Will price fall after rights issue?
A rights issue is one way for a cash-strapped company to raise capital often to pay down debt. Shareholders can buy new shares at a discount for a certain period. With a rights issue, because more shares are issued to the market, the stock price is diluted and will likely go down.
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.
When should I pay Reliance rights issue?
Reliance had made a Rights Issue of 42.26 crore equity shares at Rs 1,257 each. The final call of 50 per cent of the amount – Rs 628.50 per share – has now become due. … November 10, 2021, was the record date to decide holders of the Reliance Partly Paid-up shares, who need to pay the Second and Final Call.
If you are not interested in this rights issue, you have two options in front of you. One, you can sell these rights on the stock exchange at prevailing market rates. These rights are listed under the symbol ‘RIL-RE’ on NSE, or ‘RELIANCELR’ on BSE.
Selling RE on the stock exchange is permitted until a few days before the issue closing date. “Shareholders not keen to subscribe to their rights can sell it easily to those who want to buy at the traded price on the stock exchange,” says Kkunal Parar, Senior Research Associate, Choice Broking.
Yes, applicants can apply for any number of additional shares but the allotment of the same will depend on shares available for apportionment and will also be in proportion to your holding, irrespective of additional shares applied by applicants.
The broker and research house said in a note the stock could surge up to 83 per cent from the current level in a year. In base case, the potential upside stood at 35 per cent, with the target price at Rs 3,185. All this will be driven by basically three things.
The bonus shares will be issued to “eligible members of the company in the proportion of two new fully paid-up equity share of rupee one each for every one existing fully paid-up equity shares of rupee one each held by them, by capitalising a sum not exceeding Rs 59,91,13,022 out of the company’s free reserves and …
Is Reliance a good buy now?
CLSA said Reliance Industries is at a ‘good entry point’, while upgrading its ratings on the stock to ‘buy’ from ‘outperform’ and raising its price target to ₹2,955 from ₹2,850.
The holders of its partly-paid shares will have to pay Rs 628.5 by November 29. After the formalities related to the final call are complete, the partly-paid shares will get converted into fully-paid shares. RIL has collected Rs 628.5 in two equal tranches of Rs 314.25 in May 2020 and May 2021.
The book value of the Reliance Industries share will get split into two companies Reliance Industries and Reliance Jio, if Reliance Jio gets listed. The share value of Reliance Industries in the stock market will go down.
In simple terms, Right issue of shares means offer of shares to all the existing Equity or Preference shareholders of the Company in proportion to their existing shareholding in the Company.
As per the SEBI mandate, if you neither subscribe (apply) for or sell in the secondary market, these rights (shares) will be extinguished after the closing date.
The RE shares will get lapsed if you do not apply for the rights issue and your Demat account credited with these temporary shares will get debited once the allocation process is complete. If the RE has been purchased, you will also lose the amount paid to acquire those REs.
With the delisting date and the record day set for the final call payment, shareholders of the 42,26,26,894 partly paid-up equity shares must sell their shares latest by 8 November, or pay Rs 628.50 per share during 15-29 November 2021, according to the notification.