Investment Advice for Stocks (Share), MF and Personal Finance » RIL

Reliance Inds Q1 net up 32% on higher gas output

admin — Tue, 27 Jul 2010 17:54:25 +0000

Energy group Reliance Industries posted a 32% rise in fiscal first-quarter profit, slightly better-than-expected, helped by higher gas output from its fields off India’s east coast and improved refining margins.

The company posted April-June net profit of Rs4,851 crore versus Rs3,666 crore a year earlier

India’s largest listed conglomerate, controlled by billionaire Mukesh Ambani and with interests in petrochemicals, refining, oil and gas exploration, and retail, said it saw improved margins across all its businesses in the June quarter.

Reliance Industries, which has been looking to build its business beyond the domestic energy sector, recently made a dramatic return to India’s telecom arena and has announced plans to enter the country’s power sector.

“Reliance has also committed itself to participate in the high growth and exciting area of broadband wireless,” Ambani said in a statement.

“Both these initiatives are in line with the strategy to identify and invest in new, value creating businesses.”

In June, the firm said it would invest $1.36 billion in the US shale gas assets of Pioneer Natural Resources, its second such investment in as many months.

Reliance posted April-June net profit of Rs4,851 crore ($1.04 billion) versus Rs3,666 crore ($785 million) a year earlier.

A Reuters poll had forecast quarterly net profit of Rs4,830 crore. Gross refining margins at Reliance’s flagship refining business showed signs of recovery and stood at $7.3 per barrel for the June quarter, but was still lower than market forecasts for $7.7 a barrel.

The margins stood at $6.8 a barrel in the year-earlier quarter. Reliance GRMs had dropped 24% in the March quarter, and had nearly halved in the December quarter. Analysts expect margins to rise as the global economy recovers.

Ambani, the world’s fourth-richest man, struck a deal in May with his long-estranged younger brother Anil allowing them to compete directly with each other. Mukesh has since pursued markets where Anil is an established presence.

This came after the Supreme Court in May backed Mukesh in a bitter public dispute over gas pricing that had hit Reliance Industries’ share price performance.

Shares in Reliance, valued at around $74 billion, have fallen 3.4% in 2010, while the Mumbai market has gained 3.5%.

Ahead of the earnings announcement, shares in Reliance ended up 0.1% at Rs1,053.50 in the main market that rose 0.3%.

Reliance Inds Q1 net up 32% on higher gas output is a post from: Indian Stock Market Tips

Sensex ends with modest gains; TCS surges 6%

free stock tips — Fri, 16 Jul 2010 10:55:00 +0000

The benchmark Nifty has seen a consolidation for third consecutive day and closed with modest gains on Friday, led by technology, telecom, realty, select oil & gas and financial companies’ shares.

However, the sell-off in Reliance Industries , HDFC, HDFC Bank, GAIL, ITC, M&M, Reliance Power, Ambuja Cements, Siemens, Sun Pharma , Tata Power and Power Grid Corporation along with metal companies’ shares capped the gain to larget extent.

The 30-share BSE Sensex closed at 17,955.82, up 46.36 points and the 50-share NSE Nifty rose 15.15 points to 5,393.90. Even European markets were quite supportive; CAC, DAX and FTSE were trading 0.5-0.9% higher, at the time of closing of Indian equities.

Market breadth was positive; about 1745 shares advanced while 1411 shares declined on BSE. Nearly 177 shares remained unchanged.

Everonn Education, TCS, BF Utilities, IFCI, TCS, Tata Motors and Axis Bank were the most active shares on exchanges.

In the midcap space, UTV Software, Edelweiss Capital, Rallis India, Tulip Telecom and Rajesh Exports rallied 5.5-8% while Honeywell Automation (post disappointing numbers – profit slipped by Rs 10 crore), Sterlite Tech, Graphite India, Bayer Cropscience and JSL lost 2.3-6.5%.

In the smallcap space, Everonn Education surged 13.27%, Nikhil Gandhi promoter of Pipavav Shipyard may pick up stake in company, reports CNBC-TV18 quoting sources.

Standard Industries, Ramsarup Inds, Kirloskar Ferro and Hindustan Motors (Mitsubishi Motors plans to buy company’s South India plant, reports CNBC-TV18 quoting DowJones) went up 9-10%.

However, NESCO, Elpro Intl, GMR Industries, Manaksia and BL Kashyap declined 4-6%.

Markets reported total turnover of Rs 80,118.83 crore. This included Rs 13,399.93 crore from NSE cash segment, Rs 62,439.33 crore from NSE F&O and the balance Rs 4,279.57 crore from BSE cash segment.

