RIL’s rights issue gets robust response from investors, subscribed 1.59 times; shares likely to list next week

Reliance Industries completed India’s biggest ever rights issue of Rs 53,124 crore on Wednesday, and received a rave response from the eligible shareholders as the issue got subscribed 1.59 times. The rights issue witnessed huge interest from small and institutional investors alike. The allotment of the equity shares will take place on or about June 10, 2020, and the listing of rights shares on BSE and NSE is expected to take place on June 12 under separate ISIN, according to the company’s press release. The public portion of the rights issue was subscribed 1.22 times. RIL’s first rights issue in three decades opened for the subscription for shareholders on May 20 and closed on May 29.

Market regulator Sebi introduced Rights entitlement (RE) platform earlier this year. RIL became the first issue where shareholders received their rights entitlements in demat. RIL rights issue is the biggest in the world by a non-financial issuer in the last 10 years, according to data from Dealogic. The only other non-financial issue close to this size was the $7 billion issue by Bayer AG in June 2018. “The success of RIL’s rights issue, seen in the context of the prolonged nationwide lockdown necessitated by the Covid-19 pandemic, is also a vote of confidence, by both domestic investors, foreign investors and small retail shareholders, in the intrinsic strength of the Indian economy,” said Mukesh Ambani, Chairman and Managing Director, Reliance Industries while commenting on the success of the rights issue.

On April 30, RIL had announced fundraising of Rs 53,125 crore by way of a 1:15 rights issue where one share was offered for every 15 shares held at Rs 1,257, a 14 per cent discount to the closing price for April 30. Nearly three decades ago in 1991, Reliance Industries had issued convertible debentures which were converted into equity shares at Rs 55 per share, according to a PTI report.

Meanwhile, under the mega Facebook-Reliance Jio deal, where Facebook announced to invest Rs 43,574 crore for 9.99 per cent equity stake in Jio Platforms in April, it will acquire via a new entity — Jaadhu Holdings LLC, as per regulatory documents.

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