RIL partly paid shares to delist; sell your stock or make final payment by this date to avoid forfeiting value

RIL partly paid-up shares are trading at Rs 1,879 per share today.
(Image: REUTERS)

Reliance Industries Ltd’s partly paid shares will delist from stock exchanges on 8 November, with the second and final call of Rs 628.50 per share due later this month. RIL has fixed 10 November as the record day for the final call payment, according to a notification to the exchanges. With this, Mukesh Ambani’s firm will complete the largest rights issue — Rs 53,124 crore — seen by domestic markets till date. RIL partly paid-up shares are trading at Rs 1,879 per share today, while the fully paid-up shares of the oil-to-telecom conglomerate of Mukesh Ambani are trading at Rs 2,521 per share.

Second call payment due soon 

With the delisting date and the record day set for the final call payment, shareholders of the 42,26,26,894 partly paid-up equity shares must sell their shares latest by 8 November, or pay Rs 628.50 per share during 15-29 November 2021, according to the notification. Failing to make the final call payment, the part value paid so far will be forfeited. “The partly paid-up equity shares of the Company currently held, including the amount already paid thereon are liable to be forfeited in accordance with the Articles of Association of the Company and the LOF,” Edelweiss Alternative Research wrote in a note earlier this year.

Fresh RIL partly paid shares were allotted to shareholders after making 25% payment including first call of Rs 314.25 per share. Shareholders who failed to make the first call had to pay an interest of 8% per annum for delay in payment till the actual payment date. Those who made the first call payment, are now liable to make the second and final call payment. 

Passive fund inflows expected

Post the delisting of the partly paid shares, eligible shareholders will get ordinary shares credited to their accounts. After conversion to ordinary shares, Reliance Industries Ltd (RIL) may witness inflow worth $395 million from passive buying, said Abhilash Pagaria of Edelweiss Alternative Research. “Once the RIL partly paid shares gets converted to Ordinary shares, it will result in increase in shares outstanding and hence lead to slight weight up in various Indices,” he said. Sensex funds could see inflows worth $55 million, while Nifty index fund inflows will be worth $150 million, and MSCI funds may see inflows worth $190 million. Edelweiss said that FTSE Index and as per their understanding, will see no flow impact.

The expected change in weight by various indices should take place in mid to late December once the converted shares are issued and listed, according to edelweiss. The adjustments date for all the indices will be different. The partly paid shares were trading at a premium to the fully-paid up shares earlier last week, however, the same has now moved to a slight discount.

Currently, institutional investors such as State Bank of India, Aditya Birla Sun Life Asset Management Company, Mirae Asset Global Investment, Vanguard Group, ICICI Prudential Life, HDFC AMC, Morgan Stanley, Edelweiss AMC, among others hold partly paid shares of Reliance Industries.