Mukesh Ambani-owned Reliance Industries kicked off its Rs 53,125-crore rights issue on Tuesday, which is the biggest-ever equity fundraise by an Indian company. The company says 75 per cent (Rs 39,755.08 crore) of the fund raise will be used in deleveraging its balance sheet to become net debt-free by March 2021. The rights issue will be allotted at Rs 1,257 per share in the ratio of 1:15, that is, 1 share for every 15 held as of record date, which was May 14. The issue will remain open till June 3. You need to pay 25 per cent of the issue price (Rs 314.25) while applying for it. The balance needs to be paid in two tranches - Rs 314.25 in May 2021 and Rs 628.50 in November 2021. The share will be allotted and listed on June 10 and June 12, respectively. If you do not want to subscribe to the issue, you can renounce your rights entitlement (RE) in the secondary market. In fact, RIL-RE jumped over 39 per cent to hit day's high of Rs 211.60 on the NSE.
How to subscribe to it?
There are three ways to apply for a rights issue - two online methods and one offline.
Apply through ASBA
Most large banks such as SBI, Bank Of Baroda, UCO Bank, HDFC Bank, Kotak Mahindra Bank and Axis Bank etc offer you Applications Supported by Blocked Amount (ASBA) facility to apply for rights issue through their net-banking. These banks are certified by Sebi and are called Self-Certified Syndicate Banks. You can check out the list below:
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35
You only need to log in to your bank's website and go under the ASBA option. It will showcase all active issues. Click on the RIL's rights issue and the bank will direct you through the application process.
The advantage of ASBA option is that your bank will block the application amount towards the rights issue. But, this will still be in your account and continue earning interest. It is only after the allotment that the money will be debited from your account. In case of partial or no allotment, the bank will release the amount for the portion not allotted.
Apply through Karvy Fintech website
You need to log on to the following website:
https://rights.kfintech.com
You'll receive various options on the home page. First, verify or update your email id, mobile number and PAN registered with Karvy Fintech, then go under 'Apply for Rights Issue' option. You need to select your depository participant (NSDL/CDSL) and provide client ID or DP ID. Fill up the online form along with making payment. You'll receive an acknowledgment after successfully completing the process. Note that the application money will be debited immediately from your account.
Offline method
The Application form must be in your email box or you can download it directly from the RIL or Karvy Fintech website. Print and fill up this form and submit the signed form physically to the nearest branch of your bank. No cheque needs to be attached with the application form. This is the offline ASBA method. Your bank will block the application amount that you have mentioned in the form and you'll keep earning interest on the same until the allotment process is completed.
How to sell your rights in the secondary market?
If you don't want to participate in the rights issue, you can sell your rights entitlement on the BSE or NSE like any other equity. You can search for it under the equity segment on the NSE as Reliance Industries Limited-Rights Entitlement (RIL-RE) and as RELIANCELR on the BSE. The trading of rights issue is allowed only till May 29. You can also do it offline by issuing delivery instruction slip to depository participant.