RIL Capital, RCV merger at a swap ratio of 5:100

RCL informed the BSE that the share exchange ratio is based on the number of shares of the company held by RCVL.

In a major move to reward shareholders of Reliance group, Anil Ambani-controlled Reliance Capital Ltd on Monday approved the merger of Reliance Capital Ventures Ltd (RCVL) with itself for which the share swap ratio has been fixed at 5:100.

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The board of directors have approved the scheme of amalgamation, which entails a share exchange ratio of 5 share of Reliance Capital for every 100 share of Reliance Capital Ventures following the demerger scheme announced by Reliance group.

RCL informed the Bombay Stock Exchange that the share exchange ratio is based on the number of shares of the company held by RCVL, as it was valued by global management consultancy firm KPMG.

The shares of the company held by RCVL will be cancelled under the proposed scheme of amalgamation.

The fully diluted equity capital of the company will remain at approximately Rs 245 crore, it said.

The proposed scheme comes as a bonanza for 23 lakh shareholders of Reliance Industries, who will be entitled to free shares of four Anil Ambani group companies. This will lead to enhancement of their value, elimination of dual listing of the company and RCVL.

The other benefit of the merger include elimination of potential "holding company" discount through RCVL market price, increased liquidity for all the company's shareholders and wider domestic and international shareholder base for the company, it said.

Reliance Capital's shares closed at Rs 441.45 on Monday, on the Bombay Stock Exchange.