Mukesh Ambani led Reliance Industries Limited (RIL) has opened selling subscriptions for Rights Issue for its share from May 20 to June 3 to raise funds. Rights Issue for a total of 53,125 crore Shares will be sold through the Subscription. Reliance will issue 42,26,26,894 equity shares of the face value of Rs.10 for each of these shares.
Shareholders can buy the subscriptions offered for 25 per cent and need to pay the balance in two instalments one in May of Rs.314.25 and other in November of Rs. 628.50 next year.
For every 15 shares of Rs.1,257 each, one RIL share will be offered to the existing RIL shareholder at a 14 percent discount on a value equal to the closing price on April 30 of shares.
Shareholders are allowed for market renunciation till May 12. RIL is anticipating to raise funds worth Rs.53,036.13 crore from selling Rights Issue.
The money raised through this instrument will be used by RIL to deleverage companies balance sheets which Mukesh Ambani wants to bring at net zero debt. From the anticipated fund of Rs. 53,036, Rs.39,755.08 is decided to be used for paying the liabilities including commercial papers and non-convertible debentures. The rest amount would be used for general corporate purposes.
The company has currently an outstanding debt of Rs. 3,36,294, while it’s net debt is 1,61,035 as it currently has a liquidity amount of Rs. 1,75,259.
The last time, RIL proceeded to raise funds for the company was almost 30 years back. When in 1991, it issued its convertible debentures for sale which subsequently got converted into equity shares of Rs.55 each.