Reliance Industries Limited (RIL) is taking the Bombay High Court order of 15 June, on gas supply to Anil Ambani’s Reliance Natural Resources Limited (RNRL), to the Supreme Court.
The HC order had told RIL to supply gas from its D6 well in the KG basin to RNRL at a set price, much lower than the government-fixed supply price of US $4.2/mmbtu, based on a previous agreement between the two firms.
The order further said that, alternatively, the two warring brothers’ firms could sit together and work out an agreed alternative.
However, RIL replied to RNRL saying that it would do no such thing unless the central government said so (the government fixes supplier and price of the gas).
RIL’s reply had also said it did not concur with RNRL’s interpretation of the findings in the said judgment and the order dated 15 June, and, thus, the question of deliberately, wantonly or otherwise defying the implementation of the order of the Honourable Court does not arise.
It is perceived that new allocation could take a backseat if the gas issue goes to the Apex Court and uncertainty lingers on. This could impact gas demand and ramp-up beyond 80 mmscmd. Other user-industries and firms like fertilisers could also be impacted.
We maintain a BUY recommendation on RIL, with target price of Rs2,375.