For instance, Reliance Power Ltd raised over Rs10,000 crore through an initial public offering when the markets had peaked in January 2008. A few months before that, in November 2007, Reliance Industries Ltd raised a little over Rs4,000 crore by selling a 4% stake in Reliance Petroleum Ltd (RPL). Although the markets peaked in January 2008, RPL’s shares had peaked in November 2007.

Back in April 2006, too, when RPL’s shares were first offered to the public, it turned out to be impeccable timing. In fact, the markets started correcting the day RPL shares listed and fell by about 30% in about a month’s time. The net result of all this is that Reliance has spent only around Rs4,260 crore for its 75% stake in RPL, which is now valued at Rs43,800 crore.

Keeping this in mind, investors should perhaps sit up and take notice now that Reliance Industries has announced the sale of some of its treasury stock to raise Rs3,188 crore. The markets have doubled compared with their lows in early March and the Sensex is now nearing the 17,000 mark. Consider also that Reliance Communications Ltd is reportedly in the market to raise funds through a private placement both for the parent company as well as for its tower infrastructure subsidiary.

While there’s little doubt that Mukesh and Anil Ambani’s firms have been selling shares when the markets are euphoric, it’s debatable whether they’ve been accurately predicting market tops and bottoms. Still, given their track record, it seems worthwhile for investors to add caution to their investing decisions.

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