Preferential allotment for RIL shareholders

To set up project to create value for RIL's shareholders.

Reliance Industries Ltd (RIL) is planning to reserve a portion of the public issue of its newly launched subsidiary Reliance Petroleum, for its shareholders.

"RIL chose to float Reliance Petroleum to set up the $6 billion project to create value for its shareholders. The move to treat RIL's shareholders preferentially at the time of the Reliance Petroleum IPO is yet another effort in the same direction," said sources close to the development.

"The debt of Reliance Petroleum would have no impact on the RIL balance sheet. This means RIL shareholders are not exposed to the debt of the project," they said.

The sources clarified that the preferential treatment would only be restricted to reservation of shares and there would be no price discount.

Merchant banking circles said a handful of private equity players, including an international oil major, had shown interest in picking up stakes in Reliance Petroleum.

However, it could not be independently verified. Sources close to Reliance Petroleum also said foreign funds could pick up stakes in the company through the float.