RIL would offer rights to buy one share for every 15 held by investors at Rs 1,257 apiece.
The stock went ex-rights on Wednesday and Thursday was the record date to determine the shareholders to be eligible for the biggest ever rights issue in India.
The oil-to-telecom major said it would offer rights to buy one share for every 15 held by investors at a price of Rs 1,257 apiece.
Despite the recent fall in RIL shares, Friday’s closing of Rs 1,458.90 for the stock was still 16 per cent higher than the rights issue price.
In a presentation, the company said it has a track record of creating significant value for shareholders. It called Reliance the best proxy of India’s consumption-driven and tech-propelled growth story.
“We believe RIL’s diversified businesses, asset monetisation and capital raising in the current environment make it financially stable. In addition, the expansion of RIL’s omni-channel retail and digital businesses should allow it to grow rapidly,” HSBC said earlier this week.
Analysts are quite upbeat on Reliance’s first-ever capital raising via a rights issue, especially after the recent infusion of capital into Reliance Industries by Facebook. They feel the issue would reduce investor focus on asset divestments.
The company has seen 19 per cent compounded annual growth rate in its market value in the last 25 years. On the earnings front, its revenue has growth 20 per cent while its net income has risen 16 per cent during the 25-year period. Ebitda growth has been close to 18 per cent during the same period.
CLSA, which has a price target of Rs 1,770 on the stock, said while the January-March period was weak for the company, but the asset monetisation plan should help the stock.
It is to be noted that Reliance Industries has reiterated that due diligence is being done by and has filed for the separation of its oil and chemicals (O2C) business into a wholly owned subsidiary.
Falling oil prices are disturbing the financial position and attractiveness of oil assets and there is no increment news flow from Aramco. But analysts are confident that the deal will go through.
The company recenty announced a $5.7 billion deal with by Facebook into Jio Platforms for 9.99 per cent stake. This was the largest ever FDI in technology sector in India.