LIC TO INVEST UP TO ₹3,000 CRORE IN RIL’S ONGOING RIGHTS ISSUE

MUMBAI: State-run Life Insurance Corp. of India (LIC), the largest institutional investor in the Mukesh Ambani-run Reliance Industries Ltd (RIL), will invest ₹2,500-3,000 crore in the company’s ongoing rights issue, said two people directly aware of the life insurer’s plans.

RIL’s massive ₹53,125 crore rights issue opened for subscription on 20 May.

“LIC plans to subscribe to more than 20 million or more shares of RIL in the rights issue. The proposal has been discussed internally and sent to LIC’s board for approval,” said one of the two persons mentioned above, who did not wish to be named as the internal decision was marketsensitive.

The insurer is convinced that an investment in RIL is likely to fetch an above-average return for all public investors, including LIC, in the medium to long term, as more than half a dozen large global investors have recently shown strong confidence in RIL’s businesses, especially in its digital assets subsidiary Jio Platforms Ltd, said this person.

This is also going to be one of the largest investments by the insurer in any company’s rights issue so far.

“LIC is likely to get the approval of its board for the rights issue investment latest by Monday. LIC has to keep the interest of policyholders as the foremost priority. It has been a long-term investor in RIL and it has benefited thousands of policyholders so far. RIL is no longer just an oil-and-gas company. It has shown tremendous strength in the digital payment and retail space,” said the second person, who also spoke on condition of anonymity.

At present, public shareholders have a 49.93% stake in RIL, of which LIC alone holds 6.01% or 3,71,805,415 shares.