Reliance Industries Ltd, or RIL, has been selling its treasury stock at astonishing speed to raise money either for a global acquisition or new greenfield projects. India’s largest private sector firm has raised $2 billion (Rs9,080 crore today) in three rounds of sales since September.
The Ambanis are past masters in the art of raising money at the opportune moment. Many private sector companies will be lining up to sell shares to investors this year, to repair balance sheets and to keep money at hand when the capex cycle turns. The government will also be in the market for funds when it sells shares in the firms it owns in an attempt to bridge a yawning fiscal gap.
It is hard to guess how much money will be raised from the primary equity market in 2010. But here are some numbers for context: Rs34,000 crore was raised in the 2007 bull market, Rs16,900 crore in 2008 and Rs19,558 crore in 2009. The RIL?mop-up is a bit of a pre-emptive strike, even as private companies await regulatory clearance and the government struggles with privatization.