The subscription on the issue of rights for Aditya Birla Fashion and Retail (ABFRL) which opened on July 8 will close on July 22. The corporate has expected to boost Rs 995 crore with a face value of Rs 10 each through its rights issue of 9.05 crore partially paid-up equity shares. As per the company’s offer letter, transactions in the right entitlement of renunciation were permitted from 8th July to 17th July 2020.
The share of Aditya Birla Fashions and Retail Rights Entitlement (RE) plummeted 74.5 percent from its Rs 31.85 high, to close at Rs 8.10 trillion on Friday, the last day of trading, on July 9, 2020.
The stock may perform well, as per the analyst, until the market operations return to normal after the introduction of the vaccine as its main revenues are focused on the formal and high-end products. The company’s stock is currently valued at about a multiple of 5 PE that will convince to be an appealing value until the business resumes.
“A further draw will be the improved balance sheet after the debt reduction.
Three-tranche payment
The rights eligibility ratio is 9:77, meaning qualifying owners can earn 9 partly paid-up rights securities for each 77 equity shares held as of July 1 record date. ICICI Securities, SBI Capital Markets, Axis Capital, BNP Paribas, and CLSA India Pvt Ltd are the lead managers for the issue.
Link Intime India Pvt Ltd is the registrar to the issue. According to the firm, investors must pay on request the first instalment of Rs 55 (50 percent of the issue price) per share. Although the remaining balance will be payable in two parts, the second instalment in January 2021 will be Rs 27.5 (25% of the problem price) and therefore the third instalment in July 2021 will be Rs 27.5.
How the RE platform at SEBI helps investors
“SEBI has launched the rights entitlement platform, the shareholders who had entitlement to the rights shares either subscribed or transferred it to the other buyers for a little or no fee, or left it to resign”, said Singh
Shares in Aditya Birla Fashion and Retail traded at Rs 114.65 percent, down 0.43 percent in the afternoon deals, compared to a 0.69 percent increase in BSE Sensex.
