Rights issue: RIL shares set for Monday listing

June 13, 2020 2:00 AM

The partly paid-up shares will be open for trading for existing investors from Monday. According to market experts, the listing of partly paid-up shares is good for investors.

The rights shares that are going to be listed have a partly paid-up amount of Rs 314.25. The rights shares that are going to be listed have a partly paid-up amount of Rs 314.25.

By Urvashi Valecha
Reliance Industries (RIL), India’s most valued company by market capitalisation, is set to list its partly paid-up equity shares on Monday. The rights shares that are going to be listed have a partly paid-up amount of Rs 314.25. The partly paid-up shares will be open for trading for existing investors from Monday. According to market experts, the listing of partly paid-up shares is good for investors.

Deven Choksey of KR Choksey says, “Rights shares are becoming an attractive investment proposition as investing at an expected listed price or below Rs 600 could give a return on investment of more than 60% when it appreciates to a projected Rs 1,000 in the next 9-12 months, against the projected price of Rs 2,000 fully paid-up RIL then.” The move comes after the oil-to -telecom conglomerate drew a close on its Rs 53,124-crore rights issue on June 3; it was the biggest ever raised by a non-financial company in India. The issue had been subscribed 1.6 times The price per share for the rights issue was Rs 1,257.

The shares will have a face value of Rs 10 and a paid-up value of Rs 2.5. Market experts see the partly paid up shares list at a premium. Deepak Jasani, head – retail research, HDFC Securities, said, “The price of partly paid-up shares will be derived from the underlying main shares. Going by the stock’s current market price of around Rs 1,590, the partly paid shares could start trading at around Rs 700 and rise gradually to touch Rs 740.”

According to him, investors who are bullish on RIL and want to take a leveraged bet on the stock as well as existing investors who are in need of liquidity (by switching from main shares to partly paid shares), are likely to be buyers of partly paid shares post listing.

The rights issue which has helped the conglomerate raise Rs 53,124 crore comes amid a series of deals that RIL has conducted with Facebook, Silver Lake, Vista, General Atlantic and KKR, among others, for Jio Platforms, its telecom arm. This was done to make RIL net debt-free by March 2021.

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