(Bloomberg) -- Reliance Industries Ltd., India's largest company by market value, plans to sell shares to existing investors for the first time in about 30 years as the energy-to-technology conglomerate steps up efforts to pare debt.
The board of the Mumbai-based company will consider a proposal for the rights issue on April 30, when it announces its earnings for the quarter ended March 31, it said in a statement late Monday. The shares fell 1.8% as of 11:49 a.m. in Mumbai trading.
The proposal would be the third fund-raising announced by Reliance Industries in recent weeks, underscoring Chairman Mukesh Ambani's confidence despite a pandemic that's slammed the oil industry. Reliance unveiled a $5.7 billion investment by Facebook Inc. in its digital platform last week and in early April said it would raise as much as 250 billion rupees ($3.3 billion) through non-convertible debentures.
“This is another step towards becoming a net debt free company,” said Sudeep Anand, head of institutional research, at IDBI Capital Market Services Ltd. After the Facebook deal, the company still needs to raise about 1.1 trillion rupees to get to zero net debt, he said by phone.
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Ambani said in August that the group had a net debt of about $20 billion as of March 2019 and told shareholders that he would cut that to zero by early 2021. A key part of that strategy has hit a hurdle. A proposal to sell an estimated $15 billion stake in Reliance Industries' refining and chemicals unit to Saudi Arabian Oil Co. is still pending as crude oil prices crashed.
Reliance shares have dropped about 7.2% this year, compared with a 23% slide in the benchmark S&P BSE Sensex index.
The sale of shares to existing shareholders by Reliance Industries would be the company's first fund-raising from the public in 29 years, the Economic Times said.
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