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4 June 2020 By Una Galani Follow @ugalani

Purchases by installment are hot in retail but the Indian conglomerate is bringing them back to capital markets. Investors buying into a $7 bln rights issue can settle up through November 2021. It sidesteps a Covid-19 cash crunch and boss Mukesh Ambani’s backstop covers up flaws.

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Reliance Industries on June 3 closed subscriptions for a rights issue worth 531.2 billion rupees ($7 billion) with the order books 1.6 times covered. The entire issue was completed digitally.

The Indian conglomerate is issuing shares at 1,257 rupees each, a 14% discount to the closing price on April 30.

Investors are required to pay 25% when they apply for their subscription, another 25% in May 2021, and the balance 50% in November 2021.

Mukesh Ambani, the chairman and largest shareholder, had agreed to backstop the issuance by buying any unsubscribed shares.

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