RIL to mull rights issue on April 30, shares fall 2%

Reliance Industries will consider a rights issue of shares on April 30 to raise funds from the public after almost three decades, the Mukesh Ambani-led company informed bourses late Monday.

RIL said that the board of the company will meet on Thursday to consider its financial result for 2019-20, dividend and the rights issue. The company did not disclose the amount that the rights issue will raise or what it would be used for.

Reacting to the news, shares of RIL declined 2% to Rs 1401.95 on the BSE. BSE’s benchmark Sensex was in the green, marginally up at 0.8% at 12:35 pm.


Analysts believe that the likely rights issue reinforces the company’s commitment to become a net debt to zero by March 2021.

"It reflects the promoter's unflinching faith in the medium to long term prospects of various businesses. With consumer focusing businesses like digital telecom and retail achieving global scale, with global behemoths vying with each other to partner RIL; this is an apt opportunity for current shareholders to participate in the likely value unlocking of various businesses over the next couple of years,” said Ajay Bodke, chief executive officer (PMS), Prabhudas Lilladher.

Rights issue of shares allows existing shareholders to buy additional shares in the company at a discount to the current market price to raise capital.