Reliance Industries Ltd (RIL) may offer dematerialised shares while making its 1:1 bonus issue, signalling the beginning of a new trend of paperless issues.
National Securities Deposi-tory Ltd (NSDL) managing director C B Bhave said RIL has provided its shareholders with the option of receiving the shares in dematerialised or paper form. He suggested that the move may spark off a trend, with more corporates following suit.
In a statement, RIL confirmed: Reliance Industries will issue bonus shares in demat form to those shareholders who opt for the electronic form.
RILs move marks the first time a corporate is considering making a bonus issue without any actual issue of paper. Reliance is to get its shareholders preference by end-November. The company had announced a 1:1 bonus issue in June. Sources said the shares would never be created in paper if the proposed plan was approved by RIL shareholders. Instead, they would be directly transferred electronically into the investors account.
Sources said such an issue of shares by a corporate to its shareholders would be a new practice. However, a precedent does exist for electronic transfer of new shares, during the merger of the erstwhile SCICI with the Industrial Credit and Investment Corp of India (ICICI).
If we are to dematerialise the existing shares, then why print paper at all for the forthcoming issue?...The shares could be directly credited into the investors account, Bhave said.
Bhave pointed out that until now, only 2 per cent of the total market value of shares has been dematerialised, which is about Rs 10,000 crore worth of shares. In other words, only 68 crore shares have been dematerialised. The total market capitalisation of shares in India is about Rs 450,000 crore.
