Reliance to raise Rs 53,125 cr via 1:15 rights issue at Rs 1,257 per share

Billionaire Mukesh Ambani's Reliance Industries Ltd (RIL) on Thursday announced fund raising of Rs 53,125 crore by way of a 1:15 rights issue, the first such issue in nearly three decades, as it steps up efforts to pare debt.

One share will be offered for every 15 shares held at Rs 1,257, a 14 per cent discount to the closing price for April 30.

In its earnings statement for fourth quarter, RIL said this would be India's biggest rights issue.

The move comes within days of RIL agreeing to sell a 9.99 per cent stake in its digital platform to Facebook Inc for USD 5.7 billion or Rs 43,574 crore.

Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL 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.

RIL said its board also approved a dividend of Rs 6.50 per equity share for the financial year ended March 31, 2020.

It "approved the 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," it said. "The proposed Rights Issuance will be the first by RIL in three decades. The issue will be structured as partly paid shares and will enable shareholders to phase out the outlay on their investment over a period of time."