Final leg of Reliance Rights Issue commences on Monday
May 31, 2020
Mumbai (Maharashtra) [India], May 31 : The trading in Reliance Industries Limited (RIL's) Right Entitlements (RIL-REs) closed on Friday, May 29, 2020, on a high note, which ushers in the final leg of RIL Rights Issue process. The holders of Right Entitlements now have until Wednesday, June 03, 2020, to convert REs into RIL shares by paying Rs 314.25 each to the company, according to market data.
In online trading, RIL-REs sold like hot cakes. Buyers consistently outnumbering sellers and willing to pay a premium over and above the intrinsic value of REs underscored the strong interest in RIL REs. The Rights Entitlements allotted in 1:15 ratio created nearly Rs 9,500 crore wealth for the RIL shareholders. This has set the tone for the final leg of the Rights Issue process.
Buyers spent an aggregate Rs 2,243 crore ($300 million) in seven trading sessions to own RIL-REs, according to market data.
The REs bought on the BSE and NSE were delivered to the buyers' demat accounts as per the 'T+2 rolling settlement basis', where 'T' refers to the date of trading.
Now that the trading in Right Entitlements is over, the RE holders have until Wednesday, June 03, 2020 to use up these Entitlements to apply for partly paid RIL shares. Each RE can be converted into one partly paid RIL share by paying Rs 314.25 each.
There is no doubt the strong demand for REs will translate in very high subscription of the Rights shares. It is a well-observed phenomenon that in such issues with assured allotment, institutional investors invest in the last few days.
If not subscribed by June 03, the retail investors will run the risk of permanently losing out on the Rights Issue benefits. Their unsubscribed portion will be allotted to those applying for more shares than their Right Entitlements.
Finally, RIL Promoter Group have confirmed that they will subscribe to all of the unsubscribed portion in this Issue if any.
According to media, LIC is planning to invest Rs 2,500 - Rs 3,000 crore in RIL's Rights Issue.
It was reported that French investment bank Societe Generale bought 32,58,300 Rights Entitlements of Reliance Industries (RIL RE) on May 20, the very first day of its listing.
Those subscribing to the Rights Shares by June 3 can expect allotment of partly paid RIL shares by Thursday, June 11, 2020, in their demat accounts.
These partly paid shares will be separately listed on stock exchanges and their trading will begin from Friday, June 12, 2020, according to the issue schedule given in the letter of offer.
