Unlisted Reliance Retail surges as RIL tweaks mandatory share swap

Shares of Reliance Retail, the unlisted arm of Mukesh Ambani’s Reliance Industries, rebounded sharply in the unofficial grey market on Thursday after the company tweaked the terms of a restructuring agreement.

Reliance, in an extraordinary general meeting (EGM) on Thursday, made the share-swap scheme for shareholders in the retail venture optional as against mandatory earlier. Now, shareholders of the Reliance Retail can retain their shares in the company.

Reliance Retail shares bounced to Rs 700 in the grey market after falling to below Rs 450, said brokers dealing in this space. In December, the stock was trading at as high as Rs 900 a piece. The scheme provided for exchange of RIL shares with shares of Reliance Retail, said a Reliance Retail spokesperson.

“The scheme was proposed to provide liquidity to the shareholders of RRL. It was clarified that the option was available to exchange or retain Reliance Retail shares,” he added.

“The extraordinary general meeting held on Thursday, January 23 has revised the scheme of arrangement from mandatory to optional,” said Sambhav Aggarwal of Delhi-based Arms Securities, which deals in unlisted shares.

On December 25, RIL proposed a scheme of arrangement where Reliance Retail shareholders were offered one share of RIL in exchange of four shares of Reliance Retail. This scheme valued the shares of Reliance Retail at about Rs 380 per share when they were trading at Rs 850-900 per share in the unofficial market then.

The revised scheme of arrangement said shareholders should exercise the option entirely and no partial swap will be allowed. Other than the equity shares retained by specified shareholders, the rest would be transferred to the company and shares of RIL will be issued in the ratio 1:4.

Reliance Industries holds 99.95% stake in Reliance Retail. About 35 lakh equity shares are available in the unlisted market.