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On Thursday, shares of Reliance Industries Limited (RIL) fell over 1 percent in early minutes of the trade before making a V-shaped recovery. The stock touched a low of Rs 1,463.30 during the day.
The conglomerate had set 14 May as the record date for the proposed Rights Issue of 42,26,26,894 equity shares of the face value of Rs 10 each.
It had announced its plans to raise up to Rs 53,125 crore through a rights issue on 30 April. The issue was priced at Rs 1,257 per share with a share ratio of 1:15, implying one right equity share for every 15 fully paid-up equity shares held by the eligible equity shareholders of the company on the record date.
Shares under rights issue are issued at a price lower than the market rate. As a rights issue leads to the creation of new shares that are offered to existing shareholders (at discounted rates) it dilutes the value of the previously held shares.
It is the RIL's biggest ever rights issue and is expected to be part of its plans to become a zero-debt company by the end of the current financial year. It is a credit positive for the company whose earnings may fall for the current quarter due to the unprecedented effects of COVID-19.
Jio Platforms recently raised Rs 60,596 crore from US investors- Facebook, Silver Lake and Vista Equity Partners, making the future prospects of the company attract for those who participate in the rights issue.
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