Reliance Industries Right Issue FAQs
Reliance Industries has announced the rights issue and currently the issue is open for subscription which would last till June 3, 2020. This Rights Issue looks and is also similar to most rights issues opened in the past for various companies except one thing which has set this issue apart from others in past.
There is much interest in the issue of the rights of Reliance Industries. While not the first company to raise capital through an offer of rights, it was the first company to credit its shareholders' rights entitlement directly to their demo accounts so that they could trade them on the exchange platform.
With lock-outs still effective in most parts of the country, this electronic credit comes handy for shareholders who would not be able to step outside to submit physical application forms. SEBI, in a recent circular, made buying and selling Rights Entitlements (REs) easy and simple. It could also be a preferred method of raising capital for other companies.
Reliance Industries Right Issue FAQs
1. How will the Basis of Allotment be decided?
Subject to the provisions contained in the Letter of Offer, the Abridged Letter of Offer, the Rights
Entitlement Letter, the Application Form, the Articles of Association and the approval of the
Designated Stock Exchange, Company Board will proceed to Allot the Rights Equity Shares in the
following order of priority:
(a) Full Allotment to those Eligible Equity Shareholders who have applied for their Rights
Entitlements of Rights Equity Shares either in full or in part and also to the Renouncee(s) who has
or have applied for Rights Equity Shares renounced in their favour, in full or in part.
(b) Eligible Equity Shareholders whose fractional entitlements are being ignored and Eligible Equity
Shareholders with zero entitlement, would be given preference in allotment of one additional
Rights Equity Share each if they apply for additional Rights Equity Shares. Allotment under this
head shall be considered if there are any unsubscribed Rights Equity Shares after allotment
under (a) above. If number of Rights Equity Shares required for Allotment under this head are
more than the number of Rights Equity Shares available after Allotment under (a) above, the
Allotment would be made on a fair and equitable basis in consultation with the Designated Stock
Exchange and will not be a preferential allotment.
(c) Allotment to the Eligible Equity Shareholders who having applied for all the Rights Equity Shares
offered to them as part of the Issue, have also applied for additional Rights Equity Shares. The
Allotment of such additional Rights Equity Shares will be made as far as possible on an equitable
basis having due regard to the number of Equity Shares held by them on the Record Date,
provided there are any unsubscribed Rights Equity Shares after making full Allotment in (a) and
(b) above. The Allotment of such Rights Equity Shares will be at the sole discretion of the Board
in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a
preferential allotment.
(d) Allotment to Renouncees who having applied for all the Rights Equity Shares renounced in their
favour, have applied for additional Rights Equity Shares provided there is surplus available after
making full Allotment under (a), (b) and (c) above. The Allotment of such Rights Equity Shares will
be made on a proportionate basis in consultation with the Designated Stock Exchange, as a part
of the Issue and will not be a preferential allotment.
(e) Allotment to any other person, that the Board may deem fit, provided there is surplus available
after making Allotment under (a), (b), (c) and (d) above, and the decision of the Board in this
regard shall be final and binding.
After taking into account Allotment to be made under (a) to (d) above, if there is any unsubscribed
portion, the same shall be deemed to be ‘unsubscribed’.
2. When will the Rights Equity Shares be credited to the demat account?
On or About June 11, 2020
3. When will the Rights Equity Shares get listed on the exchanges?
On or About June 12, 2020
4. Will the Rights Equity Shares trade along with the currently listed Equity Shares of the
Company?
Rights Equity Shares are partly paid up shares and will be allocated a separate ISIN. Hence, it will not
trade with the currently listed Equity Shares of the Company. It will trade separately. Once the entire
Call Money is raised and the Rights Equity Shares are fully-paid up, the Rights Equity Shares will
trade along with the currently listed Equity Shares of the Company.
On payment of the final Call in respect of the partly paid-up Rights Equity Shares, such partly paid-up
Rights Equity Shares would be converted into fully paid-up Equity Shares and shall be listed and
identified under the existing ISIN for fully paid-up Equity Shares of the Company.
5. Will Rights Equity Shares trade freely post listing?
Yes
6. When will next Call Money be payable?
Remaining Call Money will have to be paid, on one or more subsequent Call(s), as determined by the
Board at its sole discretion, from time to time
7. How to withdraw an Application made through ASBA or R-WAP platform?
An Investor who has applied in the Issue may withdraw their Application at any time during Issue
Period by approaching the SCSB where application is submitted or sending the email withdrawal
request to ril.rights@kfintech.com in case of Application through R-WAP facility. However, no
Investor, whether applying through ASBA facility or R-WAP facility, may withdraw their Application
post the Issue Closing Date.
FAQs for Shareholders holding Equity Shares in a physical form
1. Can shareholders holding Equity Shares in a physical form renounce their Rights
Entitlement?
In accordance with SEBI circular SEBI/HO/CFD/DIL2/CIR/P/2020/78 dated May 6, 2020, the Eligible
Equity Shareholders, who hold Equity Shares in physical form as on Record Date and who have not
furnished the details of their demat account to the Registrar or the Company at least two Working
Days prior to the Issue Closing Date, will not be able to renounce their Rights Entitlements.
2. Will share certificates be provided to shareholder holding Equity Shares in a physical form if
demat account is not provided?
No, share certificates will not be provided to shareholder holding Equity Shares in a physical form.
3. Why will physical share certificates not be issued to successful Allottees in Rights Issue?
In accordance with Regulation 77A of the SEBI ICDR Regulations read with the SEBI Rights Issue
Circulars, the credit of Rights Entitlements and Allotment of Rights Equity Shares shall be made in
dematerialised form only.
4. What is the process for the shareholders who have been allotted shares in the rights Issue for
getting the Rights Equity Shares in demat account post allotment?
In case of Allotment to resident Eligible Equity Shareholders who hold Equity Shares in physical form
as on Record Date, have paid the Application Money and have not provided the details of their demat
account to the Registrar or the Company at least two Working Days prior to the Issue Closing Date,
the following procedure shall be adhered to:
(a) the Registrar shall send Allotment advice and credit the Rights Equity Shares to a demat
suspense account to be opened by the Company;
(b) within 6 (six) months from the Allotment Date, such Eligible Equity Shareholders shall be required
to send a communication to the Company or the Registrar containing the name(s), Indian address,
email address, contact details and the details of their demat account along with copy of self-attested
PAN and self-attested client master sheet of their demat account either by post, speed post, courier,
electronic mail or hand delivery;
(c) Company (with the assistance of the Registrar) shall, after verification of the details of such demat
account by the Registrar, transfer the Rights Equity Shares from the demat suspense account to the
demat accounts of such Eligible Equity Shareholders;
5. How much time will it take to get the Rights Equity Shares credited in demat account for those
investors who have not provided their demat account details during issue period?
The Company (with the assistance of the Registrar) shall, after verification of the details of demat
account by the Registrar, within reasonable time initiate the process of transfer of the Rights Equity
Shares from the demat suspense account to the demat accounts of such Eligible Equity
Shareholders.
10. What is the last date for providing the demat account details for getting the Rights Equity
Shares Allotted in the Issue in such demat account?
Within 6 (six) months from the Allotment Date, Eligible Equity Shareholders shall be required to send
a communication to the Company or the Registrar containing the name(s), Indian address, email
address, contact details and the details of their demat account along with copy of self-attested PAN
and self-attested client master sheet of their demat account either by post, speed post, courier,
electronic mail or hand delivery for getting the Rights Equity Shares Allotted in the Issue in demat
account.
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