THE scrip of Reliance Industries (RIL), India’s largest company by market capitalisation, shed over 7.6% on Friday, just before the promoters converted their 12 crore warrants into an equal number of shares. Posttransaction, the promoter group holds 49% stake in the company, with 52% voting rights. This involves an infusion of around Rs 15,142 crore into the company. The shares have a lock-in period of three years.
Despite the warrant conversion, the promoter group’s stake is below the 51.37% it held in the company on June 30, 2008. A close inspection of RIL’s shareholding pattern reveals considerable changes in the promoter group’s holding during the July-September quarter.
Promoters’ stake had gone down from 51.37% to 44.8% — representing a decline of 9.54 crore equity shares — between July 1 and September 30, 2008. After the warrant conversion, this has gone up to 49%.
During the September quarter, nearly 9.42 crore shares were transferred from the promoter group to various RIL subsidiaries and are now classified as public shareholding, but with non-voting shares.
Replying to questions on these transactions, an RIL spokesperson said: “Eight body corporates holding 9.42 crore treasury shares of RIL for the benefit of its shareholders, have since become subsidiaries of RIL.” RIL market cap dips
“AS A RESULT,these shares do not enjoy voting rights and cannot be classified under promoter group. The promoter group companies have not sold any RIL shares for subscribing to warrants,” the RIL spokesperson added.
The spokesperson also said that loans from RIL to these companies were converted to equity share capital. However, he said that he can’t elaborate on the events that triggered the transfer of ownership in these eight body corporates or the price at which they were transferred. The latest shareholding pattern shows eight subsidiary companies holding 9.42 crore shares of RIL. Among these three private limited companies — Reliance Chemicals, Reliance Polyolefins and Reliance Universal Enterprises — hold 9.02 crore shares or 6.2% stake and five other companies together account for the rest 40 lakh shares.
Since the promoter group’s shareholding has fallen by 9.54 crore in the July-September quarter, there still remains some confusion about 12.55 lakh shares, which is the difference between these two figures. Commenting on the change in RIL’s promoter group shareholding, SP Tulsian, an independent investment advisor, said: “Under the earlier conditions, the conversion of warrants would have taken the promoters’ holding in RIL beyond 55% triggering an open offer under the Sebi guidelines.” It seems the promoters wanted to avoid such a situation.
In the past 10 trading sessions, RIL has lost nearly 15% of its market capitalisation wiping out nearly Rs 44,000 crore of investor wealth. The price-to-earnings ratio (P/E) of the scrip has come down to 12.8, a level last witnessed in June 2006.
Despite the warrant conversion, the promoter group’s stake is below the 51.37% it held in the company on June 30, 2008. A close inspection of RIL’s shareholding pattern reveals considerable changes in the promoter group’s holding during the July-September quarter.
Promoters’ stake had gone down from 51.37% to 44.8% — representing a decline of 9.54 crore equity shares — between July 1 and September 30, 2008. After the warrant conversion, this has gone up to 49%.
During the September quarter, nearly 9.42 crore shares were transferred from the promoter group to various RIL subsidiaries and are now classified as public shareholding, but with non-voting shares.
Replying to questions on these transactions, an RIL spokesperson said: “Eight body corporates holding 9.42 crore treasury shares of RIL for the benefit of its shareholders, have since become subsidiaries of RIL.” RIL market cap dips
“AS A RESULT,these shares do not enjoy voting rights and cannot be classified under promoter group. The promoter group companies have not sold any RIL shares for subscribing to warrants,” the RIL spokesperson added.
The spokesperson also said that loans from RIL to these companies were converted to equity share capital. However, he said that he can’t elaborate on the events that triggered the transfer of ownership in these eight body corporates or the price at which they were transferred. The latest shareholding pattern shows eight subsidiary companies holding 9.42 crore shares of RIL. Among these three private limited companies — Reliance Chemicals, Reliance Polyolefins and Reliance Universal Enterprises — hold 9.02 crore shares or 6.2% stake and five other companies together account for the rest 40 lakh shares.
Since the promoter group’s shareholding has fallen by 9.54 crore in the July-September quarter, there still remains some confusion about 12.55 lakh shares, which is the difference between these two figures. Commenting on the change in RIL’s promoter group shareholding, SP Tulsian, an independent investment advisor, said: “Under the earlier conditions, the conversion of warrants would have taken the promoters’ holding in RIL beyond 55% triggering an open offer under the Sebi guidelines.” It seems the promoters wanted to avoid such a situation.
In the past 10 trading sessions, RIL has lost nearly 15% of its market capitalisation wiping out nearly Rs 44,000 crore of investor wealth. The price-to-earnings ratio (P/E) of the scrip has come down to 12.8, a level last witnessed in June 2006.
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