|Rediff India Abroad Home | All the sections|
FIs to pump Rs 1720 cr into REL, Capital
BS Corporate Bureau in Mumbai | June 21, 2005 10:13 IST
Institutional investors on Monday committed to invest Rs 1,720 crore (Rs 17.2 billion) in two Anil Dhirubhai Ambani Enterprises Group companies -- Reliance Energy Ltd and Reliance Capital Ltd.
Ambani had told the media on Sunday that he was flooded with calls from institutional investors wanting to invest in his group.
'Long-term and institutional investors have decided to invest nearly Rs 720 crore (Rs 7.2 billion) in REL and around Rs 1,000 crore (Rs 10 billion) in RCL. This, along with Ambani's personal commitment, will put the total investment at Rs 4,720 crore (Rs 47.2 billion),' sources close to the development said. However, they declined to name the investors.
Both the companies also sent notices to stock exchange on this investment.
Ambani had said on Sunday that he would subscribe to the preferential shares of RCL Rs 228 per share -- a 42 per cent premium over the average share price of the last six months. For REL, he would pay a minimum price of Rs 573 per share representing 8 per cent premium over its average price of the last six months.
REL has cash reserves of Rs 1,110 crore (Rs 11.10 billion) raised through an external commercial borrowings and Rs 790 crore (Rs 7.9 billion) received through foreign currency convertible bond.
These reserves were parked in fixed deposits of various banks and were yet to be put in corporate use.
The company had allotted equity shares on a preferential basis at Rs 640 per share in the last financial year.
It had received around Rs 3,400 crore (Rs 34 billion) from the parent Reliance Industries Ltd and a consortium of financial institutions, led by Life Insurance Corporation of India and General Insurance Corporation of India.
Certain foreign institutional investors like Capital International and Sloane Robinson Investment Management were also part of the allotment by way of international FCCB offering.The FCCBs, with a five-year maturity period, were convertible into global depository receipts at a conversion price of Rs 1,007 per share.