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As the deadline for the submission of binding bids approaches, the bidders of <keyword id="6360090" type="General" weightage="100" keywordseo="reliance-capital" source="Orion">Reliance Capital</keyword>, including Hinduja, Torrent, Zurich, and Piramal have flagged off various legal issues to the lenders and Administrator, involving Reliance Capital and its subsidiaries. These legal issues involve a cumulative liability of Rs 22,000 crore, and they need quick resolution for the successful closure of RCAP's resolution plan. According to sources, the bidders are likely to make a condition precedent of these issues to any payment to the lenders. The two big issues flagged off by the bidders are the impending resolution of <keyword id="3649632" type="General" weightage="50" keywordseo="reliance-home-finance-ltd" source="Orion">Reliance Home Finance Ltd</keyword> (<keyword id="1590678" type="General" weightage="50" keywordseo="rhfl" source="Orion">RHFL</keyword>) and the legal battle between the Administrator and IDBI Trusteeship for the control of <keyword id="157626" type="General" weightage="50" keywordseo="reliance-general-insurance" source="Orion">Reliance General Insurance</keyword>'s shares, which is pending in the NCLT. Authum Investment and Infrastructure Ltd had been selected as the successful bidder for RHFL in June 2021, but the resolution process has not yet been completed due to various litigation involving the debenture holders. The total debt of RHFL is Rs 11,500 crore. As far as Reliance General Insurance is concerned, the Independent actuarial <keyword id="5413795" type="General" weightage="50" keywordseo="tower-watson" source="Orion">Tower Watson</keyword> has valued this business at Rs 9,500 crore. Apart from these, the two other legal cases flagged off by the bidders are Axis Bank's claim of Rs 150 crore against Reliance Capital, which the bank has lost in the NCLT, and a case involving Administrator and IndusInd Bank, involving arbitration of Nippon Asset Management shares. The total liability in this matter is Rs 650 crore. The last date for submitting binding bids is November 28. The quick resolution of these legal matters is a challenge for the Administrator for the successful closure of the RCAP resolution plan. Reliance Capital had received 14 non-binding bids for its multiple businesses. Six companies had submitted bids for the entire company, while the rest of the bidders had submitted bids for its multiple subsidiaries. Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment, and B Right Real Estate have submitted bids in the range of Rs 4,000 crore to Rs 4,500 crore for Reliance Capital's entire assets. For Reliance General Insurance business, Piramal Finance has bid Rs 3,600 crore, while <keyword id="1657992" type="General" weightage="50" keywordseo="zurich-insurance" source="Orion">Zurich Insurance</keyword>'s bid is Rs 3,700 crore. The third bidder, Advent, has bid Rs 7,000 crore for Reliance General Insurance. Jindal Steel and Power and <keyword id="8564251" type="General" weightage="50" keywordseo="uvarc" source="Orion">UVARC</keyword> have submitted bids for Reliance Capital's ARC business. For other assorted assets of Reliance Capital, 3 bidders -- Choice Equity, Global Fincap, and <keyword id="15413642" type="General" weightage="50" keywordseo="grand-bhawan" source="Orion">Grand Bhawan</keyword> -- have submitted the bids. RCAP's life insurance business, <keyword id="15259421" type="General" weightage="50" keywordseo="rnlic" source="Orion">RNLIC</keyword>, had not received any bid, but later on Aditya Birla Capital and Nippon Life Insurance, which is already holding 49 per cent equity in RNLIC, have evinced interest in acquiring RCAP's 51 per cent stake in this business. At the beginning of the resolution process of Reliance Capital over 54 companies had submitted Expression of Interest (EOI) for its various assets, out of which only 14 are now in the fray. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/electric-mobility-platform-moeving-raises-2-5-million-from-jsw-ventures/articleshow/95252790.cms">Electric mobility platform MoEving raises $2.5 million from JSW Ventures</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/tumblr-to-allow-nudity-but-not-sexually-explicit-images/articleshow/95253755.cms">Tumblr to allow nudity but not sexually explicit images</a>

Reliance Capital bidders flag off multiple legal issues involving Rs 20,000 crore liability

