RIL-RE continues to draw strong demand on day 3

The de-materialised trading of Reliance Industries Ltd - Rights Entitlement (RIL-RE) continued to draw strong demand on day three on stock exchanges, with average premium rising by over 19 per cent on Friday.

While oil-to-telecom behemoth Reliance Industries' Rs 53,125 crore mega rights issue opened for subscription by shareholders on Wednesday, it became the first issue where eligible shareholders got the rights entitlements (REs) in demat, which could be traded on stock exchanges.

RIL-REs on an average commanded a premium of Rs 33.45 on Friday, 19.2 per cent higher than Rs 28.07 on Thursday and 138.9 per cent from Rs 14 on Wednesday - over their intrinsic value.

The volume-weighted average price (VWAP) of RIL-REs improved to Rs 218.76 on Friday from Rs 215.07 of Thursday, and Rs 184 of Wednesday, according to data from NSE.

RE's intrinsic value is the difference between RIL share price and the Rights Issue price of Rs 1,257. At RIL's VWAP of Rs 1,442.3, the RE's intrinsic value stood at Rs 185.3 on Friday (Difference between Rs 1,442.3 and Rights Issue price of Rs 1,257).

Over Rs 1,000 crore of RIL-REs traded on stock exchanges in the first three days of listing, notwithstanding the fact that it is listed in Trade-to-Trade segment and buyers must take delivery of the REs.

No intra-day trade allowed.

Over 5 crore RIL-REs were traded on stock exchanges in the first three days of listing.

This is more than 10 per cent of the total REs issued (42.26 crore).

The price of RIL-RE soared from Rs 158.05 at debut on Wednesday to Rs 215.20 at close on Friday, a gain of Rs 57.15 (36.2 per cent) in three days.

Current market value of all RIL-REs exceed Rs 9,200 crore.

In the rights issue, the company will offer one share for every 15 shares held at Rs 1,257 per share.

This will be the first issue where the rights entitlements will be credited to eligible shareholders' demat accounts and will be freely tradable.