Analysts Recommend “Subscribe”
To Reliance Right Issue
biggest ever right issue in the history of the financial market started on 20th May. The Rs. 53,125 crore right issue by
Reliance Industries allowsexisting shareholders to get the company’s shares at Rs. 1,257. An investor holding shares
of RelianceIndustries on 14th May in the demat account would be
eligible to apply for the issue. The entitlement ratio for the right issue is 1 share for every 15 shares held by the
to the numerous reasons, analysis all over are recommending subscription to
Reliance right issue. The following are the reasons that analysts are positive
about this right issue.
The flexibility in the payment system of the right issue is one of the primary
reasons for recommending Reliance right issue. The investor is required to pay just one-fourth of the due amount
initially to invest in a world-class business. The remaining two instalments
fall in the next year.
· With the right issue, the
company will be havingsufficient funds
to lower down its debt levels. The company is on course to meet its target
of becoming debt-free by 2021.
The major part of Reliance’s
value comes from the B2C businesses that include telecom and retail. Both the businesses are performing extremely
well and with the entry of marquee investors, the growth in the business shall continue.
The right issue along with
stake sale in the Jio Platform gives visibility in the cash inflowsof the company.
According to The
Sum-Of-The-Parts Valuation(SOTP), the actual value of the company’s stock
comes around Rs. 1,680. This
suggests that a significant upside
can be seen from the current levels.
Reliance is offering its
business to the current shareholders at a substantial
discount that makes the right issue very attractive.
above mentioned are a few reasons why the analysts are recommending the
investors to subscribe to the Reliance right issue. To know more about the
share market information and opening online demat account,
you can get in touch withIndira Securities.
We are one of the leading share market brokers in India.