Demand for RIL-RE grows, average premium up 19% on Friday

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SME Times News Bureau | 22 May, 2020
Reliance Industries-Entitlement witnessed a further rise in demand on Friday with the average premium increasing by over 19 per cent.

RIL-REs, on an average, commanded a premium of Rs 33.45 on Friday, 19.2 per cent higher than Rs 28.07 from the previous trading session and 138.9 per cent up from Rs 14 on Wednesday.

Right Entitlements trading at a premium to the intrinsic value reflects continued strong interest, analysts said.

The volume-weighted average price (VWAP) of RIL-REs improved to Rs 218.76 on Friday, May 22, 2020, from Rs 215.07 of Thursday, and Rs 184 of Wednesday.

Intrinsic value of the Rights Entitlement is the difference between RIL share price and the Rights Issue price of Rs 1,257. At RIL's VWAP of Rs 1,442.3, the RE's intrinsic value stood at Rs 185.3 on Friday, which is the difference between Rs 1,442.3 and rights issue price of Rs 1,257.

Over Rs 1,000 crore of RIL-REs have been traded on stock exchanges in the first three days of listing, notwithstanding the fact that it is listed in trade-to-trade segment and buyers must take delivery of the REs.

Over 5 crore RIL-REs were traded on stock exchanges in the first three days of listing. This is more than 10 per cent of the total REs issued of 42.26 crore.

The price of RIL-RE soared from Rs 158.05 at debut on Wednesday, to Rs 215.20 at close on Friday, a gain of Rs 57.15 or 36.2 per cent.

RIL-REs -- the first Rights Entitlement ever traded on stock exchanges -- have created immense wealth for RIL shareholders on debut.

Current market value of all RIL-REs has exceed Rs 9,200 crore.

RIL Rights Issue is the first issue to use the online platform for trading rights entitlement (RE) as introduced by the Securities and Exchange Board of India (SEBI) earlier this year.

Every eligible shareholder holding shares on May 14, 2020 (Record Date) in demat mode, got Rights Entitlement (REs) credited in their Demat Account. The investors can sell the Rights Entitlements on the secondary market platform of the stock exchanges in the same manner as any listed equity shares.

On April 30, the RIL Board approved the rights issue of up to Rs 53,125 crore at Rs 1,257 per share, with the share ratio of 1:15. The closing date of the issue is June 3.