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Our Bureau

Mumbai, Dec. 4

Promoters of Reliance Energy Ltd would pick up the quota meant for public sector insurance companies in the preferential offer, in the event the latter decline it, a company spokesperson said.

Life Insurance Corporation, New India Assurance, Oriental Insurance, General Insurance Corporation, National Insurance and United India Insurance — which have been long-term shareholders of the company over the past several decades and who collectively hold approximately 18 per cent of equity — have been given the preferential offer by the board of REL.

The spokesperson said that if the insurance companies accept the preferential offer, then post issue, they would continue to hold their current percentage of equity holding.

The company is raising Rs 8,000 crore as fresh equity for several mega projects under implementation. The spokesperson said that the company had various ways to increase capital but it chose preferential issue over ‘rights issue’ as it was less time consuming.

Reacting to the news of capital infusion, shares of REL surged 9.32 per cent and closed at Rs 1,900.15 on the Bombay Stock Exchange on Monday.

However, on Tuesday the stock ended marginally lower at Rs 1893.10 after touching an intra-day high of Rs 1,950. The new equity capital would substantially enhance REL’s net worth and augment its borrowing capabilities.

The company had also said that the proposed capital infusion would help REL rank among the 20 most valuable private sector companies in India in terms of all major financial parameters including assets, sales, net worth, profits and market capitalisation.

More Stories on : Preferential Allotments | General Insurance | Mergers & Acquisitions | Reliance Energy Ltd

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