At 14.35 hrs IST, the Sensex was trading choppy in a narrow band of 20 points. The action was mainly seen in the broader markets. Heavy buying was seen in IT, telecom and banking stocks. Oil&gas, metal and power stocks were trading weak today. BSE Midcap and Smallcap index were up 0.4% and 0.7% respectively.

The Sensex was up 29.19 points or 0.16% at 17938.65, and the Nifty was up 7.25 points or 0.13% at 5386.00. About 1739 shares advanced, 1268 shares declined, and 325 shares remain unchanged.

In the largecap space, TCS was the top gainer with 7% gains. HCL Tech, Kotak Mahindra, Tata Motors and IDFC were up 2-4%. On the losing side, Ambuja Cements, GAIL, Mahindra and Mahindra, HDFC Bank and HDFC were down 1-2%.

Index heavyweight Reliance was trading at Rs 1,066.00 down 0.65% from its previous close of Rs 1,072.95. Tech major Infosys was trading at Rs 2,771.65 up 0.46% from its previous close of Rs 2,758.95. Refinery major HPCL was trading at Rs 448.10 up 0.56% from its previous close of Rs 445.60.

Hindustan Lever was trading at Rs 264.85 up 0.63% from its previous close of Rs 263.20. Cigarette major ITC was trading at Rs 297.50 down 0.6% from its previous close of Rs 299.30.

Top gainers on the BSE Midcap: Edelweiss Capital, UTV Software, Tulip Telecom, Gujarat Flourochem and Zydus Wellness were up 5-7.6%.

Top losers on the BSE Midcap: Honeywell Automation, Sterlite Technologies, Graphite India, Allcargo Global and Gee Kay Finance were down 2-5%.

Top gainers on the BSE Smallcap: Standard Industries, Hindustan Motors, Mastek, Ramsarup Industries and Geometric were up 8-10%.

Top losers on the BSE Smallcap: NESCO, Manaksia, BL Kashyap, aurionPro Sol and JK Paper were down 3-5.5%.

Today’s new listing

– Technofab Engg was trading at Rs 297.75, up 24.06% over its issue price of Rs 240 per share.

TCS, BF Utilities, HPCL, Sintex India, BPCL and Tata Motors were the most active shares on the exchanges.

In the midcap space, Zydus Wellness, Gujarat Flourochem, UTV Software, Rallis India and Omaxe gained 3.5-6%. However, Sterlite Tech, Ashok Leyland, Patel Engg, Dewan Housing and Graphite India fell 2-3%.

In the smallcap space, ILandFS, Transport Corp, Vipul, Agro Tech Foods and Maharashtra Ele were up 5-6.6%. However, Subhkam Capital, JK Paper, Maharashtra Polybutenes, Vinati Organics and Orient Abrasive lost 3-4%.

Sensex ends with modest gains; TCS surges 6% is a post from: Indian Stock Market Tips

Improved refining margins, KG basin gas output may boost RIL

free stock tips — Fri, 09 Jul 2010 06:16:00 +0000

India’s most valuable company, Reliance Industries Ltd (RIL), is expected to post higher revenue and profit for the quarter ended March, benefiting from improved crude refining margins and gas output from the Krishna-Godavari (KG) basin.

Net profit is likely to increase 31% from a year earlier to Rs5,078.17 crore in the January-March period, according to the average of estimates by seven brokerages polled by Mint.

Revenue is estimated to more than double to Rs59,780 crore.

The Mukesh Ambani -led company, which has interests in sectors as diverse as oil, yarn and organized retail, will announce its earnings on Friday.

Net profit is likely to grow 31% from a year earlier to Rs5,078 crore in the January-March period, say analysts

The company’s gross refining margin (GRM)—earnings from turning crude into a variety of fuels—in the March quarter is estimated at $8.13 a barrel, sustaining the company’s lead over the Asian benchmark Singapore GRM, which averaged $4.9 (around Rs361) per barrel in the same period.

“Sequential improvement in global GRMs is expected to have an amplified effect on RIL’s GRMs and refining segment profitability..,” wrote Rohit Nagraj, an analyst for domestic brokerage Prabhudas Lilladher Pvt. Ltd, in a 6 April research note.

Average KG basin gas volumes estimated at about 60 million cubic metres a day (mmcmd) would boost profitability further, Nagraj wrote.

During the January-March quarter last year, RIL had neither started gas production nor was its 580,000-barrels-a-day Jamnagar refinery fully operational.

