Stock update: RIL

Stock update: RIL
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First Published: Fri, Sep 18 2009. 09 56 AM IST
Updated: Fri, Sep 18 2009. 09 56 AM IST
Reliance Industries (RIL) raised Rs3,188 crore by selling its own shares, that could help it buy oil fields abroad. It sold 15 million shares of treasury stock at an average price of Rs2,125, a 2.7% discount to Wednesday’s closing price of Rs2,184.
The company’s shares ended 4.5% down at Rs2,086. Over 50 investors purchased the shares. The issuance leads to dilution of 1% on the pre-treasury number of shares.
It is also speculated that the promoters might offload the entire stake held by the Petroleum Trust in the next 12-18 months. The shares sold were carried in the books at a cost of Rs158 per share by the Trust.
Valuation
The financial impact will be reflected in the consolidated statements of the company. It is felt that RIL may use the money to part-pay the debt it took for gas exploration or for acquisition of hydrocarbon assets abroad.
We maintain a BUY on RIL with a target price of Rs2,340.
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First Published: Fri, Sep 18 2009. 09 56 AM IST
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