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Jio Plans to raise via rights issue an amount of Rs20,000 crore

Reliance Jio issue convertible preference shares to raise funds of Rs20,000 crore.
BY BEx Bureau
BusinessEx
Jul 21, 2017

Reliance Jio Infocomm prepares for the next phase of expansion with a plan to raise Rs 20,000 crore through a rights issue of optionally convertible preference shares (OCPS) to shareholders as the wholly owned unit of Reliance Industries Ltd (RIL).

The Company said in a notice to Bombay Stock Exchange on Thursday, "The board of directors at its meeting held on July 20, 2017, has decided to make a rights issue of 4 billion, 9 per cent non-cumulative optionally convertible preference shares (OCPS) of Rs 10 each for cash at a premium of Rs 40 per OCPS, aggregating Rs 20,000 crore.

The filing further stated that the amount subscribed on each OCPS will be either redeemed at Rs 50 or converted to five equity shares of Rs 10 each at any time of the company's choosing but not later than 10 years from the allotment. OCPS is corporate fixed-income securities that the investor can choose to turn into a certain number of shares of common stock after a stipulated period.

Mukesh Ambani, RIL Chairman said, "Jio has revolutionised the Indian telecom and data consumption landscape. This digital services business has been built to address the entire value chain across the digital services domain with smart applications to make life simple, beautiful and secure... This future-ready network can be easily enhanced to 5G and beyond.

RIL has already invested more than Rs 2 lakh crore in its telecom venture Jio, which started its operations last September and signed up 100 million users in a record 170 days, backed by free voice and data offers till March, triggering a brutal price war. Now, RIL also launched much awaited 4GLTE phone of Rs.0. However, a buyer has to pay one-time security of Rs.1,500 which will be refundable after 3 years.

On Thursday, the company posted a consolidated profit of Rs.9,079 crore for the quarter ended June 30, 2017, compared with Rs.7,077 crore posted for the same quarter last year, as per the reports released by Economic times.

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