In a 31 March note, Macquarie Research’s Jal Irani and Abhishek Agarwal wrote that they anticipate a strong March quarter for RIL “as it benefits from the upswing in GRMs” due to its refining facilities, which have doubled in capacity and improved quality of refining.

The world’s largest refining complex in Jamnagar is capable of refining the lowest grades of crude to produce a high proportion of light and middle distillates such as diesel.

On 13 April, rating agency Standard & Poor’s upgraded its outlook on the company from “negative” to “stable”, saying it reflected its “expectation of an improvement in RIL’s financial metrics”.

The improvement over the past year is “sustainable”, it said.

During Q4 of FY10, crude prices firmed in the range of $71-83 per barrel, after swinging from an all-time high of $147 a barrel in July 2008 to $30 levels by December of the same year.

Still, the company’s shares underperformed the Bombay Stock Exchange’s benchmark Sensex index by 22% in the fiscal ended March—the first dip in five years and the largest this decade.

Eroding refining margins and an ongoing legal tussle with an Anil Dhirubhai Ambani Group-owned company as well as with NTPC Ltd tempered investor sentiment.

Anil Sharma and Ravikumar Adukia, analysts with Nomura Financial Advisory and Securities (India) Pvt. Ltd, said in a 5 April note that the stock slide followed “four straight years of outperformance ranging from 8% to 49% (an average of 26% for the last four years)”.

RIL has been engaged in a nearly four-year-old legal fight with Reliance Natural Resources Ltd (RNRL) controlled by Anil Ambani the estranged younger brother of Mukesh Ambani, over 28 mmcmd of gas that RNRL wants from RIL’s KG D6 block at a price that is 44% lower than a government-set price.

The Supreme Court verdict—one of the key overhangs on the share price last year—on the case is expected soon.

Since the beginning of 2010, the company has seen two of its acquisition bids fail—for Netherlands-based LyondellBasell Industries AF, and debt-strapped Value Creation Inc. of Canada—but finally signed a joint venture in early April with Atlas Energy Inc. for the latter’s shale assets in a deal that will cost $5.2 billion.

Macquarie’s Irani and Agarwal wrote in another 12 April note that the benefits to RIL from the large shale field, especially in a lucrative and nearby market like the US, could be substantial.

“With RIL’s core existing refining business looking up…and incremental volume growth from the KG basin…,” they wrote, “we believe that the current transaction is the icing on the cake.”

Source : Live Mint

Improved refining margins, KG basin gas output may boost RIL is a post from: Indian Stock Market Tips

RIL –Buy- Angel Securities

free stock tips — Tue, 29 Jun 2010 03:49:00 +0000

Reliance Industries (RIL) and Reliance Natural Resources (RNRL) have entered into a new gas supply agreement, as directed by the Supreme Court. The Supreme Court had ordered the two companies to renegotiate the Gas Supply Master Agreement, which was signed between the Ambani brothers as part of the business de-merger in 2005.

While the companies have not disclosed the details of the agreement, however, speculation is that RIL will supply 28 million mmscmd (metric standard cubic metres) to RNRL for 17 years at the government fixed price of $ 4.2/mmbtu. The quantity and the term of the supply are likely to be determined by the EGoM. With the gas supply agreement in place, the ADAG Group will now speed up its power generation projects.

It may take 3–4 years for creating a gas-based generating capacity of 8,400 MW, including its existing projects and the upcoming one in Dadri, Uttar Pradesh. The move improves the project visibility for upcoming power projects of ADAG. However, it does not have much implication on RIL. We continue to maintain BUY on RIL with a target price of Rs1,260.

RIL –Buy- Angel Securities is a post from: Indian Stock Market Tips

Reliance Industries Ltd (RIL) to buy shale gas asset in US

admin — Wed, 23 Jun 2010 04:41:41 +0000

This is the fourth such deal in this space in the US this year, reflecting the growing interest of firms in such assets

Reliance Industries Ltd, , plans to buy a 45% stake in the Eagle Ford shale gas field in Texas for $1.35 billion (Rs6,210 crore), according to the Financial Times, thereby acquiring its second shale gas asset in the US. An RIL spokesperson declined to comment.

The Eagle Ford shale is owned by Pioneer Natural Resources Co. In April, RIL took a 40% stake in Atlas Energy Inc.’s Marcellus shale in the US.

Shale gas is a form of natural gas trapped in fine-grained sedimentary rocks. Bloomberg reported the deal last fortnight.

“Shale gas is a very good business to enter. The internal rate of return is attractive since the risk associated with discovery and exploration is low,” said Deepak Pareek, oil and gas analyst at Angel Broking.

