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INDIA BUSINESS WORLD - October 1st October 15th 2008
RIL PROMOTERS RAISE STAKE IN CO TO 49% POST-Q2 REJIG
THE scrip of Reliance Industries (RIL), the country’s largest company by market capitalization, has shed over 7.6%, just prior to the promoter group’s conversion of its 12 crore warrants into an equal number of shares. Following the transaction, the promoter group holds 49% equity 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% stake it held in the company on June 30, 2008. A close examination of RIL’s shareholding pattern reveals considerable changes in the promoter group’s equity holding in the company during the July-September quarter.
The RIL promoter group’s shareholding had gone down from 51.37% to 44.8%, representing a decline of 9.54 crore equity shares between July 1 and September 30. This has gone up to 49% post the warrant conversion.
During the September 2008 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, RIL’s 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. As a result, these shares do not enjoy voting rights and cannot be classified under the promoter group. The promoter group companies have not sold any RIL shares for subscribing to warrants.” The spokesperson also said loans from RIL to these companies were converted into equity share capital.
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