RIL- REs: Big game window opens Monday

With trading in right entitlements (RIL-REs) closed on Friday, May 29 (ended 41 per cent higher than Day 1), ushering the final leg of the RIL rights Issue process, holders of REs now have until Wednesday, June 3, to convert REs into shares by paying Rs 314.25 each to RIL.

In online trading buyers consistently outnumbered sellers and were willing to pay a premium over the intrinsic value. REs, allotted in a 1:15 ratio.

Buyers spent an aggregate Rs 2,243 crore ($ 300 million) in seven trading sessions to own RIL-REs.

The REs bought on the BSE and NSE were delivered to the buyers' demat accounts as per the 'T+2 rolling settlement basis', where 'T' refers to the date of trading.

Now that trading in REs is over, holders have until Wednesday, June 3, to use up these entitlements for partly paid RIL shares. Each RE can be converted into one partly paid RIL share by paying Rs 314.25 each.

The demand for REs translates in high subscription of the Rights shares. It is a common trend that in strong issues with assured allotment, institutional investors invest only in the last few days.

Reports suggest an LIC investment of Rs 2,500 - Rs 3,000 crore and French investment bank Societe Generale having bought 32,58,300 REs on May 20, on the very first day.

It may be pointed out that missing the June 3 cut off means losing out on the rights issue benefits and the unsubscribed portion being allotted to those applying for more shares than their REs.

RIL Promoter Group will subscribe to all of the unsubscribed portion in this Issue, if any.

Those subscribing to the rights shares by June 3 can expect allotment of partly paid RIL shares by Thursday, June 11, in their demat accounts. These partly paid shares will be separately listed on stock exchanges and their trading will begin from Friday, June 12, according to the issue schedule given in the Letter of Offer.