<ul><li><keyword id="6355199" type="ORGANIZATION" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword>' ₹53,125 crore rights issue will open for subscription on May 20 and close on June 3.</li><li> One will be offered for every 15 shares held at ₹ 1,257 — a 14% discount as per the closing price on April 30.</li><li>The company claims that the rights issue is not about mitigating its debt, but about rewards shareholders.</li></ul> Oil-to-telecom conglomerate Reliance Industries Ltd on Saturday said its mega Rs 53,125 crore rights issue will open for subscription of shareholders on May 20 and close on June 3. Billionaire <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>'s firm had on April 30 announced fund raising of Rs 53,125 crore by way of a 1:15 rights issue -- India's biggest and the first such issue by the firm in nearly three decades. Reliance had earlier fixed May 14 as the record date for determining shareholders' eligible to apply for the issue. In a regulatory filing, the company said the rights issue committee of the board of directors at its meet on May 15 approved issue opening on May 20 and closing date of June 3. "Abridged letter of offer, application form of rights issue, and rights entitlement letter, to be sent to the eligible equity shareholders of the company," it said. One share will be offered for every 15 shares held at Rs 1,257, a 14 per cent discount to the closing price for April 30. Reliance share price has since risen to Rs 1,458.90 (Friday's closing price) but rights issue price remains the same. The proposed rights issuance will be the first by Reliance in three decades. Typically, cash-strapped companies use rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. But for Reliance, it is not about raising funds as it has significant liquidity with USD 23.4 billion of cash and equivalent. It is being seen as an attempt to reward the shareholders, cut debt at the group and underscore promoters' faith in the Reliance growth story. Promoter Ambani family has under-written the entire rights issue, pledging to buy shares that are unsubscribed. The last time Reliance tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL has been seeking strategic partnerships across its businesses while targeting to deleverage the balance sheet. At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore. As part of its balance sheet deleveraging plans, Reliance has sold minority stake in its digital unit Jio Platforms to likes of Facebook. It is also talking to Saudi Aramco for selling a fifth of its oil-to-chemicals business for an asking of USD 15 billion and has sold half of its fuel retail venture to BP Plc for Rs 7,000 crore and telecommunication tower business to Brookfield for Rs 25,200 crore. Together, proceeds from these transactions will result in reduction in RIL's net debt. SEE ALSO: <a href="https://www.businessinsider.in/careers/news/indian-women-dont-like-being-gig-workers/articleshow/75757460.cms">Indian women don’t like being gig workers ⁠— the potentially $450 billion industry has to woo them with fair pay to start with</a> <a href="https://www.businessinsider.in/entertainment/news/carry-minati-youtube-vs-tiktok-video-removed-for-violating-terms-of-service/articleshow/75749665.cms">Carry Minati's 'YouTube vs TikTok' video removed for violating terms of service — fans claim injustice</a> <a href="https://www.businessinsider.in/policy/economy/ashok-gulati-interview-on-essential-commodities-act-and-apmc-changes/articleshow/75760364.cms">"I have been asking for this for 20 years," says Ashok Gulati, agriculture scientist ⁠— cheering the changes to Essential Commodities Act and APMC</a>

Reliance Industries' ₹53,125 crore right issue will kick off on May 20 — you'll have till June 3 to subscribe

<ul><li>Shares of <keyword id="6355199" type="ORGANIZATION" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> on Monday gained nearly 2 per cent after the company announced the sale of 1.34 per cent stake in its digital unit to global equity firm General Atlantic for Rs 6,598.38 crore.</li><li>On the NSE, shares of the company went advanced 1.54 per cent to ₹1,482. </li><li>Reliance Industries on Sunday announced the sale of 1.34 per cent stake in its digital unit to global equity firm General Atlantic for ₹6,598.38 crore, the fourth deal in less than four weeks that will inject a combined Rs 67,194.75 crore in the oil-to-telecom conglomerate to help it pare debt.</li></ul>Shares of Reliance Industries on Monday gained nearly 2% after the company announced the sale of 1.34% stake in its digital unit to global equity firm General Atlantic for ₹6,598.38 crore. The heavyweight stock rose by 1.58 per cent to ₹1,482 on the BSE in opening session. On the NSE, shares of the company went advanced 1.54 per cent to ₹1,482. However, as the session progressed, the company surrendered the early gains and was quoting 1.07 per cent down at ₹1,443.25 on the BSE in line with weak market sentiment. Reliance Industries on Sunday announced the sale of 1.34 per cent stake in its digital unit to global equity firm General Atlantic for ₹6,598.38 crore, the fourth deal in less than four weeks that will inject a combined Rs 67,194.75 crore in the oil-to-telecom conglomerate to help it pare debt. "This investment values Jio Platforms at an equity value of ₹4.91 lakh crore and an enterprise value of ₹5.16 lakh crore. General Atlantic's investment will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis," the company said in a statement. The deal follows Facebook picking up a 9.99% stake in the firm that houses India's youngest but largest <keyword id="6354776" type="COMPANY" weightage="20" keywordseo="Telecom">telecom</keyword> firm on April 22 for ₹43,574 crore. Within days of that deal, Silver Lake - the world's largest tech investor - bought a 1.15 per cent stake in Jio Platforms for ₹5,665.75 crore. On May 8, US-based Vista Equity Partners bought 2.32 per cent stake in Jio Platforms for Rs 11,367 crore. Meanwhile, Reliance Industries' ₹53,125-crore rights issue will open for subscription of shareholders on May 20 and will close on June 3. Shareholders will have to pay only 25% for subscribing to the issue, and the balance will have to be paid in two installments in May and November next year, the company said.

