One of India’s largest conglomerates, India’s Reliance Industries Ltd is likely to consider a rights issue at its board meeting scheduled April 30.
This will be its first such issue in nearly three decades, if an exchange filing late Monday is considered.
That said, the company did not provide any details of the rights issue under consideration.
Equity stocks of the company shot up as high as 1.8 per cent in early trade following the announcement, later falling in line with the broader market. At 10:25 am, RIL shares were trading down 2 per cent while the Nifty share index was 0.1 per cent lower.
According to market analysts, the potential for a rights issue is a positive sign and reflects the confidence of the company management and their commitment to reducing Reliance’s net debt to zero by March 2021.
Portfolio management service company Prabhudas Lilladher’s chief executive officer Ajay Bodke said that the decision reflects the promoter’s unflinching faith in the medium to long term prospects of various businesses.