The offering was the first to test the rights entitlement (RE) trading platform, which allowed eligible shareholders to sell their entitlements for a price. The 7-day trading window saw 114 million RIL REs get traded, with total volume of over Rs 2,200 crore, amid interest from global investment firms like Société Générale.
Further, RIL is the first major company to conduct its rights issue in multiple tranches. Initially, applicants have to pay Rs 314.25 per share. They will be issued partly paid-up shares with face value of Rs 2.5 each, which will be traded separately.
A further Rs 314.25 per share will be paid in May next year and the remaining Rs 628.5 in November 2021. The cumulative size of Rs 53,125 crore will make the offering the biggest-ever in the domestic market.
After the rights issue allotment takes place, RIL’s partly paid-up shares will be traded separately on stock exchanges.
At the end of March 2020, net debt stood at Rs 1.61 trillion. The firm has lined up a slew of divestments to pare the same. It includes a $15-billion stake sale in its oil-to-chemical business to Saudi Aramco; a Rs 7,000-crore stake sale in the fuel retailing business to BP; and Rs 1.07-billion investment in Jio Platforms — most have been confirmed. It also plans to generate over Rs 50,000 crore in cash from operations between April and December. “RIL has successfully managed to position itself as a zero-debt tech company in an environment of the virtual economy taking precedence over real. This has the added advantage of taking attention away from a weaker near-term refining outlook,” said Edelweiss analyst Jal Irani in a note last week.
“The success of the rights issue is a vote of confidence by both domestic and foreign investors, as well as small retail shareholders, in the intrinsic strength of the Indian economy,” said Mukesh Ambani, CMD of RIL.