Reliance Industries shares gain nearly 2% after General Atlantic deal

<ul><li>A rights issue is an invitation to existing shareholders to buy more shares at a discount to the market price. </li><li>RIL's investors can subscribe to the right to own <a href="https://www.businessinsider.in/business/corporates/news/ril-rights-issue-ratio-pricing-and-value/articleshow/75474592.cms" data-type="tilCustomLink" target="_blank">one new share for every 15</a> held in the company at ₹1,257 per share, 14% below Thursday’s (April 30) closing price. </li><li>Even if you expect that RIL shares will be worth a lot more in the future, if the share falls to ₹1,257, or below, investors can buy the shares from the market instead of subscribing to the rights.</li></ul>The rights issue announced by one of India's most valued company, Reliance Industries (RIL), will have to conclude by the end of June, as declared by the company. The company owned by Asia's richest man, <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>, plans to mop up ₹53,125 crore from shareholders. RIL's investors can subscribe to the right to own <a href="https://www.businessinsider.in/business/corporates/news/ril-rights-issue-ratio-pricing-and-value/articleshow/75474592.cms" data-type="tilCustomLink" target="_blank">one new share for every 15</a> held in the company at ₹1,257 per share, 14% below Thursday’s (April 30) closing price. A rights issue is an invitation to existing shareholders to buy more shares at a discount to the market price. <div type="Article" hostid="261" msid="75474592" title="Mukesh Ambani offers Reliance Industries shareholders 1 new share for every 15 held⁠— at a price 14% below market value" mstype="2" mssubtype="0"></div> How does it work? Since there will be more entering the market, the value of your existing shares will go down. That can be made up via additional shares via rights to make up for the fall. If you had 120 shares on Thursday (April 30), you will get rights to 8 new shares. Theoretically, if the value of RIL shares don't change, the value of 128 shares will be the same as the old 120 shares. While it is difficult to estimate the exact value of the total shareholding (after subscribing for rights)— since it can be affected by business and market factors — the theoretical price of each share can be calculated in the following manner. <table style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 444pt; font-family: Merriweather; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"></colgroup><tbody><tr><td class="xl64" style="border-width: 1px; border-style: solid; border-color: rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; height: 15pt; width: 159pt;">Period</td><td class="xl65" style="border-top: 1px solid rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; width: 98pt;">Shares </td><td class="xl65" style="border-top: 1px solid rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; width: 116pt;">Price</td><td class="xl66" style="border-top: 1px solid rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; width: 71pt;">Value</td></tr><tr><td class="xl67" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: 1px solid rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; height: 15pt;">Before rights issue</td><td class="xl63" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">120 (assumed)</td><td class="xl63" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹1464 (April 30 closing)</td><td class="xl68" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹175680</td></tr><tr><td class="xl67" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: 1px solid rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; height: 15pt;">Rights issue</td><td class="xl63" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">8 (1 share for every 15)</td><td class="xl63" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹1257 (set by company)</td><td class="xl68" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹10056</td></tr><tr><td class="xl69" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: 1px solid rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top; height: 15.75pt;">Post rights issue</td><td class="xl70" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">128 (sum)</td><td class="xl70" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹1451.06*</td><td class="xl71" style="border-top: none rgb(221, 221, 221); border-right: 1px solid rgb(221, 221, 221); border-bottom: 1px solid rgb(221, 221, 221); border-left: none rgb(221, 221, 221); padding: 5px; font-size: 16px; vertical-align: top;">₹185736 (sum)</td></tr></tbody></table> The above calculation assumes that <keyword id="4347449" type="PERSON" weightage="20" keywordseo="RIL-share-price">RIL share price</keyword> doesn't change, which will never happen. So, in fact, you might gain or lose money. Should I subscribe to the rights issue? Depends on the price. Even if you expect that RIL shares will be worth a lot more in the future, if the share falls to ₹1,257, or below, investors can buy the shares from the market instead of subscribing to the rights. The gap between the market price of each RIL share tomorrow and ₹1,257 will be the gain from the additional shares that you get from the rights issue. If the share price falls on Monday (May 3) and the closer it gets to ₹1,257, it will make lesser sense for investors to subscribe to the rights because the room for gains will shrink. How does it affect the company? RIL is expected to use the money received from subscriptions to the rights issue to repay debt. So, the lesser it makes, lesser the debtit can repay. <div type="image" title="ril share price (1)." msid="75518412" hostid="261" caption="&amp;lt;p&amp;gt;RIL is expected to use the money received from subscriptions to the rights issue to repay debt. So, the lesser it makes, lesser the debt&amp;lt;strong&amp;gt; &amp;lt;/strong&amp;gt;it can repay.&amp;lt;/p&amp;gt;"></div> What if the share price falls and shareholders don't subscribe to the rights issue? "The promoter and promoter group of the company have confirmed they will subscribe to the full extent of their aggregate rights entitlement. In addition, they will also subscribe to all the unsubscribed shares in the Issue,” Reliance Industries said in a statement. This means, Mukesh Ambani and his family, who own roughly 50% of RIL will subscribe to all the shares they can under the proposed rights issue, which means the promoters will have to cough up about ₹26,500 crore. They will also have to fill in for any shortfall in demand for rights from other shareholders. Lesser the subscription, more money the promoters will have to put in. SEE ALSO: <a href="https://www.businessinsider.in/business/news/reliance-retails-operating-profit-grows-nearly-20-in-the-latest-fourth-quarter/articleshow/75474722.cms">Reliance Retail’s operating profit grows nearly 20% in the latest fourth quarter⁠⁠</a> <a href="https://www.businessinsider.in/stock-market/news/tech-mahindra-shares-are-cheap-despite-the-earnings-disappointment-says-a-research-report/articleshow/75515809.cms" data-type="tilCustomLink" target="_blank">Tech Mahindra shares are cheap despite the earnings disappointment, says a research report</a> <a href="https://www.businessinsider.in/business/news/hul-fourth-quarter-earnings-report-volume-growth-and-share-price-chart/articleshow/75472021.cms">HUL fourth-quarter volume growth down 7%, profit falls 1%, India sales slide 9% ⁠— as COVID-19 strikes India’s largest consumer firm</a>

