RIL record date for rights issue

Reliance Industries rights issue

Reliance Industries Limited (RIL) on 30th April announced a rights issue of 1 equity share for every 15 shares held by its existing investors. This decision was made based on its objective of making RIL a net debt-free company. Reliance Industries Limited has also brought in several multinational companies to invest in the conglomerate to achieve this objective. The investors are Facebook Inc, Silver Lake, Saudi Aramco, etc.

Facebook Inc and Siver Lake to invest in Jio platforms business whereas Aramco to invest in the Oil refinery business. Facebook to invest a  9.99% stake in Jio platforms for Rs. 43,574 crores. Silver Lake to invest Rs.5,655 crore in Jio platforms at an equity value of Rs. 4.90 lakh crore for the business.

What is the record date?

Record date is the day in which a company takes into account the existing shareholder details for the purpose of dividend payment and distributions. The shares of a company are actively traded in the market and thus its shareholders also change. Hence for the purpose of dividend payment and distribution of other rights to shareholders the company has to make sure to record the details of its shareholders. This is done at the record date and the information is collected from the stock exchanges.

Reliance Industries Limited has received approval from the Securities Exchange Board of India (SEBI) for the proposed rights issue. RIL has filed May 14 as the record date for determining shareholders eligibility for the rights issue. The rights issue is proposed to raise Rs. 53,125 crore. It is issued at a price of Rs.1,257 a discount of 14 percent from its closing price on April 30.

“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 opening and closing dates of the rights are yet to be announced.

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