Reliance mega rights issue oversubscribed 1.1 times
The Mukesh Ambani-led Reliance Industries has received a resounding response to its Rs 53,124 crore RIL rights issue. The country's largest-ever fundraising initiative got oversubscribed 1.1 times on June 1, 2020, with two more days to go. As per the issue subscription data on stock exchanges at 5 pm on June 1, the total bids received for RIL's Rights shares stood at 46.04 crores overshooting the 42.26 crore shares on offer by 8.9 percent. The oversubscription figure clearly indicates that shareholders are applying for many more shares than their entitlements.
BSE has received applications for 44.85 crore rights shares, while NSE got applications for 0.57 crore. The non-ASBA bid quantity stood at 0.62 crore rights shares (received at Registrar through R-WAP).
Not to forget, the RIL rights issue still has two more days to go. In such issues with assured allotment, as is well observed, that the institutional investors invest only in the last few days. This would also mean that the final subscription number will soar even higher.
Billionaire Mukesh Ambani and promoter group had pledged to subscribe to the full extent of their rights entitlements and any unsubscribed portion of the issue. RIL enjoys the support of a very large number of shareholders -- over 25.4 lakh retail shareholders, over 1,700 institutional investors -- domestic as well as foreign.
The strong subscription numbers are a testimony showing the high level of confidence shareholders have in the company's future and the promoters' commitment even as the country has a humongous task at hand in the face of COVID-19 crisis.
When compared, the oversubscription numbers of RIL Rights issue was found to be better than others. Bharti Airtel and Vodafone Idea's Rights Issues in April-May 2019 were oversubscribed by 5%-8%. Each one was less than half the size of RIL's rights issue.
A LOOK AT KEY NUMBERS
| Total Shares (Cr nos) | |
| RIL's Equity Capital | 633.93 |
| Rights Issue size | 42.26 |
RIL's first Rights Issue in three decades is set to close on June 03, 2020. The company has come out with a Rights Issue in a 1:15 ratio to enable participation of all shareholders in its growth consumer/technology businesses where new strategic investors have started joining.
| As on 31-Mar-20 | RIL Shareholding (%) | |
| Promoters | 48.9 | |
|
Public |
Institutional | 37.2 |
| Non-institutional | 11.6 | |
| Custodian (DRs) | 2.4 | |
| Total | 100.0 | |
| Source: BSE | ||
To keep the issue investor-friendly, the Rights Issue price of Rs 1257 is to be paid over 18 months in three installments -- 25% on application by June 03, 2020, 25% in May 2021 and 50% in November 2021.
| Break-up of Non-Institutional Shareholders (As on 31-Mar-20) | No of Shares (Cr Nos) | %age of total |
| Individuals | 55.5 | 8.8 |
| Bodies Corporate | 5.8 | 0.9 |
| Non-Resident Indian (NRI) | 3.3 | 0.5 |
| Trusts / HUFs | 4.0 | 0.6 |
| Clearing Members / Unclaimed / IEPF | 4.8 | 0.8 |
| Total | 73.5 | 11.6 |
| Source: BSE | ||
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