This website uses cookies to ensure you have the best experience. Learn more

Ril Case Study Tocd

1157 words - 5 pages

Financial Management (Case Study-1)
Reliance Industries Limited
Triple Option Convertible Debentures


Submitted By:
Group-8:
Abhishek Kumar (BLP038)
Aparna Chowdhry (BLP040)
Maninder Bisen (BLP042)
Vivek Kumar (BLP044)
Manjesh Bharati (BLP046)
Raman Girdhar (BLP048)

Question-1:
Discuss in detail the benefits of convertible securities for the issuing company as well as the investors. Briefly discuss the potential drawback of convertible securities for both?
Ans-1
Benefits to Issuer:
* Companies have incentive to raise convertible debt, rather than traditional debt, because the interest payments on ...view middle of the document...

Drawback for Issuer:
* The possibility of forced conversion is only one of the downsides of convertible securities.
* Another disadvantages for convertible security issuers is that financing with convertible securities runs the risk of diluting not only the EPS of the company's common stock, but also the control of the company.
* If a large part of the issue is purchased by one buyer, typically an investment banker or insurance company, conversion may shift the voting control of the company away from its original owners and toward the converters.

Benefits to Investors:
* Since convertible securities combine the benefits of stocks and bonds, investors in such bonds benefit from interest payment and the underlying stock increases in terms of higher prices of the bonds.
* Convertible securities, or converts, give the holder the option to exchange the security for a predetermined number of shares in the issuing company.
* Because of its dual nature as a security and an equity option, convertible securities allow investors to participate possibly in the upside gains of the stock while protecting possible downside through the guaranteed continuous coupon payments.

Drawbacks for Investors:
* Convertible securities offer a lower interest rate. In addition, if the stock price declines the security price will also drop.
* One downside of convertible securities is that the issuing company has the right to call the securities.
* Because convertibles can be changed into stock and thus benefit from a rise in the price of the underlying stock, companies offer lower yields on convertibles. If the stock performs poorly there is no conversion and an investor is stuck with the security’s sub-par return (below what a non-convertible corporate security would get). As always, there is a tradeoff between risk and return.
Most convertible securities are structured as unsecured debt for the issuer, meaning that if the issuing company were to become bankrupt and default on the security, the buyer of the security has a lower priority claim on the company's assets, after the secured straight debt holders have been paid off. Therefore, although the possible upside gains on the convertible security is higher than a normal security; its default risk is also relatively higher.

Question 2.

Evaluate the three initial options provided to the RPL TOCD holders on the basis of yield to maturity. Assume that a TOCD holder sold the RPL shares and each warrant (in the case of Option I) issued in September 1993 are Rs. 22 and Rs. 5...

Other Papers Like Ril Case Study Tocd

Freedom And Responsibility Essay

2141 words - 9 pages amendment is “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercises thereof” (Jordan, 1999). Therefore, the first amendment states citizens have freedom of religion and exercises of the religion. The article entitled “Lawsuit alleges FBI violated Muslims’ freedom of religion,” published by Jerry Markon, Washington Post Staff Writer, justifies the detailed case of the FBI surveillance targeting Muslims for

Hate Crime Laws Essay

2348 words - 10 pages Death of James Byrd”). While this particular case may give the appearance that perpetrators of hate crimes receive appropriate punishment, almost a decade later, one particular case demonstrates the inequity in the application of hate crime punishments: In 2007, Sean Kennedy of Charleston, South Carolina, left a bar around 3:45 am and was confronted by Stephen Moller, who called him a “faggot” and then punched him so hard in the face that his

Rational Emotional Behavior Therapy Case Study Conceptualization And Treatment Plan

2140 words - 9 pages Rational Emotional Behavior Therapy Case Study of Sarah: A Conceptualization and Treatment Plan Rational emotive behavior therapy, REBT, was developed by Albert Ellis and holds the central belief that the events in our lives do not cause our disturbances but that they are instead caused by our view of the events (Murdock, 2009). Murdock (2009) states that “people are seen as responsible for their behavior” (p. 279) but, because they are

Holidays In Albania

1636 words - 7 pages Have you ever thought about having exciting and incredibly cheap vacations? Albania might be the right choice. According to My Travel Guide, Albania is ranked the fourth among ten places worth visiting in Eastern Europe (“Top 10 Eastern European Destinations”). One can encounter three kinds of vacations in this Mediterranean country: winter, summer, and cultural. The ideal places to spend your winter vacations are the Albanian Alps. They are

A Heart Of Darkness

1748 words - 7 pages In this short story, there are frequent significant subject and ideas that make the story, "A Heart of Darkness," by Joseph Conrad, and haunting novel. The main theme is absolute white power over the natives. The theme validates the corruption, and the dependence caused by the white people as they took over the Congo. White men were giving all the power; they had no self-control, and in the end they did not use wisely. The white men became