An oversupply of natural gas in the US has sent prices crashing, forcing US oil and gas firms to rely on foreign firms for capital. Pioneer and Atlas reported net losses of $245.25 million and $2.1 million respectively for the quarter ended 31 March.

RIL is likely to generate $18 billion in cash between 2011 and 2014, according to a Goldman Sachs estimate. Analysts say that this is an opportune moment for a firm like RIL to invest in shale gas assets in the US.

“There might be an oversupply of natural gas now but eventually all energy gets consumed. The investments RIL is making now will only come on stream five-seven years from now, and by that time demand is likely to outstrip production,” said an analyst with an international consulting firm, who did not want to be named.

At RIL’s annual general meeting on 18 June, chairman Mukesh Ambani told shareholders that shale gas was likely to overtake conventional fuel as a source of energy within the next decade and that the company would work “with the best operators” as well as on its own “to build a substantial upstream business” in North America.

On the Bombay Stock Exchange, RIL fell 0.15% to Rs1,063.65, while the benchmark ended down 0.71% at 17,749.69 points.

Reliance Industries Ltd (RIL) to buy shale gas asset in US is a post from: Indian Stock Market Tips

Mukesh Ambani takes aim at $160 bn EV for Reliance Industries Ltd (RIL)

admin — Sat, 19 Jun 2010 04:36:10 +0000

Mukesh Ambani on Friday outlined the contours of what could be the next growth phase for Reliance Industries Ltd (RIL), India’s largest private sector company.

In the course of his speech to shareholders at the company’s annual general meeting, the RIL chairman spoke of doubling the firm’s enterprise value (EV)—or market capitalization plus net debt—to $160 billion (Rs7.4 trillion) in less than 10 years.

Company will build on its current strengths, diversify into newer areas and commit to struggling business

“It took three decades for Reliance to create an enterprise value of over $80 billion…I feel hopeful and confident that Reliance can accomplish value creation of a similar magnitude in less than a decade,” said Ambani, dressed in his quintessential black suit and white shirt with a red tie.

The ambitious business plan comes with risks since RIL wants to expand in areas such as telecom and retail, where it will face strong competition. It also plans to seed new initiatives in fourth-generation (4G) telephony, solar power and shale gas, where technologies are still untried. The telecom and retail initiatives also give a strong consumer services flavour to a group that has been dominated by manufacturing prowess.

“I think it is optimistic to think at the moment that RIL can achieve in a decade what they did in three. The new businesses they are entering such as retail and power are already very competitive, and revenues and margins have to be observed for at least two-three years before we can come to any conclusion,” cautioned Asish Bhattacharyya, a professor at the Indian Institute of Management, Kolkata.

The vision statement has laid out an ambitious investment plan (see graphic) that stretches across several sectors and over three strategic horizons. The most immediate strategic move by RIL will be to build on its current strengths in plastics and petrochemicals through capacity expansions. Further out is the diversification into newer opportunities such as power generation and distribution as well as a reiteration of commitment to the struggling retail business. And then there are the more long-term bets in untested areas such as 4G telecom services, development of shale gas assets and solar power.

Ambani has said in various statements over the past year about how RIL is preparing for its next “value creation cycle”. RIL has completed yet another capex cycle and is expected to generate free cash flow of $18 billion between fiscal year 2011 and 2014, according to the estimates by investment bank Goldman Sachs.

RIL has usually finalized large investment plans at the end of each capex cycle, a process that saw it move from its origins in textiles to sequential moves into petrochemicals, oil refining, telecom, organized retail and natural gas.

Ambani went into the shareholders’ meeting against the background of heightened expectations and drama, after the cessation of hostilities with younger brother Anil Ambani.

The scrapping of a non-compete agreement between the two brothers last month has created room for Mukesh Ambani to invest in sectors such as power, telecom and finance that were earlier reserved for Anil Ambani. The RIL chairman said in his speech that he looked forward to “a harmonious and constructive” relationship with the business group controlled by his brother, though he did not mention him by name.

The entry into power and telecom are the clearest indications that the elder brother is moving into territory that a family agreement had reserved for the younger brother.

The man who had initially taken the undivided Reliance group into telecom reiterated his old belief that high-quality telecom services could “provide us with whole new ways to run our homes, communities, enterprises and our economy”. RIL recently bought 95% of Infotel Broadband Services Pvt. Ltd, the only company with nationwide rights to offer wireless broadband services.

Ambani described the ambitious entry into power generation, transmission and distribution as a “transformational initiative”.

