The Rs 53,125 crore rights issue of Mukesh Ambani's Reliance Industries Limited (RIL) expected to open during the month may rewrite the recent history of "rights" as the previous large rights issues by companies have typically had a strike rate of 25-28 % from shareholders.
This includes the top 10 rights issues and all the large rights issues of the Tata group.
A rights issue is a way of a listed company to raise funds by inviting existing shareholders of the company to buy additional shares at a specific price. The promoters of the company have said that apart from subscribing to the entitlement fully, they will also buy unsubscribed shares, if any. The company said that price for the Rights Issue is at Rs 1,257
This has been done with the aim of raising funds for the company and pare debt as the oil-to-telecom conglomerate aims to be a zero net debt company by March 2021. Outstanding debt of RIL as on March 31, 2020 was Rs 336,294 crore ($44.4 billion).
The Bharti Airtel rights issues launched in May 2019 with a size of 24,939 crore got 15 % response from shareholders with 27,301 applications on the total number of shareholders at 1.86 lakh.
The Vodafone Idea issue in April last year received 26 % applications. The issue size was Rs 25,000 crore and out of the 3.39 lakh shareholders, 87,248 shareholders applied.
The issue of Tata Steel to the tune of Rs 12,704 crore received 39 % applications from shareholders as of the total of 7.40 lakh shareholders, the number of applications was 2.91 lakh.
The Tata Motors issue in 2015 to the tune of Rs 7,497 crore received 25 % applications as 90,631 shareholders applied out of 3.66 lakh.
The Tata Power issue in March 2014 got 38 % applications as 89,840 applied out of 2.36 lakh for an issue size of Rs 1,993 crore.
The TV 18 issue in 2012 for Rs 2,700 crore got 21 % response from 12,976 shareholders out of 60,373.
Similarly, the Network 18 issue at the same time for Rs 2,700 crore got only 8 % applications from 4,304 shareholders out of a total of 56,075.
The rights issue of Tata Motors in September 2008 got only 3 % applications from 7,911 shareholders as compared to the total of 3.09 lakh shareholders.
The HIndalco rights issue, in the same month, for Rs 5048 crore received 9 % applications from 30,505 shareholders as against a total of 3.33 lakh shareholders.
State Bank of India fared much better as the rights issue in February of 2008 got 51 % response as 2.73 lakh shareholders participated out of 5.38 lakh shareholders.
The rights issue of Tata Steel in November 2007 got a higher response of 77 % with 4.41 lakh shareholders applying out of 5.70 lakh for an issue size of Rs 9,135 crore.