Let me try and help answer some of these questions. First, let us understand the rights issue and what Reliance has planned.
Reliance had a share price of 1450/- when the Rights issue happened. They gave the Rights shares at a discounted price of 1257. The payment for the rights issue will be taken over 3 installments. The first installment at the closure of the issue of 314.25 has been paid by people who have bought the rights. The second payment is due May 2021 and the third is due Nov/Dec 2021.
So 314.25 (June 2020) + 314.25 (May 2021) + 628.5 (Nov/Dec 2021) = Rs. 1257/- the rights issue price.
Now the Reliance PP of 314.25 has listed and then had to match the price of the underlying Reliance share.
So today Reliance is at Rs. 1900/- so Reliance PP = 1900 - ( 314.25 + 628.5, yet to be paid amounts) = 950 ish.
Hence the return for Reliance PP seems higher right now and the percentage move as well.
- Reliance PP = Reliance Partially Paid, meaning these shares have not been paid for in full yet.
- Paid Up capital = To the money paid vs. money due to the rights issue share. In this case, paid-up is 314.25 and the rest 950 is to be paid.
- This is the rights issue Reliance did to raise funds.
- As described above Reliance is fully paid-up share vs. Reliance-PP is partially paid.
- They are not different stock and prices will move together in the same direction to match each other. The choice to be made is do you want to invest in reliance stock or not. Difference Reliance PP is less priced for now till the next installment comes due. Then you the owner of the PP share will have to pay the installment to retain the share. Or you buy Reliance fully paid share now and have no future installments to pay. Either way, they will merge to the same price Dec 2021.
- Reliance PP is better in the sense it gives you the option of installments to pay up the full price of the share.
Second, there is an issue that you will not get the full dividend. you will get the paid capital percentage of the dividend. Paid capital is in the following percentages 25% + 25% + 50% (314.25+314.25+628.5).
Hope this helps!