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Reliance Industries Plans Its First Rights Issue in about 30 Years

Posted by B2B on April 29th, 2020

Reliance Industries Ltd. plans to sell shares to existing investors in a rights issue for the first time in about 30 years

Reliance Industries Plans Its First Rights Issue in about 30 Years

Reliance Industries Ltd, India's largest company by market value, plans to sell shares to existing investors for the first time in 30 years, as the Energy to Technology conglomerate is stepping up efforts to reduce debt.

In a statement on Monday evening, the Board of the Mumbai-based company will consider the rights issue on April 30, when it will announce its profits for the quarter ended March 31. The Shares fell 1.8% as of 11:49 am in Mumbai time.

The proposal would be the third fund raising announced by Reliance Industries in recent weeks, underscoring chairman Mukesh Ambani's confidence despite the pandemic that has hit the oil industry. Reliance has unveiled a $ 5.7 billion investment by Facebook Inc. In its digital platform last week, in early April said it would raise up to 250 billion rupees ($ 3.3 billion) through non-convertible debentures.

"After the Facebook deal, the company still needs to raise about Rs.1.1 trillion rupees," said Sudeep Anand, head of institutional research at IDBI Capital Market Services Ltd.: "This is another step to become a net debt-free company."

Mukesh Ambani said in August that the group had a net debt of about USbil as of March 2019 and informed shareholders that it would cut that to zero in early 2021.

A key part of that strategy has hit a hurdle. The proposal to sell a USbil stake in the Reliance Industries  refining and chemicals unit to Saudi Arabian Oil Company is still pending due to lower crude oil prices.

Reliance shares have dropped about 7.2% this year, compared with 23% slide in the  benchmark  S&P BSE Sensex index.

The sale of shares of existing shareholders by Reliance Industries will be the company’s first fund raising from the public in 29 years.

Read Full Article : https://business2business.co.in/article/2225/reliance-industries-plans-its-first-rights-issue-in-about-30-years

                                                                                                                                                                                                                                                  

Also See: Reliance Industries, 30 Years, Rights Issue, Industries Plans, Reliance, Industries, Years

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