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Rediff.com  » Business » Anil's open offer for 20% RCL at Rs 231

Anil's open offer for 20% RCL at Rs 231

Last updated on: June 21, 2005 14:11 IST
Two-days after committing Rs 2,000 crore (Rs 20 billion) into Reliance Capital, Anil Ambani on Tuesday made an open offer to acquire another 20 per cent stake for Rs 1,189 crore (Rs 11.89 billion) at Rs 231 a share, a price considerably lower than the current market price.

Anil and ADA Enterprises Pvt Ltd are making an open offer to acquire additional 5.14 crore (51.4 million) shares at Rs 231 per share, but RCL's scrip is now being traded at over Rs 290 a share.

The offer would open on August 11 and closes on August 30 respectively, Kotak Mahindra Capital Company, manager to the offer, said in statement on Tuesday.

Going by the current trend, market sources said RCL may not get a good response.

Of course, August is still long way to go as far as markets are concerned, and if something drastic happens and RCL scrip value goes below Rs 231, then the open offer may enthuse shareholders, they said.

The offer comes after the settlement of ownership in the flagship Reliance Industries on Sunday, which saw the elder brother Mukesh retaining RIL and IPCL, while Anil being handed over Reliance Energy, Captial and Infocomm, which would come under Anil Dhirubhai Ambani Enterprises.

On June 19, the board of RCL had agreed to issue six crore (60 million) preference shares of the finance company to Anil Ambani and AEPL, also owned by Anil, at Rs 228 per share totalling Rs 1,368 crore (Rs 13.68 billion) and aimed at making RCL the third largest financial house in the country.

After purchasing these preference shares, Anil Ambani and AEPL would acquire maximum 32.03 percent voting rights in the finance company.

RCL has also proposed to issue up to 2.90 crore (29 million) equity shares of Rs 10 each to the financial investors not connected with acquirers.

The acquirers consider RCL as a strategically important entity in the financial services sector and do not have any plans to dispose off assets of RCL in the next two years except to the extent of routine business and reorganisation, it added.

RCL, which already comprises mutual funds and general insurance business, is also eyeing banking sector if the RBI and government relaxed the conditions for industrial houses to set up banks.

Reliance group, before the split, had once showed keen interest in having a life insurance venture, but it did not materialise. Announcing the creation of a new group, Anil had said he wanted to transform Reliance Capital into a full-spectrum financial services powerhouse.

Market sources said RCL should now explore possibilities of venturing into sectors that provide long-term cheap capital like life insurance and pension, once it opened up.

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