“The power sector is a logical extension for us and we will bid for all the UMPPs (ultra mega power projects). In the next few months, we will have a concrete investment programme,” Ambani said, while responding to shareholders’ queries.

Earlier in his speech he had mentioned that in addition to solar power, RIL would also enter nuclear power when the government allows it to.

Another pillar for RIL’s future growth would be its retail businesses, according to Ambani. Though Reliance Retail Ltd is still posting losses, Ambani said that his aim was to grow the company’s turnover 10-fold in the next five years, to Rs45,000 crore.

“The market competition in the new verticals Mukesh Ambani is planning to enter has increased over time, especially in telecom where it was present almost a decade back. Having said that, RIL has the financial muscle and human resource to see it through,” said Arvind Mahajan, head of business performance services at audit and consulting firm KPMG.

“The Street was expecting the RIL chairman to elaborate how Anil Ambani and he would collaborate following the scrapping of the non-compete. But he focused on highlighting his own business plans, much of which was already known,” said Kishore Ostwal, chairman and managing director of investment research firm, CNI Research (India) Ltd.

RIL shares declined 1.5% to end at Rs1,055.25 on the Bombay Stock Exchange, even as the benchmark Sensex index lost 0.26% to end at 17,570.82 points. Shares of the firms controlled by Anil Ambani also fell more than the overall market.

Source : Live Mint

Image : Live Mint

Mukesh Ambani takes aim at $160 bn EV for Reliance Industries Ltd (RIL) is a post from: Indian Stock Market Tips

Anil Dhirubhai Amabani Group (ADAG) Stocks: Which ones are experts betting on?

admin — Thu, 17 Jun 2010 10:06:22 +0000

Anil Dhirubhai Ambani Group (ADAG) stocks have been fire for the last couple of sessions. In an exclusive interview with CNBC-TV18, Deven Choksey, MD, KR Choksey Securities and SP Tulsian, sptulsian.com, talk about which ones you should be betting on and which ones fundamentally appear attractive from that pack.

Q: Let us start with Reliance Communications, there has been a lot of talk about tower stake sell etc, what do you think is the most likely transaction? Would you still buy it after the recent rally?

Choksey: I think to me the transaction would be in two parts. First transaction would be for Reliance Infratel, wherein I think they would be possibly selling a majority stake in this particular company and in turn even in the minority stake in order to facilitate the new tenants for the towers, going forward. At the same time, I think this particular transaction is going to probably reduce that debt, which is there in the books of Reliance Infra at this point in time. That would possibly going to go a little bit more positive, going forward.

The second part of the transaction, which should happen, would be with RCOM, wherein they would probably in their own books and also to fund the rollout of 3G, I think probably they would be selling 26% stake in this company, which would ultimately end up realising for them around close to Rs 15,000-16,000 crore. So that would possibly going to be the second transaction.

Both these transactions put together, I think the company, which would be a little bit more attractive hereafter, would be Reliance Communications because I think the kind of valuation at which it is at this point of time traded, probably those dark clouds would go away once the debt starts disappearing, though the equity would probably get diluted in the interim period. But still with the kind of better process emerging thereafter, I think Reliance Communications should get re-rated from current levels. The viewpoint is that the stock should be trading somewhere between Rs 205 and Rs 225 levels, should this transaction take place.

Q: There has been a lot of talk around Reliance Media Works as well on whether they will buyout star stake in Balaji, all unconfirmed right now. But do you expect any significant re-rating or corporate moves in that company?

Choksey: Possible and at the same time, I think slightly difficult. Difficult more from the point of view that this entertainment business is so far not generating the bottom-line for the company and you end up acquiring one after another company which are not still making profits, I think that gives you the discomfort that we are talking about.

Possible more from the point of view, yes, I think it is a financial transaction. You have the wherewithal to handle that kind of a transaction, so it could be possible. In my viewpoint, the consolidation at this point of time in ADAG pack in the media space is more required than additional buying of this sort.

Q: There has been a lot of talk that next week we could see the signing of the gas pact between the two parties and a hint of that might come in the Reliance AGM as well on Friday, what are your expectations?

Tulsian: Definitely it is likely because we are approaching the timeline set by the Supreme Court. But I think it will more be in the recommendatory form where I have been maintaining my view that it will be the direct agreement by the Reliance Industries with the ultimate user of the ADAG, which would be Reliance Power. That recommendation will be sent by Reliance Industries to the government for their final approval. But till you have the policies getting changed by the government for the greenfield gas based power projects, I don’t think that those can be taken as the conclusive agreements, having reached between both the parties because that still remains on the table as having agreed between the parties, which needs a final approval by the government.

