Reliance bonus issue: RIL board passes 1:1 issue of free shares with majority votes; Record date fixed

Reliance bonus issue: The oil-to-telecom conglomerate has fixed Monday, October 28, 2024 as the record date for the bonus issue.

Reliance bonus issue: Billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL)’s board passed the issue of bonus shares with a majority in e-voting and also fixed the record date. The oil-to-telecom conglomerate said in a regulatory filing to the stock exchanges on Wednesday, October 16 that it has fixed Monday, October 28, 2024 as the record date for the 1:1 issue of free shares.

RIL board approved the bonus issue in the ratio 1:1 on Thursday, September 5, which was announced during the oil-to-telecom conglomerate’s 47th annual general meeting (AGM) late in August. The board also approved an increase in authorised share capital from ₹15,000 crore to ₹50,000 crore

This is further to our letters dated September 5 and October 16 intimating the approval by the members for the issue of bonus shares in the ratio of 1:1. In this regard, we wish to inform the company has fixed Monday, October 28, 2024 as the record date to determine the equity shareholders eligible for bonus equity shares of the company,” said RIL in its exchange filing today.

Reliance bonus issue details

This marks Reliance’s sixth bonus issue and the first since 2017. Prior to the bonus issue approved in 2017, Reliance issued a 1:1 bonus share in 2009. The bonus shares will be issued by capitalizing from the company’s securities premium account, general reserves, or retained earnings. The company’s pre-bonus paid-up capital currently stands at ₹6,766.23 crore, consisting of 676.62 crore equity shares of ₹10 each, including partly paid-up shares

After the bonus issue, the paid-up capital will double to ₹13,532.46 crore, comprising 1,353.24 crore equity shares. The company estimates that ₹6,766.23 crore will be required to implement the bonus issue, and the final amount will be based on the paid-up capital on the record date.

Also Read: Reliance Industries AGM 2024: RIL to consider bonus shares, Jio-AI cloud to issue 100 GB free storage; 5 key highlights

Reliance Q2 Results

RIL reported a 3.6 per cent year-on-year (YoY) decline in consolidated net profit to ₹19,101 crore during the July-September quarter from ₹19,820 crore in the corresponding quarter a year ago. However, sequentially, or quarter-on-quarter (QoQ), the behemoth’s consolidated profit rose by 9.5 per cent. In Q1FY25, the company reported a profit of ₹17,448 crore.

The company reported a two per cent YoY decline in EBITDA to ₹43,934 crore, while the EBITDA margin shrank by 50 bps to 17 per cent. By the end of Q2FY24, the outstanding debt stood at ₹3,36,337 crore, compared to ₹2,95,687 crore.

The revenue rose 0.8 per cent YoY to ₹2,58,027 crore, compared to ₹2,55,996 crore in the year-ago period. “Our performance reflects robust growth in digital services and upstream business. This helped partially offset the weak contribution from the O2C (oil-to-chemicals) business, which was impacted by unfavourable global demand-supply dynamics,” said Mukesh D. Ambani, Chairman and Managing Director of RIL.

Reliance share price trend

Shares of India’s largest company by market cap have provided 15.27 per cent returns to investors in the last year, against Nifty 50’s return of 26.43 per cent and Sensex’s return of 22.96 per cent. In a technical note, domestic brokerage JM Financial said, “All major selling in the stock in the last 10 months ended marginally below the 100-day EMA levels.”

The stock posted gains for the next five consecutive months after reaching a 52-week low of ₹2,221.05 on October 26 last year. This year, it has only declined in April (down nearly two per cent), May (down nearly two per cent), and July (down nearly four per cent). On Wednesday, shares of RIL settled 0.78 per cent higher at ₹2,708 apiece on the BSE.

Domestic brokerage firm Elara Securities gave the stock an ‘accumulate’ rating. “We reduce FY25E/26E EPS by 14 per cent/8 per cent, led by lower refining and petchem margins. Consequently, we reiterate Accumulate on RIL with TP pared to ₹3,265 (from ₹3,636), primarily on lower FY26E EBITDA. We assume 21.8x (from 22.8x) FY27E EV/EBITDA for retail, 17.5x (from 18.0x) for digital services and 5.5x (from 6.5x) for O2C,” said the brokerage.