RIL gains after rights issue subscribed 1.59 times

Reliance Industries (RIL) rose 1.98% to Rs 1573.05 after the company's rights issues valued at Rs 53,124.20 crore received subscription of nearly 1.59 times, cumulating to an overall investment of over Rs 84,000 crore.

The public portion of the rights issue was subscribed 1.22 times, RIL said in an exchange filing made after market hours yesterday (03 June 2020).

The allotment of equity shares will happen on or about 10 June 2020. The rights shares are expected to be listed on the BSE and NSE on or around 12 June 2020 under separate ISIN (International Securities Identification Number).

The Rights Entitlement (RE) was actively traded reflecting broad-based interest in the Rights Issue. This is the first instance of RE's being traded in demat form on the stock exchanges since SEBI introduced this platform and it was a resounding success.

The price of de-materialised trading of RIL-RE, which was listed on 20 May 2020 at Rs 158, ended at Rs 223 on 29 May 2020, with a jump of nearly 41%.

Commenting on the success of the Rights Issue, Mukesh Ambani, chairman and managing director of Reliance Industries, said, I express my sincere thanks to our dear and esteemed shareholders for participating in this Rights Issue and making it a new and proud landmark in the history of India's capital market.

The proceeds from the rights issue will help RIL to slash its net debt to zero this year.

Mukesh Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, the company has been seeking strategic partnerships across its businesses while targeting to deleverage the balance sheet.

At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore.

As part of its balance sheet deleveraging plans, RIL has sold some stake in its digital unit, Jio Platforms to likes of Facebook, Silver Lake, Vista, General Atlantic and KKR aggregating to Rs 78,562 crore.

On a consolidated basis, RIL's net profit fell 38.74% to Rs 6,348 crore on 2.5% decline in revenue to Rs 151,209 crore in Q4 March 2020 over Q4 March 2019.

Reliance Industries is India's largest private sector company. RIL's activities span hydrocarbon exploration and production, petroleum refining and marketing, telecom and digital services.

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