In a significant move, Reliance Infrastructure (R-Infra) informed that it is all set to sell 42.9 million convertible warrants to its promoters, the Reliance-Anil Dhirubhai Ambani Group (R-ADAG), for Rs 4,290 crore.

This will help Reliance Infrastructure Ltd. to enhance its net worth to over Rs 16000 crore and to increase its borrowing capabilities to Rs 32000 crore. It will make it easy even at a debt: equity ratio of 2:1.

The Board of Directors of Reliance Infrastructure Limited has already approved a proposal for the same.

R-Infra will issue warrants to its promoters. Before that they cancelled almost the same quantity of warrants they had subscribed to in January last year.

The price, Rs 1,000 per share has been fixed for the new set of warrants, which is subject to obligatory approvals from shareholders. The current price is 10 per cent lesser than the R-Infra stock's closing price of Rupees 1,120 on BSE on Friday.

On the other hand it is 83 per cent elevated than the standard stock price in the last three months and 26% more than the average price in the last two weeks.

Confirming the development, Anil Dhirubhai Ambani (Chairman, Reliance Infrastructure Ltd.) said, "We have a great sense of excitement at the unprecedented opportunities unfolding before Reliance Infrastructure, in high growth areas of power and infrastructure development. The new equity capital infusion reflects our strong confidence in future growth prospects of the Company."

As per the SEBI rules & regulations, 25 per cent upfront payment will be made by the promoters of the company and the rest will have to be made on conversion, which can happen within 18 months of the allotment.

The company's net worth will be amplified to Rs 16,000 crore and the promoter's shareholding will go up by 10% to 48%.

It should be mentioned here that LIC, country's largest life insurance firm holds 13 % in R-Infra. Apart from this, other pioneer life insurance companies like Oriental Insurance, New India Assurance, General Insurance and National Insurance also hold 1-2% each in the company.

Due to the ongoing global economic crisis many promoters had cancelled conversion of warrants, which has compelled SEBI to raise the upfront payment to 25%.