Here's how Reliance Industries right issue may affect the share price

New Delhi, Apr 28 () Billionaire Mukesh Ambani's Reliance Industries Ltd (RIL) will on Thursday consider a rights issue - the first such issue in nearly three decades - as it steps up efforts to pare debt. The Board of the country's largest company will meet on April 30 to consider and approve audited financial results of the firm for the quarter and year ended March 31 as also to recommend dividend, RIL said in a regulatory filing. It would also "consider a proposal to issue equity shares to existing shareholders on Rights basis, as may be permitted under applicable law, subject to such regulatory/statutory approvals, as may be required," the company said without giving details. The move comes within days of RIL agreeing to sell 9.99 per cent stake in its digital platform to Facebook Inc for USD 5.7 billion or Rs 43,574 crore. Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL has been seeking strategic partnerships across its businesses while targeting to deleverage the balance sheet. At the end of December quarter, RIL had an outstanding debt of Rs 3,06,851 crore. It also had cash in hand of Rs 1,53,719 crore, bringing the net debt position to Rs 1,53,132 crore. Analysts expect dilution of at least 5 per cent through the rights issue. In other words, each shareholder will be entitled to apply for five new shares for every 100 shares held. This will help RIL raise about Rs 40,000 crore, assuming some discount to the current trading price. Typically, cash-strapped companies use rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. The last time RIL tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. As part of its balancesheet deleveraging plans, RIL is talking to Saudi Aramco for selling a fifth of its oil-to-chemicals business for an asking of USD 15 billion and has sold half of its fuel retail venture to BP Plc for Rs 7,000 crore and telecommunication tower business to Brookfield for Rs 25,200 crore. But the crash in oil prices has created uncertainty over the timeline for the completion of the Aramco deal. On August 12, 2019, RIL announced that it has signed a non-binding letter of intent to sell a 20 per cent stake in its oil-to-chemical (O2C) business to Saudi Aramco. The O2C business, which has an enterprise valuation of USD 75 billion, includes RIL's refining and petrochemical divisions, and RIL's 51 per cent stake in its fuel marketing business. The company had sold a 49 per cent stake in its fuel marketing business in India to BP Plc for USD 1 billion. In July 2019, RIL announced the sale of its telecommunications tower business - which was already transferred to the investment infrastructure trust, InvIT, to Brookfield Asset Management Inc for Rs 25,200 crore. Together, proceeds from these transactions will result in a reduction in RIL's net debt. ANZ ANZ ANUANU

