Reliance Industries- Rights Entitlement (RE) surged in trade for the second straight day by 9%, after a stellar rally of 40% on the first day of trade of the rights entitlement.
This is the first instance in India when rights entitlement shares are allowed to be traded after the market regulator SEBI came up with the concept in January.
For RIL-RE, rights entitlement share price is Rs. 151.90. The Rights Entitlement (RE) share price is a difference between the previous closing price of Reliance Industries at Rs 1,408.9 and the rights issue price of Rs 1,257 per share
These RIL-RE shares will continue to be traded until May 29 on the stock exchanges in Trade 2 Trade segment (T2T) on NSE under the code RIL RE and BSE as RelianceLR.
In a general case, REs trade at a discount to the intrinsic value. But RIL-REs trade at a premium due to massive interest from hedge funds and special situation funds.
For claiming the rights issue shares, investor needs to buy RIL-RE shares on or before May 29, and pay the upfront 25% price of Rs. 314.25.