So, I don’t think that reference of that will be made or will be seen in the AGM, which will be held on this Friday. There could just be a reference that, yes, the things will all be moving in the coordinated manner and everything will get settled and sorted out. But I don’t think that the specific reference of gas pact having signed between ADAG and Reliance Industries will be made in the AGM.

Q: Do you expect to hear any positive triggers at all, at the AGM in terms of either reference to telecom or closely working with the ADAG, do you think any such reference will be there in the speech?

Tulsian: I think a lot of the reference or focus will be made on the telecom venture because the management will justify their venturing into the broadband wireless. Probably one could read between the lines that the eventual plans of Reliance Industries could become an integrated or complete telephony company and by having the voice telephony also in their fold. But I don’t think even the power, which is the next big area for Reliance Industries, will have any reference.

I don’t think that the ADAG will have any specific reference because Reliance Industries will still be keeping their distance because at no point of time or at none of the platform, there will be lauding the role of the ADAG. But the references will all come that the judgement of the Supreme Court has set at the rest the whole dispute. Now, in view of the non-compete clause having dismantled, the Reliance Industries has plans of going into the telecom venture. So instead of giving any reference to the ADAG, the AGM will be more focused on the dismantling of the non-compete clause and the foray and the prospects and the growth potentials in the telecom sectors, which Reliance Industries is seeing in the time to come.

Q: What could the potential signing of the gas pact as early as next week mean for RNRL as a stock because that has zoomed to nearly Rs 68-70?

Choksey: Important aspect is that once the gas pact is signed my reading says that RNRL as a company whether they would continue to hold the trading rights for gas, that is something, which is a question mark. In my view point, till this particular announcement is out it would be speculative to say anything for or against how exactly this business would move.

But assuming this judgement, which will be government’s dictate I would believe that, I think the gas would be sold to those players who are end users and in such situation though middle party would be allowed. In such situation, I think RNRL as a company for the gas trading purpose would not assume a further business model that is my view point. But then we will have to wait for lot of clarity before it is made a rule as far as RNRL is concerned.

Q: Do you agree because the market is very excited about RNRL, but that is one risk that RNRL gets cut out in terms of the gas supply agreement, which is done directly between RIL and Reliance Power and Reliance Infra, RNRL doesn’t come into the picture as a middle party? What do you think?

Tulsian: I have been maintaining the view that there is no necessity of RNRL now to exist between these supply agreements, which will get concluded eventually between Rel Power and RIL post Supreme Court judgment. If you see there is one more point in this, I am not prepared to accept that there has not been any consideration payment by Mukesh Ambani Group to Anil Ambani Group and obviously that consideration amount is unknown to anyone. But part of that can get satisfied by taking over RNRL, which has been in the news couple of months back also when the litigation was on or maybe six months back when the litigation was all going on. So, probably because RNRL has the assets like coal bed methane, they have one oil exploration blocks, so one can always conclude that takeover of this company will give growth potential for RIL to expand in these areas and in pursuance to that this company is being taken over.

The ultimate aim of both the groups would be to retain the valuation of the company because RNRL today is enjoying a valuation of Rs 8,000-8,500 crore and no group would be interested to see the value getting eroded, which will largely be impacting about 2.5 million shareholders because 45% stake of that is held by those companies and that will really be a big dampener to the reputation of both the group. So ultimate aim is to preserve the market capitalisation and to achieve that objective, probably RIL I won’t be surprised to be taking over RNRL. But if you try to derive some value with gas rights, which presently are held by RNRL, I won’t be giving any consideration or valuation on that aspect or on that point to RNRL.

Q: What about Reliance Capital that is up about 15% since the new MoU, how do you value that?

Choksey: I think the important aspect is and I would strictly go with re-rating sentiments, which are happening into the market. Now, the investors are more comfortable because they believe now the managements of these companies are a little bit more free to look at business per se.

For Reliance Capital, looking at the fundamentals, I think the growth prospects are emerging a little brighter. Few of the things, first out of lot would be the insurance business, at some point of time you should be seeing the unlocking of this particular business happening. That is where the market up till now which was skeptical because of the management time not available for this kind of activity is now more looking positively and that is why you are seeing some kind of re-rating. We do believe that going forward in each of their areas of business in financial companies, I think would start getting better attention and that is why markets are seeing some better hopes and this re-rating. Otherwise, fundamentals are expected to follow in the businesses in which they are operating.

Q: What about Reliance Industrial Infra, it has gone up 40% since the new MoU came in, what is driving that stock?