Reliance to consider rights issue, dividend on Thursday

<ul><li>The sharp fall in crude oil prices in the first three months of 2020 led to lower realisations across product categories for Reliance Industries.</li><li>The bottomline would have been much worse if not for the consumer-centric businesses like Reliance Jio or Reliance Retail.</li><li>The company's debt reduction plan seems to be on track with a ₹53,000 crore rights issue, following a 9.9% stake sale in Reliance Jio to Facebook</li></ul>India's largest conglomerate by market value, Reliance Industries (RIL) reported a 38.7% drop in fourth-quarter consolidated net profit at ₹6,348 crore on weak energy and petrochemical business while the revenue fell 2.5%, compared to a year earlier. <div type="image" title="ril share price (1)." msid="75475995" hostid="261" caption="&amp;lt;p&amp;gt;RIL share price has gained over 66% value since the low on March 23 as investors. Source: BSE&amp;lt;/p&amp;gt;"></div> The sharp fall in crude oil prices in the first three months of 2020 led to lower realisations across product categories for Reliance Industries, which still derives a big chunk of its revenue from the energy verticals like petrochemicals and refining. "During this period, there has been significant volatility in oil prices, resulting in uncertainty and sharp reduction in oil prices. Through the quarter, oil prices declined 73% impacting inventory valuation. In view of the above, the company has provided for non-cash inventory holding losses for the quarter," the RIL statement said. <div type="Article" hostid="261" msid="75475068" title="Reliance to hive off $75 billion oil-to-chemicals business into separate unit for sale to Aramco" mstype="2" mssubtype="0"></div> The bottomline would have been much worse if not for the consumer-centric businesses like Reliance Jio or Reliance Retail, both of which showed spectacular growth even with the economic slowdown as well as the explosion of the coronavirus crisis towards the end of the quarter. Reliance Jio profits jumped by more than 73% in the fourth quarter, rising to ₹2,331 crore in the last three months. A big chunk of this profit came from the 40% hike in tariffs in December 2019. <div type="Article" hostid="261" msid="75474894" title="After Facebook, Reliance in talks with other investors to offload more stake" mstype="2" mssubtype="0"></div> Reliance Retail has posted an operating profit of ₹2062 crore, <a href="https://www.businessinsider.in/business/news/reliance-retails-operating-profit-grows-nearly-20-in-the-latest-fourth-quarter/articleshow/75474722.cms" data-type="tilCustomLink" target="_blank">up by 19.8% from the same quarter the previous year</a>. The retail arm of Reliance also saw its quarterly revenue jump 4.2% to ₹38,211 crore year-on-year. However, the company still makes over three out of four rupees in revenue from refining and petrochemicals business. The gross refining margin was down 3% in Jan-March 2020, compared to the preceding three months. <div type="image" title="RIL segment growth." msid="75476259" hostid="261" caption="&amp;lt;p&amp;gt;Reliance Industries still makes over three out of four rupees in revenue from refining and petrochemicals business.&amp;lt;/p&amp;gt;"></div> The company's debt reduction plan seems to be on track with a ₹53,000 crore rights issue, following a 9.9% stake sale in Reliance Jio to Facebook, and the continued efforts to sell stake in the oil t0 chemicals (O2C) business to Saudi Arabian refiner Aramco. "In spite of the Covid-19 crisis and the lockdowns, the due-diligence by Saudi Aramco for the planned investment in the O2C business is on track as both the parties are committed and actively engaged," the filing said. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/reliance-jio-profit-jumps-73-due-to-tariff-hikes/articleshow/75475445.cms" data-type="tilCustomLink" target="_blank">40% tariff hike boosts Reliance Jio’s profit by 73% in just three months ⁠— and there’s a lot more coming from the Mukesh Ambani stable</a> <a href="https://www.businessinsider.in/business/corporates/news/ril-rights-issue-ratio-pricing-and-value/articleshow/75474592.cms" data-type="tilCustomLink" target="_blank">Mukesh Ambani offers Reliance Industries shareholders 1 new share for every 15 held⁠— at a price 14% below market value</a>

Crashing crude oil cracks Reliance Industries fourth-quarter profit by nearly 40%

