Institutional investors to pump Rs 1,720 cr into REL, Reliance Capital

Both the companies also sent notices to stock exchange on this investment.

Ambani had said that he would subscribe to the preferential shares of RCL Rs 228 per share "" a 42 per cent premium over the average share price of the last six months. For REL, he would pay a minimum price of Rs 573 per share representing 8 per cent premium over its average price of the last six months.

REL has cash reserves of Rs 1,110 crore raised through an external commercial borrowings (ECBs) and Rs 790 crore received through foreign currency convertible bonds (FCCBs). These reserves were parked in fixed deposits of various banks and were yet to be put to corporate use.

The company had allotted equity shares on a preferential basis at Rs 640 per share in the last financial year. It had received around Rs 3,400 crore from the parent Reliance Industries and a consortium of financial institutions led by Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

Certain foreign institutional investors (FIIs) like Capital International and Sloane Robinson Investment Management have subscribed to FCCBs. The FCCBs, with a five-year maturity period, were convertible into global depository receipts (GDRs) at a conversion price of Rs 1,007 per share.