28th December 2005: Reliance Anil Dhirubhai Ambani Group on Monday clarified that the four companies arising from the reorganisation of the Reliance group would apply to the Sebi through stock exchanges (SEs) for listing without making an IPO. “Reliance — Anil Dhirubhai Ambani Group will endeavour to list shares of the four resulting companies at the earliest, in the first quarter of the year ‘06,” said a press release on Monday.
The four companies resulting out of the reorganisation are Reliance Communication Ventures (holding company for Reliance Infocomm), Reliance Energy Ventures (holding company for Reliance Energy), Reliance Capital Ventures (holding company for Reliance Capital) and Global Fuel Management Services.
The clarification also listed steps to list the four companies on SEs. After getting approvals from Sebi and SEs, registrars and transfer agents will compile the data to determine names of shareholders of Reliance Industries (RIL) as on the record date —January 25, ‘06. Shares of the four companies will be allotted to shareholders.
While the RIL shareholders, who hold shares in demat mode, will be given an electronic credit of shares, those holding shares in physical mode will be dispatched share certificates by registered post. This involves printing and dispatch of over 55 lakh share certificates by R&T agents for all RIL shareholders, holding shares in physical mode.
After getting the final approval from SEs, the trading of the four firms will commence. “Decisions regarding the inclusion of shares of the resulting companies in the derivatives segment, and the timing may be taken by SEs at the appropriate time,” the release added.
“Only those investors, whose names appear in the register of members as shareholders of RIL as on January 25, ‘06 will alone be entitled to free shares of Reliance Communication Ventures, Reliance Energy Ventures, Reliance Capital Ventures and Global Fuel Management Services on their RIL shareholdings.”
“Investors, who buy shares of RIL on SEs on January 18, ‘06 and thereafter will not be entitled to free shares of the above four companies on such purchases made by them,” the release said, adding, ``Investors, who sell RIL shares on SEs up to and including January 17, ‘06 will not be entitled to free shares of the above four companies on such shareholdings sold by them.”
The period between January 18 and January 25 is the no-delivery period. Whenever a company announces a book closure or record date, the exchange sets up a no-delivery (ND) period for that security. During this period, trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that an investor’s entitlement for the corporate benefit is clearly determined.