New Delhi, Jun 1 () Reliance Industries' mega Rs 53,124 crore rights issue was on Monday oversubscribed 1.1 times, two days ahead of the issue closing. According to issue subscription data on stock exchanges, total bids received for RIL's rights shares stood at 46.04 crore, overshooting the 42.26 crore shares on offer by 8.9 per cent. BSE has received applications for 44.85 crore rights shares, while NSE got applications for 0.57 crore. The non-ASBA bid quantity stood at 0.62 crore rights shares (received at Registrar through R-WAP). The oversubscription figure indicates that shareholders applied for many more shares than their entitlements. The issue still has two more days to go and it is a well-observed phenomenon that in such issues with assured allotment, institutional investors invest only in the last few days. This means the final over-subscription number will rise to an even higher level. Billionaire Mukesh Ambani and promoter group had pledged to subscribe to the full extent of their rights entitlements and any unsubscribed portion of the issue. RIL has a very large number of shareholders -- over 25.4 lakh retail shareholders, over 1,700 institutional investors -- domestic as well as foreign. The significantly strong subscription numbers show the high level of confidence every category of shareholders has in the company's future and the promoters' commitment to creating value for them even in the times of COVID, sources said. The oversubscription numbers of RIL's rights issue are better than other comparable issues of the recent past. Bharti Airtel and Vodafone Idea's rights issues were oversubscribed by 5-8 pe cent. Each one of them was less than half the size of RIL's rights issue. Earlier, RIL created a whole new trading instrument in the form of REs which had premium valuation, liquidity and interest engaging quality investors. The REs never traded at below intrinsic during the renunciation period, which is a milestone in Indian capital markets. RIL-REs had created a value of about Rs 9,500 crore for the company's shareholders, when the online trading ended on May 29. RIL's first rights issue in three decades is set to close on June 03. In the rights issue, the company is offering one share for every 15 shares held at Rs 1,257. RIL on BSE closed at Rs 1520.45 on Monday. The company, as per the issue offer document, will use three-fourth of the proceeds of its mega rights issue for repayment of some of its borrowings. The company expects net proceeds of Rs 53,036.13 crore from the rights issue after accounting for legal and other expenses. Out of these, Rs 39,755.08 crore would go towards "repayment/ prepayment of all or a portion of certain borrowings availed by company," it said. The remaining Rs 13,281.05 crore would be used for general corporate purposes. Shareholders will have to pay only 25 per cent for subscribing to the company's mega Rs 53,125-crore rights issue, and the balance will have to be paid in two installments in May and November next year, the company said. Of the Rs 1,257 per share price, only 25 per cent is to be paid at the time of subscription. A similar amount will be due for payment in May 2021 and the balance 50 per cent has to be paid in November 2021, the company said. "On Application, investors will have to pay Rs 314.25 per rights equity share, which constitutes 25 per cent of the issue price and the balance Rs 942.75 per rights equity share, which constitutes 75 per cent of the issue price, will have to be paid, on one or more subsequent call(s)," it said. In May 2021, they will have to pay Rs 314.25, and balance Rs 628.50 is to be paid in November 2021. The last time RIL tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL has been seeking strategic partnerships across its businesses, while targeting to deleverage the balance sheet. At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore. As part of its balance sheet deleveraging plans, Reliance has sold a minority stake in its digital unit, Jio Platforms to the likes of Facebook and private equity firms. It is also talking to Saudi Aramco for selling a fifth of its oil-to-chemicals business for an asking of USD 15 billion and has sold half of its fuel retail venture to BP Plc for Rs 7,000 crore and telecommunication tower business to Brookfield for Rs 25,200 crore. Together, proceeds from these transactions will result in a reduction in RIL's net debt. ANZ BAL

Reliance mega rights issue oversubscribed 1.1 times

New Delhi, May 10 () Oil-to-telecom conglomerate Reliance Industries Ltd (RIL) has fixed May 14 as the record date for determining shareholders eligible to apply for India's biggest rights issue of Rs 53,125 crore. Billionaire Mukesh Ambani's firm had on April 30 announced fund raising of Rs 53,125 crore by way of a 1:15 rights issue, the first such issue by RIL in nearly three decades. One share will be offered for every 15 shares held at Rs 1,257, a 14 per cent discount to the closing price for April 30. RIL's share price has since risen to Rs 1,561.80 (Friday's closing price), but rights issue price remains the same. "We inform you that the Rights Issue Committee constituted by the Board of Directors of the company has, at its meeting fixed Thursday, May 14, 2020 as the 'Record Date' for the purpose of determining the equity shareholders entitled to receive the rights entitlement in the rights issue," the firm said in a regulatory filing. The rights issue opening and closing dates will be informed separately, it added. Typically, cash-strapped companies use rights issues to raise money when they really need it. In rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price. The last time RIL tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. ANZ RVK

