On the opening day of selling of RIL-RE or Reliance Industries Limited Rights Entitlement Shares, its price surged to 40 per cent owing to strong interest and demand from investors. As Shares are of India’s most revered company Reliance, Investors have a good perception of these shares’ long term benefit. Another factor that is attracting so many investors was the staggered payment terms by RIL on these shares, making it easier for them to invest.
The closing price of RIL-RE on Wednesday was Rs.212 which is Rs.32 more than the spread between RIL share price of Rs.1,437.40 and the Rights Issue Share price of Rs.1,257. That makes the intrinsic value of the Rights Issue at Rs.180. To raise funds for deleveraging Balance Sheets, Rights Issue was opened for subscription on Wednesday by RIL and about 32 million shares got subscribed from the offered 422.6 million.
Top Sellers of RIL-RE were Global Depository Receipts (GDR) and Exchange Traded Funds (ETF) and top buyers were Global Long- only Funds. Though the price of Rights Issue Share on Wednesday was Rs.1,469, investors will now only have to pay Rs.526.25 which can give long term benefits to them. Investors buying subscription of RIL-RE shares on 29 May will have access to Rights Issue Shares of RIL. Trade of these shares cannot be done on an intraday basis and investors will require to trade these shares on the trade-on-trade basis only. And, transactions to be done via off-market transfer through a depository participant.
Though the eligibility required to buy the Share of Rights Issue is having a minimum of 15 shareholdings of a fixed value price each of these RIL shares, if there will be availability of shares then the shareholders with less than 15 shares will be allowed to apply for One Rights Issue Share.