at Rs 25,000 to Rs 30,000 crore (Rs 250-300 billion) with the price band of Rs 200-250 for these companies.