Tulsian: Amongst both the group this company has shown the highest appreciation as you have rightly said, it has appreciated by about 35-40%, especially in last three-four days. I won’t be attributing this rise since the dismantling of the non compete clause, infact that has happened couple of weeks back, but the rise has happened only in the last four days. This company has a marketcap of just Rs 1,500 crore and you cannot expect any company from Mukesh Ambani Group to remain at such a low level, such a low marketcap. Now, people have started talking that the old expectations that probably the gas transportation infrastructure, which are held by Mukesh Ambani in his personal capacity could get pooled into this company. Presently, this company only has a Chembur Patalganga pipeline, which transports crude from BPCL refinery to Patalganaga of about 60 kms, so this fits into the object of the company. 46% stake is held by RIL in RIIL and if the gas transportation infrastructure network is pooled into this company promoters, along with Mukesh Ambani, can increase their stake in the company to about 90% and further dilution can happen and huge amount can get mobilised.

Second talk, which has started happening from last couple of days, that probably Infotel broadband can also come in this company. So this is largely on the hopes of a massive restructuring likely to happen in RIIL by putting in some existing projects, which will increase the size of the company maybe by 10-20 folds.

Source : Money Control

Anil Dhirubhai Amabani Group (ADAG) Stocks: Which ones are experts betting on? is a post from: Indian Stock Market Tips

Nifty ends in green for 6 straight sessions; M&M up 3.5%

admin — Wed, 16 Jun 2010 13:18:38 +0000

The benchmark Nifty remained in a consolidation mode for second consecutive day but it closed in a positive terrain for sixth straight day. Global cues were also quite supportive today; Asian markets ended 0.9-1.8% higher.

European markets were trading marginally higher, at the time of closing of Indian equities. The US markets were closed 2-2.8% higher on Tuesday; a successful debt offering from Spain and Ireland aided sentiment.

"Gradually, there is a return of some amount of optimism in the market over the last three-five days. We seeing that at lower levels there is continuous buying interest, which has come into the market again. This time around also it got proven true. So given that there is global turmoil in the markets keeps on capping off at some level around 17,500-18,000 to about 5,400-5,500 on the Nifty," says Naresh Kothari, President of Edelweiss Capital.

The 30-share BSE Sensex closed at 17,462.87, up 50.04 points or 0.29% and the 50-share NSE Nifty rose 11 points or 0.21% to settle at 5,233.35.

Anil Dhirubhai Ambani Group and Mukesh Ambani group companies’ shares were the most active ahead of Reliance Industries AGM on June 18. Reliance Natural Resources, Reliance Industrial Infrastructure, Reliance Capital and Reliance Communications were the most active shares.

CNBC-Awaaz learns from sources that Reliance Industries (RIL) is looking at acquiring 26% stake in Anil Ambani backed Reliance Communications.

CNBC-TV18 learns that the Mukesh Ambani-led RIL is bidding for ultra mega power projects (UMPPs) in Chhattisgarh, Orissa and Tamil Nadu. Sources inform that the company is in the process of purchasing request for quotation (RFQ) documents for the 4,000 megawatt project.

Tata Steel, Tata Motors and Sterlite Industries were other most active shares. ICICI Bank and HDFC from financial space gained 1.9% each. HDFC Bank rose 0.6%. However, Axis Bank and IDFC fell nearly 2%. PNB and Kotak Mahindra Bank declined 0.8% each. SBI was flat.

Infosys and TCS from technology pack went up over 1%. Wipro was up just 0.15% while HCL Tech slipped 0.55%. M&M was the top gainer on Nifty; rallied 3.5%. Tata Motors went up 2.7% as its global sales jumped 50% to 79,819 units in May. Maruti was up 1.6% while Hero Honda fell 0.5%.

Sterlite Industries from metal space rose 2%. Hindalco was up just 0.3% while Jindal Steel, SAIL and Tata Steel declined 0.5-1.7%.

DLF from realty segment went up 1.85% while Unitech went down 0.35%. Cairn India, GAIL and BPCL from oil & gas space rose 0.3-1% while Reliance Industries was down 0.76% and ONGC down 0.16%.

Idea Cellular from telecom pack gained 1.1% and Reliance Communications was up 0.3%. However, Bharti fell 1.3%.

HUL from FMCG segment slipped 1.6% and ITC was down 0.3%. BHEL, L&T and ABB from capital goods space lost 0.2-0.4% while Siemens gained 0.3%.

