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Reliance Industries rights issue opens: RIL shares at discount, get at only one-fourth the price

Reliance Industries rights issue opens:

RIL shares at discount, get at only one-fourth the price


The rights issue, biggest ever to enter the Indian equity markets, will remain open for eligible investors for 14 days and is expected to see positive response despite the troubled times that stock markets have seen in the past couple of months.

(RIL) share price zoomed 2% on the initial hour of trade as the Rs 53,124 crore rights issue of the Mukesh Ambani-led company opened on Wednesday morning. The rights issue, biggest ever to enter the Indian equity markets, will remain open for eligible investors for 14 days and is expected to see positive response despite the troubled times that stock markets have seen in the past couple of months. RIL, India’s most valuable company, is looking to cut its net-debt to zero by the end of this fiscal year and is looking to aid that with the rights issue and the consecutive deals that it has signed with global investors for its telecommunications arm, Jio Platforms. Here’s all you need to know about the rights issue.
Eligibility and Price: To be able to subscribe to the rights issue, you must have had at least 15 shares on the record date which was set as May 14. According to RIL’s Board, the shares will be offered at 1:15 ratio, so having at least 15 shares is what makes you eligible for subscribing to the rights issue. The shares are being offered at Rs 1,257 per share, translating to a 12% discount from the current market price.
Payment structure: Interestingly, investors looking to subscribe to the issue will not be asked to pay the entire amount in one go, which would have been a difficult task at this juncture. RIL has asked investors to pay only 25% at the time of subscription. Of the remaining 75%, investors have been asked to pay 25% in May 2021 and the other 50% in November next year. As a promoter and 50 percent shareholder, Mukesh Ambani will have to pump in 26,600 crores for his portion of the rights issue
How to apply: Investors need to consult their bank if they have the option, you can apply through them. Otherwise, investors can apply through an ASBA (Applications Supported by Blocked Amount). Other options include applying through a courier of the Composite Application Form (CAF) from RTA (Registrar and Transfer Agent) of the company.

My opinion: Investors must go for this for a Horizon of two years at least

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