The promoters, the Anil Dhirubhai Ambani Group (ADAG), will pump in nearly Rs 6,500 crore by subscribing to preferential equity shares and convertible warrants.
The insurance companies, which collectively hold 18 per cent, will be provided an opportunity to subscribe to the offer on a pro-rata basis.
If they do so, they will bring in nearly Rs 1,500 crore.
Priced at Rs 1,812 a share, the preferential offer is a 4.25 per cent premium over Friday’s stock closing at Rs 1,738 on the Bombay Stock Exchange and a 5 per cent premium over the Securities and Exchange Board of India formula on pricing such issues.
Once the issue is complete, the Anil Ambani group’s equity in REL will go up to nearly 42 per cent from 36 per cent.
The shareholding of the insurance companies—LIC, New India Assurance, Oriental Insurance, GIC, National Insurance and United India Insurance— will be unchanged at 18 per cent if they subscribe to the offer.
If not, their shareholding will be reduced since the company’s capital base will be expanded.
The company has some Rs 20,000 crore worth of projects on hand, which include the Mumbai metro, the second phase of the Delhi metro, and the Worli-to-Nariman Point sea-link.
Indian promoters have been scaling up their shareholding in the past few years. Recently, Reliance Industries chairman Mukesh Ambani announced scaling up his stake in the company by 4 per cent to 54.6 per cent through warrants.
The Tata group and the Aditya Birla Group also announced that they would raise stakes in group companies.
REL Chairman Anil Dhirubhai Ambani said: “The new equity infusion of capital of up to Rs 8,000 crore will propel Reliance Energy into a completely new orbit, facilitating our participation in a large number of forthcoming mega projects for the benefit of our over 1.5 million shareholders.”
The proposed capital infusion will enhance the company’s net worth to Rs 20,000 crore from Rs 10,052 crore.
At a 1:1 debt-equity ratio, the company’s borrowing capacity will also go up to Rs 20,000 crore, which will enable greater participation in investment-heavy infrastructure projects.
Reliance Energy stock price movement in the last six months...