The Aspects Of Vulnerability Among The Exploited In Medical Research

2287 words - 10 pages proceeding examples. The Willowbrook Hepatitis Studies was a case in which individual rights were severed and respect for one’s autonomy was lost. In 1947, in Staten Island, NY, Willowbrook was opened. Willowbrook State School was a state-funded institution for developmentally disabled children intended to accommodate approximately 4,000. By 1965, that number reached a population high of about 6,000. This high population mixed with a short staff led

The Hitchhiker’S Guide To The Galaxy

1171 words - 5 pages had this strange unaccountable feeling that something was going on in the world, something sinister.’ ‘No,’ said the old man, ‘that’s just perfectly normal paranoia. Everyone in the Universe has that,’” (Adams 160). The novel reinforces absurdity in the universe as Arthur’s fair attempt to study the universe is refuted with a simple response suggesting that the facets of the universe should be easy to comprehend. The film however, had Arthur make

The Ford Motor Company Wage Increase Of 1914 And The Theory Of Incentives And Efficiency Wages

1252 words - 6 pages doubling these wages can only be justified if, in some other way, it generates an equal or superior amount of value (either through a better product, lower costs, or both). According to the theory of incentives and efficiency wages, this is indeed the case, and Henry Ford even asserted that this decision was one of the best-cost cutting judgements they ever made (Raff and Summers 1987). This paper will outline the history of Ford Motor’s 1914

Historical Analysis Of The Economical Breakthroughs Of The Industrial Revolution

1396 words - 6 pages revolution, capitalism was used as the dominant form of economy in England. This helped England’s economy become consistent and organized throughout the country. However, it also posed certain, significant, problems. In order for the perfect capitalism to be achieved, every citizen had to begin equal. This was not the case, as many descendants of nobility and very early entrepreneurs started England's switch to capitalism with a lot more money than most

Leadership Portrayed in Monologue from Shakespeare’s Henry V

1214 words - 5 pages for their family and their country’s reputation. (Jacqueline and Milton, 2012)In real life case, a successful leader usually has good communication skill when talk to followers, people cannot influence their team members without connect communication to them. Language is a most powerful tool used by leader to manage and influence people in different industries. (Seargeant, 2009) Henry’s speech with unlimited energy and confidence, he cheers up

Cuba Civil Rights

1906 words - 8 pages Oct 2013. "World Report 2013 Cuba."Human Rights Watch.Human Rights Watch, 2013.Web. 14 Oct 2013. Wylie, Lana. "The Special Case of Cuba."International Journal 67.3 (2012): 661-84. ProQuest.Web. 9 Oct. 2013. "2012 Human Rights Reports: Cuba." U.S Department of State Diplomacy in Action.Bureau of Public Affairs, 19 04 2013.Web. 14 Oct 2013.

Related Essays

Ramdev Industries Limited Essay

1592 words - 7 pages CASE 2 RAMDEV INDUSTRIES LIMITED Suraj Kapoor passed his B.Sc. in 2000 and joined a commercial bank in the clerical cadre. He Serve there for three years. He was not happy with the job prospects and wanted a better deal in life. He quit the job obtained his post-graduate qualification in personnel management, and thereafter/took up a job with a large public sector organization in Pune as a Trainee Officer in the Personnel Department. He was

E Payments Proceeds And Improvements Essay

8509 words - 35 pages . She has conducted a study entitled E - Payments: Proceeds and Improvements Mrs. Dipika Malpekar Sr. Manager (Finance) Date: 20th May,2015 Place: Mumbai CERTIFICATE This is to certify that the project titled “ E-Payments: Proceeds and Improvements ” has been successfully and satisfactorily completed and submitted by “Devashree Nadkarni” bearing a register number, 1420740 as a student of Institute of Management, Christ University in

Effect Of Deregulation Of Pol Products

3716 words - 15 pages ), Oil and Natural Gas Corporation (ONGC), Reliance Industries Limited (RIL) and Essar Oil Limited (EOL) was 2037.5 lakh metric tonne during 2011-12. The total import of crude was 1717 lakh metric tonne and total imports including some petro-product imports was 1867 lakh metric tonne. The export of petro-products was 608 lakh metric tonne, making net imports approximately 1260 lakh metric tonne during last financial year. Therefore, treating the

Reliance Telecom Essay

4135 words - 17 pages market analysis, After that I started with the second phase which involved research work pertaining to the customer analysis. In this report I have explained what I undertook based on research and my personal experience. I have also tried to understand business relations with the market developers, business strategies, and ethics and work compliance in an industry as an additional part of my study. HEMANT PAL SINGH