Reliance Industries' Rights Issue Subscribed 1.59 Times

The success of the rights issue also comes at a time of increasing uncertainty for most businesses in India who have been hurt by the Coronavirus outbreak-enforced lockdown.
Reliance Industries' Rights Issue Subscribed 1.59 Times
Image credit: Reliance

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Reliance Industries’ rights issue of INR 53,124 crore saw a closure on Wednesday with an overwhelming response from investors who subscribed it 1.59 times.

According to a statement released by the company, the overall commitment would amount to over INR 84,000 crore. The allotment of equity shares will happen on June 10, the company said. The rights shares are expected to be listed on the Bombay Stock Exchange and the National Stock Exchange on June 12 under separate international securities identification numbers.

The public portion of the rights issue was subscribed 1.22 times.

“Our vision is always rooted in furthering India’s inclusive and accelerated growth, propelled by the adoption of digital technologies, that helps improve the lives of 1.3 billion Indians. The tremendous vote of confidence in the Rights Issue convinces us that our shareholders endorse this vision and mission,” said Mukesh Ambani, chairman and managing director of Reliance Industries.

The success of the rights issue also comes at a time of increasing uncertainty for most businesses in India who have been hurt by the Coronavirus outbreak-enforced lockdown. While severe relaxations have been announced, the growing number of COVID-19 cases has meant things remain far from normal.

But all the gloom and doom hasn’t quite stopped the Mukesh Ambani-led conglomerate from making giant strides towards achieving its goal to be a net debt free company.

From Facebook’s deal to buy a 9.9 per cent stake in Jio Platforms - a unit of Reliance Industries that owns the widely popular telecommunications operator Jio and other digital businesses of the company - to KKR picking a 2.32 per cent stake, the Mumbai-headquartered company managed to attract investments worth INR 78,562 crore in just about a month’s time.

Apart from Facebook and KKR, Silver Lake, Vista, and General Atlantic are the other investors who have recently invested in Jio Platforms.

As per a Bloomberg report, three of the largest middle eastern sovereign wealth funds are in advanced talks to invest in Jio Platforms as well.

“The success of RIL’s Rights Issue, seen in the context of the prolonged nationwide lockdown necessitated by the COVID-19 pandemic, is also a vote of confidence, by both domestic investors, foreign investors and small retail shareholders, in the intrinsic strength of the Indian economy,” Ambani said, adding that he had no doubt that the Indian economy will bounce back to follow a high-growth trajectory in the time to come.

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