Reliance Infrastructure today allotted 22.6 million equity shares to AAA Project Ventures, a Reliance Anil Dhirubhai Ambani promoter group company, against convertible warrants issued to them, for Rs 2,095 crore.
As a result of this new equity capital infusion, the promoter group’s holding has gone up to nearly 48 per cent from nearly 43 per cent, the company said.
In April last year, the promoter company converted 19.6 million equity shares and invested Rs 1,821 crore in the company. This investment was made as a part of the 42.9 million warrants allotted by the company in July 2009. The warrants entitled AAA Project Ventures to one equity share of Rs 10 per warrant, at an issue price of Rs 929 per share.
Reliance Infrastructure’s stock fell by 3.8 per cent in today’s trade, to close at Rs 826 per share. Yesterday, the company’s stock went up by 0.3 per cent after the announcement of warrant conversion by the company.
Stock market analysts said the company’s stock has been under-performing for the past three months.
The investment by AAA has been made at a nearly 15 per cent premium to the past two weeks’ average of the company’s stock price. The company said its investment at a premium reflects a strong vote of confidence by the promoter group on the company’s future growth prospects.
“It is a positive move. Promoters investing at a premium will definitely help build confidence in the stock and this investment is book value-accretive as well. The stock has been been under-performing, in line with the infrastructure sector, which has been under-performing, too,” said a Mumbai-based research analyst who tracks the sector.
This equity capital infusion will substantially enhance R-Infra’s net worth to Rs 23,125 crore on a consolidated basis, increasing the company’s financial flexibility.
R-Infra is currently developing 25 infrastructure projects, with a total investment of around Rs 40,000 crore.
It has projects across roads, metro rail and power transmission sectors. It has 12 projects, generating revenue of around Rs 20,000 crore annually, the company said in a release earlier.
