Oil-telecom-to-retail conglomerate Reliance Industries launched biggest ever rights issue of Rs 53,125 crore on May 20 with price at Rs 1,257 per rights share.
The rights issue is a part of the company's capital raising programme totaling over Rs 1.04 lakh crore which will be completed by Q1 of the current financial year (2020-21). The programme also included investment by Facebook in Jio Platforms (already garnered Rs 43,574 crore) and the previous investment by British Petroleum in FY19-20.
The company offered 42,26,26,894 equity shares through its rights issue and the record date to become eligible for rights issue was May 14.
The right entitlement ratio has been fixed as one right equity share for every 15 shares held by existing shareholders.
Eligible equity shareholders can check the details of their rights entitlement shares from the website of the Registrar (https://rights.kfintech.com) by entering their DP ID and Client ID or Folio Number (in case of eligible equity shareholders holding equity shares in physical form) and PAN.
The trading in Rights Entitlement shares takes place during usual market hours. The trading is allowed only on delivery (T+2) of right entitlement, which means you can not trade those shares unless and until you get right of entitlement for said shares in your account. Intraday trading is not allowed.
Now investors who are eligible for rights issue can either apply for rights equity shares to the extent of its Rights Entitlement in full or part, also either renounce full or part, or further they can apply for rights equity shares to the full extent of Rights Entitlement as well as apply for additional Rights Equity Shares. Accordingly they have to pay their first installment of rights issue.
In case of Off Market Renunciation, investors can renounce the Rights Entitlements, credited to their respective demat accounts by way of an off-market transfer through a depository participant. The Rights Entitlements can be transferred in dematerialised form only. Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.
All applications should be through online process - Applications Supported by Blocked Amount (ASBA) or web based application platform R-WAP facility (accessible at https://rights.kfintech.com). But if someone makes application through plain paper then he/she will not be entitled to renounce their Rights Entitlements.
The last day for trading in right entitlement or renunciation of rights shares will be May 29 as it will be easier for company to find eligible shareholders by June 2 (T+2). Eligible shareholders will have to pay the first installment amount of Rs 314.25 per rights share, which constitutes 25 percent of the issue price, by June 3.
Investors have to make payment only using their own bank account and not third party bank account. There won't be cheque or cash payment for the same.
Physical share certificates will not be issued to successful allottees in rights issue as the credit of Rights Entitlements and allotment of Rights Equity shares will be made in dematerialised form only. Eligible equity shareholder has to give his/her demat account details within six-month period from allotment date to get Rights Equity shares.
If eligible equity shareholders are holding equity shares in physical form as on record date, and have not provided the details of their demat accounts to the company or to the registrar, they are required to provide their demat account details to the company or the registrar by June 1 to enable the credit of the rights entitlements by way of transfer from the demat suspense escrow account to their respective demat accounts, at least one day before the issue closing date.
The confirmation of application and allotment by the company will be intimated to investors through emails only.
The finalisation of basis of allotment and the date of allotment of partly paid rights shares will be June 10 and same shares will be credited by June 11. The trading in those partly paid rights shares or the listing of said shares will take place on June 12.
Another 25 percent i.e. Rs 314.25 per share will be paid by the investor in May 2021 and the balance 50 percent i.e. Rs 628.50 per share will be paid in November 2021 on-call by the company at the relevant time.
On payment of the final call (which will be in November 2021), the partly paid-up rights equity shares would be converted into fully paid-up equity shares and will be merged with existing fully paid-up equity shares of Reliance Industries.
Investors, who have rights issue shares, are entitled to dividend in proportion to the amount paid up. Their voting rights exercisable on a poll will also be proportional to their respective share of the paid-up equity capital of the company.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.