Reliance Industries’ Rs 53,125 crore rights issue opened today, with the Rights Entitlements for the issue trading simultaneously on the newly-introduced platform on the exchanges, specifically for such trades.

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The RE shares ended at Rs 211.95, roughly Rs 31 higher than the spread between the closing price of the stock and the rights issue price. On Wednesday, RIL shares ended at Rs 1,437.30. The rights issue price is Rs 1,257, and so the difference between the closing price on Wednesday and rights issue price works out to Rs 180.3. The premium means that investors are willing to pay a price above this difference.

Earlier in the day, the RE shares had touched a high of Rs 212, just shy of the intra-day maximum permissible price of Rs 212.60. Earlier in the day it had touched a low of Rs 158.

Heavy volumes were seen with close to 2.4 crore shares changing hands on the RE platform. The trading in RE will close on May 29.

The Rights Entitlement platform allows the rights holders to trade their entitlement on a separate window on exchanges where holders can sell and renounce their entitlement.

The RIL’s rights issue will close on June 3, 2020. The company is offering one share at Rs 1,257 to existing shareholders for every 15 held in the company as on the record date which was May 14. The company will issue 42,26,26,894 equity shares of the face value of Rs 10 each.

Reliance Industries shareholders will have to pay only 25 percent for subscribing to the company's rights issue, and the balance will have to be paid in two installments in May and November next year, the company said.

At Rs 1,257 per share, subscribers will have to pay Rs 314.25 now, which is 25 percent of the total amount. Balance payment has to be made in two tranches in May and November next year.

Reliance will call another 25 percent in May 2021 and a balance of 50 percent or Rs 628.5 in November 2021. Therefore, the remaining $5.2 billion uncalled amount will be an inflow only in FY22.

(Disclosure:

Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)

First Published:May 20, 2020 1:30 PM IST