RIL gains after setting 14 May as record date for rights issue

Reliance Industries (RIL) jumped 2.22% to Rs 1596.55 after the company set 14 May 2020 as a record date for the proposed rights issue of shares.

With the record date being set to 14 May, investors still have until Thursday (14 May) to buy RIL shares to have the right to subscribe to new shares for a discount of 20%, based on the closing price as on May 8.

RIL's board approved issuance of equity shares of Rs 10 each of the company of an issue size of Rs 53,125 crore by way of rights issue to eligible equity shareholders of the company as on the record date. The price for the rights issue has been determined at Rs 1,257 per share and the share ratio at 1:15. The promoters have confirmed that in addition to subscribing to their aggregate entitlement in full, they will also subscribe to all the unsubscribed portion.

Last week a foreign brokerage reportedly maintained 'buy' rating on the RIL stock with a target of Rs 1,770 per share.

RIL and Jio Platforms announced on 4 May that Silver Lake will invest Rs 5,655.75 crore into Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of the Facebook investment announced on 22 April 2020.

RIL, Jio Platforms and Facebook Inc. on 22 April 2020 announced the signing of binding agreements for an investment of Rs 43,574 crore by Facebook into Jio Platforms. This investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value. Facebook's investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis.

Shares of RIL have soared 30.95% in last one month as compared to 2.93% rise in benchmark BSE Sensex.

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

On a consolidated basis, Reliance Industries (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.

On the technical front, the stock's RSI (relative strength index) stood at 76.072. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

The stock trades above its 50 and 100-day moving average (DMA) placed at 1240.24 and 1374.28 respectively.

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