Presented by: Bhawna Sikka Nikhil Mansukhani Renu Yadav Vandana Bharti Brijmohan Parashar Chandan Kumar Amrita

Mishra

Reliance Industries Limited is India's largest private sector conglomerate company by market value.

Annual turnover of US$ 44.6 billion and profit of US$ 3.6 billion for the fiscal year ending in March 2010.
One of India's private sector Fortune Global 500 companies.

Ranked at 264th position (2009).

It was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a pioneer in introducing financial instruments like fully convertible debentures to the Indian stock markets.

Reliance Petroleum Limited was set up by Reliance Industries Limited (RIL). One of India's largest private sector companies based in Mumbai.

Currently, RPL is subsidiary of RIL, and has interests in the downstream oil business.
RPL also benefits from a strategic alliance with Chevron India Holdings Pte Limited, Singapore, a wholly owned subsidiary of Chevron Corporation USA (Chevron), which currently holds a 5% equity stake in the Company.

IPO: September 1993 (for Jamnagar refinery expansion plan) Offering Details: TOCD issued of FV Rs. 60

TOCD breakup 2 Equity shares of Rs. 10 each Rs. 40 Non Convertible debentures with warrants (detachable)

Analyst views: Trading Value of the debenture - Rs. 48 and the probable warrant value Rs. 5 each in the market Against shares worth 40 in the case of surrender Result of Analysis: No investor will turn up to surrender the TOCDs

Higher conversion price for warrants(Rs.13.3) in comparison to MV of Rs. 20

Conversion of debenture to equity resulted in reduction of debt : equity ratio (lowering) RPL exercised the call provision and redeemed the convertible portion of O/S TOCDs. Again for reduction of Debt Equity ratio

TOCD Conversion to Equity Shares OR

Redemption

Yield earned by an investor who exercised the option of converting NCD plus warrants into three equity shares sold them in September, 2002.
September, 1993 (NCD+ 2 warrants)
September, 2002 Sold for RS.69 (23*3)

Present value=Rs. 40 69=40{1+(YTM/100)}9 Therefore, YTM= 6.25%

Sept, 1993 (40+20)

May, 1998 Nov,1999 44(2 equity Equity shares) share=Rs.20 + 10(2 warrants)

Nov, 2000 Equity share= Rs.30

Nov, 2001 Equity Share=Rs. 30

60 = 54/{1+(YTM/100)}5 +20/{1+(YTM/100)}6 +30/{1+(YTM/100)}7 +30/{1+(YTM/100)}8

Therefore, YTM= 13.89%

Sept, 1993 (40+20)

May, 1998 (Rs.44)

Nov, 1999 (Rs. 50)

Nov, 2000 (Rs. 50)

Nov, 2001 (Rs. 30)

60= 44/{1+(YTM/100)}5 + 50/{1+(YTM/100)}6 +50/{1+(YTM/100)}7 + 30/{1+(YTM/100)}8

Therefore, YTM = 17.89%

April, 1998 (Rs. 58)

Nov, 1999 (Rs. 50)

Nov, 2000 (Rs. 50)

Nov, 2001 (Rs. 30)

58 = 50/{1+(YTM/100)}1 + 50 /{1+(YTM/100)}2 + 30/{1+(YTM/100)}3 Therefore, YTM = 60.18%