39 crore shares of RIL exchange hands in block deal

MUMBAI: Reliance Industries counter saw a block deal of about 39 crore shares or 12% of the company equity changing hand on Wednesday morning.

Though the details of the buyers and sellers were not known, market participants said that the block deals were the inter-se transfer of equity holding among promoter group entities.

Earlier on March 9, about 15 firms belongs to promoters group of Reliance Industries sold 39.61 crores shares or 12.2% stake of the company to eight of their own firms through block deals.

Reliance Industries in an exchange filing early this month said that its promoter group entities have proposed to re-structure their shareholding by an inter-se transfer of shares.

As on December 31, 2016, promoters held 46.48% stake in India’s second most valuable company.

According to tax experts, these inter-se transfers were done to save tax. Shares which promoters own prior to 2004 where securities transaction tax (STT) is not paid will not be eligible for exemption from long term capital gains tax (LTCG), after 31st March 2017. So they are doing inter se transfer whereby they end-up paying STT and save on LTCG, chartered accountant said.

The changes to section 10(58) effect in capital gains tax norms were proposed in February 2017 budget.

Reliance Industries shares were traded at Rs 1309, up 1.5% at 12.30 pm.

Reliance Industries Limited (RIL)