Reliance Shares at 9-Year High After Ambani Revamps Holding

Updated on
  • Eight entities to acquire 1.2 billion shares from 15 firms
  • Transaction will not trigger open offer for shares: filing

Mukesh Ambani.

Photographer: Simon Dawson/Bloomberg

Reliance Industries Ltd. shares traded near a nine-year high after Mukesh Ambani, India’s richest man, announced plans to revamp his holding in the company valued at $22 billion.

Reliance shares rose as much as 4.1 percent to 1,287.80 rupees, the highest level since May 2008, and were at 1,265.55 rupees at 10:58 a.m. in Mumbai. It was the biggest gainer on the benchmark BSE S&P Sensex. The company has added almost 18 percent since the day before its Feb. 21 announcement that its telecommunication unit would begin charging for services from April.

The owners will transfer Reliance’s shares held in 15 entities to eight firms, the company said in an exchange filing on Thursday, without giving details. The eight entities will acquire as many as 1.2 billion shares through a transfer on exchanges as early as March 9, according to the filing. The shares are valued at about 1.5 trillion rupees ($22 billion) as of Thursday’s closing price of 1,236.75 rupees.

The selling firms will each retain at least 100 shares of Reliance, according to data compiled by Bloomberg. Reliance, India’s second-largest company by market value, runs businesses ranging from oil refining to retail and telecom. The company has spent more than $25 billion on its fourth-generation wireless data network. Reliance Jio Infocomm Ltd. started services in September.

The transaction is exempt from rules under India’s takeover code and the purchasers won’t have to make an offer to minority shareholders, according to the filing. The eight companies will acquire the shares at the market price prevailing on the date of transaction, according to the filing. However the price will not exceed 25 percent of 1,100.78 rupees a share, which is the weighted average market price in the last 60 trading days.

(Updates with share price in the first and second paragraphs.)
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