Public Sector Undertaking, Life Insurance Corporation (LIC) is likely to make an investment of Rs 2,500 crore to up to Rs 3,000 crore in Mukesh Ambani led Reliance Industries Limited (RIL) – Rights Issue Subscription Sale. According to livemint, the information was confidential and disclosed by two people from LIC aware of the matter, on condition of anonymity. One of them said, “LIC plans to subscribe to more than 20 million or more shares of RIL in the rights issue. The proposal has been discussed internally and sent to LIC’s board for approval”. The person added that LIC is convinced that an investment in Reliance Industries Limited is likely to fetch an above-average return for all public investors, including LIC, in the medium to long term, as more than half a dozen large global investors have recently shown strong investment sentiments towards RIL’s businesses, especially in its digital and Telecom business – Jio Platforms Ltd.
The other person said, “LIC is likely to get the approval of its board for the rights issue investment latest by Monday. LIC has to keep the interest of policyholders as the foremost priority. It has been a long-term investor in RIL and it has benefited thousands of policyholders so far. RIL is no longer just an oil-and-gas company. It has shown tremendous strength in the digital payment and retail space”.
RIL has opened the subscription of its massive Rs 53,125 crore worth of Rights Issue on May 20 in a bid to deleverage companies balance sheet to net zero. And till now, it has attracted several big investors. Recently, globally leading companies like Facebook Inc. and global investors like KKR & Co. Inc., Silver Lake, General Atlantic and Vista Equity Partners have made a compiling investment of more than $10 billion in Reliance’s Jio Share. Investors’ high sentiment in RIL Rights Issue and RIL Parent and Subsidiary Shares have formed a good perception among domestic investors and LIC investment can significantly bolster this sentiment and make them invest in ongoing RIL Rights Issue Sale.
Currently, LIC owns 6.01 per cent stake or 3,71,805,415 Shares in total 49.03 per cent Public Stake in RIL Shares. If the decision of LIC to invest Rs 2,500 crore to 3,000 crores in RIL Rights Share is finalised and approved, it will become its largest investment in Rights Issue of a company so far.