Reliance fixes May 14 as record date for rights issue

New Delhi, May 19 () Reliance Industries will use three-fourth of proceeds of its mega rights issue for repayment of some of its borrowings, according to offer document. The company expects net proceeds of Rs 53,036.13 crore from the rights issue that opens on May 20 and closes on June 3. Out of these, Rs 39,755.08 crore would go towards "repayment/ prepayment of all or a portion of certain borrowings availed by company," it said. The remaining Rs 13,281.05 crore would be used for general corporate purposes. Shareholders will have to pay only 25 per cent for subscribing to the company's mega Rs 53,125-crore rights issue, and the balance will have to be paid in two installments in May and November next year, the company said. One share will be offered for every 15 shares held at Rs 1,257. Of the Rs 1,257 per share price, only 25 per cent is to be paid at the time of subscription. A similar amount will be due for payment in May 2021 and the balance 50 per cent has to be paid in November 2021, the company said. "On Application, investors will have to pay Rs 314.25 per rights equity share, which constitutes 25 per cent of the issue price and the balance Rs 942.75 per rights equity share which constitutes 75 per cent of the issue price, will have to be paid, on one or more subsequent call(s)," it said. In May 2021, they will have to pay Rs 314.25, and balance Rs 628.50 is to be paid in November 2021. The last date for shareholders wishing to do an on market renunciation is May 29. Out of the net proceeds of Rs 53,036.13 crore, three-fourth will be used to repay/repay either fully or partly the Rs 16,350 crore of commercial papers and Rs 36,213 crore of non-convertible debentures, the offer document said. "Our promoter and promoter group, by way of their letters dated May 15, 2020, have confirmed to subscribe to the full extent of their rights entitlements" and any unsubscribed portion of the issue, the offer document said. Billionaire Mukesh Ambani's firm had on April 30 announced fund raising of Rs 53,125 crore by way of a 1:15 rights issue - India's biggest and first such issue by the firm in nearly three decades. One share will be offered for every 15 shares held at Rs 1,257. Reliance Industries' shares closed at Rs 1,408 on the BSE. The last time RIL tapped the public for funds was in 1991 when it had issued convertible debentures. The debentures were subsequently converted into equity shares at Rs 55 apiece. Ambani had in August last year unveiled plans to cut debt to zero by 2021. As part of this plan, RIL has been seeking strategic partnerships across its businesses, while targeting to deleverage the balance sheet. At the end of March quarter, RIL had an outstanding debt of Rs 3,36,294 crore. It also had cash in hand of Rs 1,75,259 crore, bringing the net debt position to Rs 1,61,035 crore. As part of its balance sheet deleveraging plans, Reliance has sold a minority stake in its digital unit, Jio Platforms to the likes of Facebook. It is also talking to Saudi Aramco for selling a fifth of its oil-to-chemicals business for an asking of USD 15 billion and has sold half of its fuel retail venture to BP Plc for Rs 7,000 crore and telecommunication tower business to Brookfield for Rs 25,200 crore. Together, proceeds from these transactions will result in a reduction in RIL's net debt. ANZ BAL BAL

Reliance to use 3/4th of the rights issue to repay debt

New Delhi, May 4 () Moody's Investors Service on Monday said Reliance Industries' Rs 53,100 crore rights issue is credit positive as earnings will decline because of economic shutdowns.Last week, Reliance announced it will raise Rs 53,100 crore through a rights equity offering.Also, the company announced an investment of Rs 5,656 crore by Silver Late in Jio Platforms, the digital services business of RIL."This is in line with the company's target to reduce its net debt to zero by March 31, 2021. The proceeds from the rights issue will reduce RIL's net debt by about USD 7.8 billion and is credit positive," Moody's said in a note.Along with the previously announced asset sales to Facebook, Inc and BP Plc, RIL expects to generate net proceeds of Rs 1.1 lakh crore, which will reduce its net debt by the same amount."The total net debt reduction from completion of these transactions will lower RIL's reported net debt, which was Rs 1.6 lakh crore (USD 21.4 billion) as on March 31, 2020, by about 68 per cent and will be equivalent to 1.1x its reported EBITDA of Rs 1 lakh crore for the fiscal year ended March 31, 2020," it said.In addition, RIL also announced that it has started the process to carve out its oil-to-chemical (O2C) business as a separate subsidiary in order to facilitate the previously announced 20 per cent stake sale in that business to Saudi Arabian Oil Company (Saudi Aramco).Despite the coronavirus outbreak and lower oil prices, RIL confirmed that the due diligence process for the transaction is ongoing."This increases the likelihood of the transaction going ahead as announced in August 2019," the rating agency said, adding the transaction with Saudi Aramco values the O2C business at USD 75 billion and can potentially result in USD 12-15 billion of cash proceeds for RIL, depending on the amount of debt at the O2C business after the reorganization.Reliance last week approved the biggest-ever rights issue of Rs 53,100 crore at Rs 1,257 per share.The company had reported a 10.5 per cent increase in its reported EBITDA for the fiscal year ended March 31, 2020, as compared to a year ago.While the economic shutdowns due to coronavirus outbreak resulted in a decline in earnings from RIL's O2C and retail businesses for the quarter ended March 2020, its earnings from its digital services continued to grow."We expect the earnings from its O2C and retail business to see a steeper decline in the quarter ending June 2020 as India's economy is scheduled to be under shutdown for at least 45 days in this quarter. An earnings recovery for these segments will depend on the timing of resumption of economic activity, which remains uncertain at this stage," it said.Assuming the economic activity to resume by middle to end of May 2020, the rating agency expected RIL's consolidated EBITDA to decline 10-12 per cent in FY2021 as compared to FY2020. However, the EBITDA is expected to return to FY2020 levels in FY2022 as improved demand in combination with low oil prices will result in higher earnings for the O2C segment, while the earnings growth for retail will resume."RIL's recent foray into online retail through its partnership with Whatsapp and Facebook could result in a further boost in its retail earnings, which is currently not factored in our projections," Moody's said. ANZ BAL