In the power space, NTPC, Power Grid, Reliance Power, Tata Power and Reliance Infrastructure were down 0.4-1.5%.

In the midcap space, MTNL, Bajaj Electrical, Gammon Infra, TataTeleservices and Honeywell Automation gained 6-10%. However, Sadbhav Engg, Kwality Dairy, Syndicate Bank, IFCI and Dena Bank fell 2.7-6%.

In the smallcap space, TTK Prestige surged 18% and Resurgere Mines was up 17.19%. IFB Industries, Delta Corp and Relaxo Footwear were up 10.55-11%. However, Binani Cement, Vindhya Telelink, Subhkam Capital, Kanani Industries and Balaji Telefilm lost 4.5-7%.

Advances outnumbered declines; about 1641 shares advanced while 1464 shares declined on BSE. Nearly 206 shares remained unchanged. The markets reported total turnover of Rs 1,12,369.04 crore. This included Rs 14,361.33 crore from NSE cash segment, Rs 93,203.13 crore from NSE F&O and balance Rs 4,804.58 crore from BSE cash segment.

Nifty ends in green for 6 straight sessions; M&M up 3.5% is a post from: Indian Stock Market Tips

RIL to bid for Chhattisgarh, Orissa, Tamil Nadu UMPPs: 3 ultra mega power projects

admin — Wed, 16 Jun 2010 09:18:00 +0000

It is clear that Reliance Industries has major plans for the power sector. CNBC TV18 now learns that the diversified giant will bid for ultra-mega power projects.

It is being learnt that Mukesh Ambani -led Reliance Industries (RIL) is bidding for ultra mega power projects (UMPPs) in Chhattisgarh, Orissa and Tamil Nadu. Sources inform that the company is in the process of purchasing request for quotation (RFQ) documents.

The company will bid for the proposed three UMPPs depending on the timeline, sources say, adding that RIL can acquire only three power projects as that is its current policy.

The government has extended the deadline for RFQ for the Chhattisgarh UMPP to July 5, while that of the Orissa UMPP has been extended till July 30. For Tamil Nadu, the UMPP RFQ may be issued soon.

Source : Money Control

RIL to bid for Chhattisgarh, Orissa, Tamil Nadu UMPPs: 3 ultra mega power projects is a post from: Indian Stock Market Tips

What is RIL going to do with the spectrum it acquired?

free stock tips — Sun, 13 Jun 2010 06:15:02 +0000

What is Reliance Industries going to do with the spectrum it has acquired? CNBC-TV18′s Siddharth Zarabi tries to find out details of what its strategy might be.

The initial estimate for capex is not expected to be as intensive as 3G. Preliminary estimates suggest Rs 6,000-7,000 crore depending on usage of existing technologies and the fact that there will be a lot of synergies with Reliance Communications’ existing telecommunications network.

It is expected to be a fast rollout, a data driven strategy across the country offering free and subsidised devices possibly harking back to Reliance’s original CDMA entry across the country five years back.

RIL plans to start with WiMax and progress to Long Term Evolution (LTE) over 2-3 years. Initial plan is for municipal wireless and then full city coverage, making it available freely across towns just like Google has done in San Francisco in the past. It plans to rollout Wi-Fi hot spots across 100 cities.

It is not going to be a holding strategy for spectrum according to RIL. It is probably going to be in a position to be able to offer services in select cities to start with between two to three quarters. The data cloud that RIL will be in a position to offer would be on a solid and robust physical infrastructure owned by Anil Ambani.

ADAG‘s statement today welcoming RIL’s entry is actually a clear hint in that regard.

Policy roadblocks:

Data, entertainment and voice possibilities exist via broadband wireless access. RIL has acquired a category ‘A’ ISP Infotel broadband.

Sources said the policy barring domestic voice over IP will need a relook. Internet service providers (ISPs) have been barred from offering domestic voice over IP since 2002.

Barring internet access, RIL is likely to pay a 6% annual revenue share.

Luring customers:

The company plans to address corporate and home user demand for data. It sees Wi-Fi phones and smart devices as key to customer adoption. Free or subsidised devices will also be key to faster adoption.

BWA ready:

Sources said the company’s entry into broadband will be big bang. RIL can be in a position to launch services in the next 2-3 quarters.

It is in a position to dominate broadband services market and has the potential to replace the VSAT services market.

RIL can hire fibre from Reliance Communications and others.

Well planned entry:

Sources said RIL’s broadband foray was planned over a year ago. Its broadband foray possibilities were discussed informally.

Source : Money Control

What is RIL going to do with the spectrum it acquired? is a post from: Indian Stock Market Tips