Mukesh Dhirubhai Ambani wrote the largest-ever cheque by a promoter to purchase a company’s shares on Friday. A jaw-dropping Rs 15,142 crore (or $3.2 billion), which is the payment to convert 12 crore preferential warrants into equity shares of Reliance Industries (RIL), makes a statement about his confidence in the company.
With this, the promoter group’s holding in RIL rebounds to 54.99% on the expanded equity base, after dropping from 51.37% in August to 44.8% in September —- a decline of 6.57%. Company sources were quick to clarify the decline in shareholding was due to a “reclassification” wherein 6.48% of the treasury stock was categorised as being held by subsidiaries sans voting rights.
The fall in the RIL share proved a big drag on an already brittle Sensex on Friday, which ended down 529 points. The RIL share has a 14.52% weightage in the index. The share has fallen nearly 39% in 2008, compared with a 38% slide in the benchmark, indicating their close correlation.