RIL appoints nine i-banks for $7 billion rights issue

As part of the proposed rights issue, shareholders of Reliance will be offered one new share for every 15 held at Rs 1,257 apiece. It’s the first right issue by India’s most valuable firm in three decades.

Reliance Industries Ltd (RIL) has appointed nine investment banks for its planned Rs 53,215 crore ($7 billion) rights issue, said three people aware of the development.

The rights issue is part of RIL’s plans to become a zero-debt company by the end of March 2021. (Reuters File Photo)

The banks appointed to manage India’s largest such share sale include foreign banks Citigroup and Morgan Stanley and domestic bankers Kotak Mahindra Capital, JM Financial Ltd, Axis Capital and ICICI Securities, the people cited above said on condition of anonymity.

As part of the proposed rights issue, shareholders of Reliance will be offered one new share for every 15 held at Rs 1,257 apiece. It’s the first right issue by India’s most valuable firm in three decades. The issue will be structured as partly paid shares and will enable shareholders to phase out the outlay on their investment over a period of time.

Shareholders willing to subscribe to the issue will have to pay 25% on application and the rest in one or more tranches.

“The rights issue of RIL will be done under the fast track route, which allows companies that meet certain criteria set by Sebi to raise funds quickly with fewer compliances to worry about,” said one of the people cited above.

RIL could file the rights issue offer document as early as in the next two weeks, he added. “The final launch timelines of the deal are yet to be firmed up but it could happen within the next one to two months,” he said.

At 50% shareholding, Mukesh Ambani, Asia’s richest man, will have to pump in at least Rs 26,600 crore to subscribe to his portion of the rights issue. Ambani and other controlling shareholders have pledged to buy the full extent of their entitlement and also subscribe to all unsold shares in the rights issue.

The rights issue is part of RIL’s plans to become a zero-debt company by the end of March 2021. Reliance’s net debt stood at Rs 1.53 trillion as of December 31.

An email sent to RIL remained unanswered.