Reliance Industries Rights Entitlement shares jump 11% on Day 5 on high volumes

Mumbai: With just two more trading sessions to go, the de-materialised trading of Reliance Industries Ltd - Rights Entitlement (RIL-RE) on Wednesday closed with a 11 percent gain over the previous day.

RIL-RE closed at Rs 201.5, a gain of 11 percent over Tuesday's close, after touching an intra-day high of Rs 209.90, according to stock exchange data.

While oil-to-telecom behemoth RIL's Rs 53,125 crore mega rights issue opened for subscription by shareholders last week, it has become the first issue where eligible shareholders got the rights entitlements (REs) in demat, which could be traded on stock exchanges.

RIL-RE continued to command a healthy premium over its intrinsic value in its fifth trading session with healthy volumes.

On Wednesday the RIL share price closed at Rs 1,445.55 on the NSE. At this price, the intrinsic value of RIL-RE works out to Rs 188.5 (difference over the rights issue price of Rs 1,257).

Thus, at the closing price, RIL-RE commanded a premium of Rs 12.95 -- a 6.9-plus percent premium over the intrinsic value at market closing prices.

Total 93 lakh RIL-REs changed hands on the NSE and BSE on Wednesday, with a total traded value of Rs 167.3 crore.

In five trading sessions. More than Rs 1,450 crore of trades have taken place on stock exchanges – all at a premium to the intrinsic value.

Over 7.6 crore RIL-REs have traded on stock exchanges in the five trading sessions of listing. This is more than 18 percent of the total REs issued (42.26 crore).

The volume-weighted average price (VWAP) of RIL-REs stood at Rs 179.8 on Wednesday on the NSE. The RIL VWAP for the day was Rs 1,430.20.

RIL-RE trading began on 20 May and Friday will be the last day for buying or selling rights entitlements on NSE/BSE.

It is the first rights entitlement ever traded on stock exchanges.

In the rights issue, the company will offer one share for every 15 shares held at Rs 1,257 per share.

This will be the first issue where the rights entitlements will be credited to eligible shareholders' demat accounts and will be freely tradable.

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)