Rights issue credit positive for Reliance; to result in debt reduction: Moody's

New Delhi, Apr 30 () Oil-to-telecom conglomerate Reliance Industries on Thursday posted its biggest drop in quarterly net profit, even as it announced India's largest rights issue and said the Saudi Aramco deal was on track and more strategic investors have evinced interest in buying a stake in its digital platform. Net profit in January-March slipped 37 per cent to Rs 6,546 crore, the lowest in three years, as a rise in consumer-facing business was not enough to shield the firm from fall in the petrochemical business. The profit was also down due to one-off spending. The company's board approved a rights issue of Rs 53,125 crore, which it said was the biggest in India and the first by RIL in three decades. "The price of rights issue has been determined at Rs 1,257 per share and the share ratio at 1:15," the company said in a statement. On the back of last week's USD 5.7 billion (Rs 43,574 crore) Facebook investment in the company's recently created digital arm Jio Platform, Reliance Industries Ltd (RIL) said it is expected to complete capital raising of over Rs 1.04 lakh crore before June. Besides Facebook's 9.99 per cent investment in Jio Platforms and the upcoming rights issue, this fund includes Rs 7,000 crore that it got for selling 49 per cent stake in the fuel retailing business to BP plc of the UK. The company said it is in talks with other strategic and financial investors for a Facebook-sized deal in Jio Platform -- the unit that houses India's youngest but biggest mobile operator. Without revealing the identity of the companies, RIL in its fourth-quarter earnings statement said the investment would be announced in the coming months. The firm further said its board has approved hiving off its USD 75 billion worth oil-to-chemicals business into a separate division to enable the sale of a 20 per cent stake in the unit to Saudi Arabia's national oil company Saudi Aramco. The hiving off will be subject to the approval of the National Company Law Tribunal. "Saudi Aramco due diligence process is on track," it said, without giving timelines for completion of the deal. The firm's billionaire owner Mukesh Ambani had in August last year announced the deal as part of plans to cut debt at the firm to zero by March 2021. The deal was to conclude by March 2020. In the fourth quarter, the company said it had an exceptional item of Rs 4,267 crore which dented the profit. Revenue fell 2.5 per cent to Rs 151,209 crore. Net profit excluding exceptional items increased by 3.7 per cent to Rs 10,813 crore, it said. This is the second quarter in 2019-20 that saw a dip in profit. It had reported a quarter-on-quarter decline in Q1 FY20. Commenting on the results, Ambani, chairman and managing director of RIL, said: "Today I am pleased to announce that despite the daunting challenges arising from the fallout of the global pandemic, our company has once again delivered a resilient performance for FY 2019-20." "Our O2C (Oil to Chemicals) businesses delivered sustained earnings due to its integrated portfolio, cost-competitiveness, feedstock flexibility, and product placement capabilities. We continue to operate all our major facilities at near-normal utilisation levels," he said. The consumer-facing business of retail and telecom further strengthened their leadership positions and recorded robust growth on all operating and financial parameters during the year, he said. "We are fully committed on our investment plans in our consumer businesses and new initiatives. We are at the doorsteps of a huge opportunity and our rights issue and all other equity transactions will strengthen Reliance and position us to create substantial value for all our stakeholders," he said. While oil refining margins rose for the second consecutive quarter, the company opened 468 retail stores and added 26 per cent more subscribers to its Jio mobile phone service that helped increase the profitability of the venture. But the weakness in its traditional petrochemical businesses continued. The operator of the world's largest oil refining complex saw pre-tax earnings from the business rise 28.2 per cent to Rs 5,706 crore in the fourth quarter of the current fiscal year. It earned USD 8.9 on turning every barrel of crude oil into fuel, as compared to a gross refining margin (GRM) of USD 8.2 per barrel in January-March 2019. The GRM was, however, lower than USD 9.2 per barrel earned in Q3. With its retail store strength rising to 11,784 from 11,316 at the end of the third quarter, the retail business posted a 20 per cent jump in pre-tax profit to Rs 2,062 crore. Reliance Jio, the group's telecom arm, posted a standalone net profit of Rs 2,331 crore, which was 177.5 per cent more than the previous year, as subscriber base swelled to 387.5 million. Earning per subscriber rose to 130.6 per month from Rs 128.4 in the previous quarter. The petrochemical business saw pre-tax profit drop 24 per cent to Rs 4,553 crore on fall in product prices. Loss in the oil and gas exploration and production business widened to Rs 485 crore from Rs 267 crore in Q4 FY19. Having completed its major investment cycle, Reliance said its outstanding debt rose to Rs 336,294 crore as on March 31, 2020, from Rs 306,851 crore as on December 31, 2019. Cash in hand increased to Rs 175,259 crore from Rs 153,719 crore at the end of the December quarter. ANZ ANZ ABMABM

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