Reliance Industries: End of an enigmatic era

Font Size

Print

Feedback

Email

Discuss

Related Articles

RIL strikes oil off Gujarat coastRComm debunks spl audit reportRIL plans to rope in partner for Haryana SEZSC for arbitration in K-G gas row

: Finally, we come to the end of the speculation and uncertainty that the markets were undergoing since it all began more than a year ago. On January 17, 2006, Reliance Industries Ltd (RIL) traded for the last time as a consolidated identity. The colossal empire that Dhirubai Ambani had built up with over 3.1 million investors ends its era. It sheds its old structure and begins its novel journey on a standalone basis.

During the special one-hour trading session for Reliance shares on January 18, 2006 from 8:00-9:00 am, the discovered price of RIL shares on standalone basis was close to Rs 715. According to Raj Gandhi, research analyst, - oil & gas, Angel Broking "Reliance at these levels is fairly priced for the medium term; any investment at this stage should be with a long term view of over one year."

Some confusion prevailed in the normal opening trade as the Nifty index showed a greater fall compared with that of the Sensex. Nifty showed a fall of 91.60 points against Sensex's fall of 90.45. Normally, rise or fall in Sensex is about 3 times the rise/fall in Nifty. It later became clear that an error had been made in the Nifty index. The weightage of RIL in the Sensex has come down to 9.5% from 12.5% previously. The new structure gives Mukesh Ambani complete and independent control over the oil exploration, refining, petrochemicals and textiles businesses through a 'core'/ standalone Reliance Industries and the refinery Indian Petrochemicals Corporation. He also controls the biotech firm Reliance Life Sciences and Trevira, a European company manufacturing polyester fibres.

Anil Ambani gets to control power, communications and financial services undertakings through four companies, which come under the umbrella of the Anil Dhirubhai Ambani Enterprise (ADAE) group, as part of the Reliance group. These four companies are Reliance Capital Ventures Ltd (to be amalgamated with listed Reliance Capital), Reliance Energy Ventures (to be amalgamated with Reliance Energy), Reliance Communication Ventures (mainly including Reliance Infocomm and Reliance Telecom) and Reliance Natural Resources (for gas-based energy undertakings).

All RIL shareholders will be issued shares of the demerged companies in a 1:1 ratio. So if a shareholder holds 100 Reliance Industries shares he would get: 100 shares of Reliance Communications Ventures Ltd, 100 shares of Reliance Energy Ventures Ltd (REVL), 100 shares of Reliance Capital Ventures Ltd (RECL) and 100 shares of Reliance Natural Resources.