MUMBAI, April 28 (Reuters) - India’s Reliance Industries Ltd will consider a rights issue at its board meeting on April 30, in what would be its first such issue in nearly three decades, the oil to retail conglomerate said in an exchange filing late on Monday.
Reliance did not provide any details of the rights issue under consideration.
Shares in the company rose as much as 1.8% in early trade following the announcement, later falling in line with the broader market. At 0455 GMT, the shares were trading down 2% while the Nifty share index was 0.1% lower.
Promoters - as controlling stakeholders are called in India - hold a little over 50% of the company. Analysts said the potential for a rights issue is a positive development and reflects the confidence of management and their commitment to reducing Reliance’s net debt to zero by March 2021.
“It reflects promoter’s unflinching faith in the medium to long term prospects of various businesses,” said Ajay Bodke, chief executive at Prabhudas Lilladher, a portfolio management service company.
“This is an apt opportunity for current shareholders to participate in the likely value unlocking of various businesses over the next couple of years.” (Reporting by Swati Bhat and Savio Shetty; Editing by Christopher Cushing)