RIL-Rights Entitlement trade ends 41% higher than first trade

Mumbai: The de-materialised trading of Reliance Industries Ltd-Rights Entitlement (RIL-RE) on Friday ended with last trade happening at Rs 223, up 41 per cent over the first trade, according to stock exchange data.

RIL-REs were first traded on May 20 at a price of Rs 158.

In just seven trading sessions, RIL-REs created great value for investors. At Friday's closing price, RIL shareholders collectively became richer by nearly Rs 9,425 crore thanks to the REs.

RIL-REs commanded a premium to their intrinsic value on each of the seven trading sessions.

At Friday's close, buy orders for 4.8 lakh REs were pending on NSE, more than double of 2.4 lakh pending sell orders.

As many as 11.4 crore REs – or 27 per cent of all REs issued – changed hands in the seven trading sessions, worth nearly USD 300 million or Rs 2,243 crore.

This first-of-its-kind online listing of REs provided investors with a mechanism to transparently discover the value of their Right Entitlements. It also provided a convenient way to buy or sell RIL-REs.

The volume-weighted average price (VWAP) of REs stood at Rs 218.40 on Friday, marginally lower from Thursday, with 38 lakh REs changing hands. The REs traded at an average premium of Rs 7.9 above their intrinsic value for the day. Considering the RIL VWAP for Friday stood at Rs 1,467.5, the intrinsic value of REs stood at Rs 210.5.

RIL-RE began trading on May 20 simultaneously with the opening of the rights issue. Friday was the last day for buying or selling Rights Entitlements on NSE / BSE.

Each RE entitles its owner to subscribe one RIL partly-paid share by paying Rs 314.25 before June 3, 2020.

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 in demat, which could be 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.