RIL may rewrite the recent history of rights issues

The Rs 53,125 crore rights issue of Mukesh Ambanis Reliance Industries Limited (RIL) expected to open during the month may rewrite the recent history of “rights” as the previous large rights issues by companies have typically had a strike rate of 25-28 percent from shareholders.

This includes the top 10 rights issues and all the large rights issues of the Tata group.

The Bharti Airtel rights issues launched in May 2019 with a size of 24,939 crore got 15 percent response from shareholders with 27,301 applications on the total number of shareholders at 1.86 lakh.

The Vodafone Idea issue in April last year received 26 percent applications. The issue size was Rs 25,000 crore and out of the 3.39 lakh shareholders, 87,248 shareholders applied.

The issue of Tata Steel to the tune of Rs 12,704 crore received 39 percent applications from shareholders as of the total of 7.40 lakh shareholders, the number of applications was 2.91 lakh.

The Tata Motors issue in 2015 to the tune of Rs 7,497 crore received 25 percent applications as 90,631 shareholders applied out of 3.66 lakh.

The Tata Power issue in March 2014 got 38 percent applications as 89,840 applied out of 2.36 lakh for an issue size of Rs 1,993 crore.

The TV 18 issue in 2012 for Rs 2,700 crore got 21 percent response from 12,976 shareholders out of 60,373.

Similarly, the Network 18 issue at the same time for Rs 2,700 crore got only 8 percent applications from 4,304 shareholders out of a total of 56,075.

The rights issue of Tata Motors in September 2008 got only 3 percent applications from 7,911 shareholders as compared to the total of 3.09 lakh shareholders.

The HIndalco rights issue, in the same month, for Rs 5048 crore received 9 percent applications from 30,505 shareholders as against a total of 3.33 lakh shareholders.

State Bank of India fared much better as the rights issue in February of 2008 got 51 percent response as 2.73 lakh shareholders participated out of 5.38 lakh shareholders.

The rights issue of Tata Steel in November 2007 got a higher response of 77 percent with 4.41 lakh shareholders applying out of 5.70 lakh for an issue size of Rs 9,135 crore.

―Outlook India