On Friday, Reliance Retail made an announcement on the reduction of the equity share capital to the extent held by shareholders other than its promoters holding company. However, this didn’t go well with share market investors, and they are now venting out their anger and disappointment against the move on social media.
On Friday, an exchange filing by its parent firm Reliance Industries said, “A consideration of ₹1,362 per share, determined on the basis of valuation obtained from two reputed independent registered valuers, shall be paid towards the capital reduction.”
Soon after the decision, the users of Twitter expressed their disappointment with the move. Many users claimed the company was “looting the retail investors”.
A user named @AMalayaliTrader who described himself as a trader and investor tweeted, “Okay, so my unlisted Reliance Retail shares just lost 60% overnight, new fear unlocked. Is it actually possible to “cancel” can’t we decide not to take part.”
Another user tweeted, “Investing in Unlisted Market without Proper Analysis is too Risky, Once Again Proved Reliance Retail taking Shares back at 1,362 while Unlisted Price was Almost Double from it.”
The Board of Reliance Retail on July 4th, approved the decision. According to the company, the capital reduction plan will make Reliance Retail a 100 per cent subsidiary off Reliance Retail Ventures Limited (RRVL) and help in restructuring the business efficiently.
RRVL, the promoter and the holding company of Reliance Retail, holds 99.91 per cent of the share capital of the company.